Fake Math Drives Bad Policies for the Poor

New Orleans        The old saw reminded us about numbers and other lies, essentially that numbers don’t lie, but liars use numbers. Sad, but true.  I was reminded of this the other day when I read that the U. S. Department of Labor counts an individual as employed if they work for even one (1) hour during the survey week. Measurements of the poverty rate in the United States are equally bizarre and as widely manipulated.

The first determination of the poverty line was crafted in 1963 by a statistician for the Social Security Administration, Mollie Orshansky.  Her baseline was the food basket.  From a 1955 survey she determined the average cost of feeding families of varying sizes, and then multiplied by three, presuming that food was one-third of the living cost for the family.  Slow walk forward more than fifty-five years and, amazingly, her numbers, adjusted for inflation, continue to be the math behind the madness.

In 2019, it’s housing and childcare that suck the life out of lower income family budgets.  Food is still critical obviously.  Almost 16 million Americans used food banks in 2017, according to the Census Bureau, and 46 million use food banks according to the food bank network calculations.  Food stamp benefits only average $1.40 per meal, which doesn’t get anyone that far. Still the rising cost of housing is estimated to take 50% of income for families making less than $30,000, which is a budget buster for the poor.

Even a conservative source like The Economist argues that the deficiencies in the poverty line measurements “fuel the perception that safety-net programs have had no positive effect.”  In looking at the defects of the measure, they state clearly that, “The most significant is that income is calculated before taxes and transfers, meaning that poverty-reducing effects of the earned-income credit or food stamps is ignored.”  Alternative measurements based on measuring supplemental poverty and consumption have advantages.

There’s also general agreement that starting from the bottom, which means the measurement of absolute poverty, beggars the relief – and equity – that can come from anti-poverty programs.  Other countries, Britain for example, classify the poor as a percentage of median income, in their case 60%.  In the US, the poverty line is now at 26% of median income compared to 1975 when it was 40% of median income.  Inequity is in fact increasing the gap between not only the poor and the rich, but the poor and literally everyone else, making the measure and the programs either meager or punitive.

Ignoring cost of living differences also burdens the poor tremendously, and allows conservative ideologues, remember former Speaker of the US House Paul Ryan, to debunk the value of anti-poverty programs and argue for more stringent work requirements.  Such requirements fly in the face of the fact that the vast majority of the poor are children, elderly, and disabled, rather than the mythic able-bodied slacker.

It’s one thing for policy makers to ignore poor families and refuse to lift a finger to pull the voting lever on programs to lift the poor out of poverty, but why is necessary to lie about it and fabricate the numbers?

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Please enjoy Chevy Girl by Jennie J.

Thanks to KABF.

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Poverty in America, Why So Bad, and What to Do About It

New Orleans      The answer to the perpetually plaguing question of why we have such intractable poverty in the United States, arguably the richest country in the world, is always perplexing.  Every comparison of the US with other economically developed countries finds us at or near the bottom.  Recently the conservative business weekly, The Economist, looked at the issue with a different set of eyes to try to determine why the results of spending trillions over the years still has us struggling.

The heart of their argument is that our poverty programs focus on the “problems of the past, largely elderly and the working poor, leaving behind non-working adults and children.”  And it shows:

  • 40 million poor in 2017 or 12% of the population that amounts to individuals in a family of four living on $17.64 per day.

  • 18..5 people make only half that amount.

  • Children fare the worst with 13 million in poverty or 17.5% of all American children.

The Economist writers were not afraid to ask “Why?”  Their answer: “the safety net does not work as elsewhere.”

Countering the rightwing consensus, they argue that the poverty program has been a success, as far as it went.  Using the supplemental poverty measure, the “1967 safety-net taxes and transfers barely dented poverty:  26.4% of Americans were poor before, and 25% remained poor after.  Without a safety net, nearly the same proportion of Americans… would be poor today as were 50 years ago.”

No back-patting though.  They also find that poverty is now moving to the suburbs where 15% are at that level compared to 11% in cities.  Youngstown, Ohio gets special attention as sinking fast and Cleveland, where half of the children live in poverty, is no model despite some claims and hype.

Of course, poverty is also not colorblind with people of color paying the most painful prices for poverty.  With reparations in the news but not likely on a short list of potential policy agreements not matter the overwhelming justice that lies in the arguments, what are race-neutral problems that would move the needle?

The Economist doesn’t have the answer here, but refreshingly they do not default to the notion that philanthropy and charity are the answer.  Even with total charitable giving at $438 billion, that only accounts for 2.1% of GDP, and despite all the claims of the techsters and the rich who claim they know and do better, “charitable giving has stayed roughly the same for 40 years,” as they point out.

What might help break the cycle?

Help on rent and more affordable housing, they recognize, as we have argued, would be huge.  A lot more investment in children, which means more for HeadStart, an entitlement to daycare for all, and other programs perhaps too far out for their taste would also move the needle.

Of course, just plain cash support for out of work men and women and a restoration of welfare supports that make a difference for mothers and their young children, would be huge.  Just saying, because The Economist hinted at those answers without advocating them.

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