Opponents Mislead on the New Poverty Measure

It's hard to know who's poor in America, says Washington Post columnist Robert Samuelson. But he's damn sure that the new poverty measure the Census Bureau plans to develop will mislead us. In fact, it will be, as the Heritage Foundation's Robert Rector has said, a "propaganda tool" to promote "spread the wealth" schemes.

Everyone, as the late Sen. Daniel Moynihan said, is entitled to his own opinion, but not his own facts. Samuelson's "facts" are a misleading mixture of opinion, distortion and downright misstatement.

Let's start with Samuelson's definition of poverty. "Low income matters," he says. But "poverty is also a mind-set that fosters self-defeating behavior."

In other words, things like "bad work habits," drug and/or alcohol addition and the breakdown of the traditional family aren't factors that cause some people to become or remain poor. They're inherent in the condition of poverty — unlike the "bad luck" of accidents, job losses and disability.

So, contrary to the rest of Samuelson's argument, it seems that the poor will always be with us — unless and until they shape up.

Samuelson and the people who think like him have got problems with the current measure because it seems to indicate that we haven't made much progress in reducing poverty. One reason, he says, is that it doesn't reflect the fact that immigration is inflating the poverty rate. Poor immigrants apparently aren't really part of America's poor population.

The second reason is that the material well-being of poor people has improved, at least in part because of income supports like food stamps, Medicaid and the reimbursable Earned Income Tax Credit.

As the "observations" (pdf) of the group working on the new measure show, it will account for these income sources, along with some work-related expenses like transportation and child care. Samuelson recognizes and approves of these changes, as do a wide range of experts.

What sticks in his craw is the way the group plans to measure the costs of food, shelter, clothing and utilities. He says it will use what the poorest third of Americans spend on them. In fact, it will peg the costs to the 33rd percentile of what all Americans of a given household composition spend.

Well, we can't expect a columnist with an ax to grind to worry about such fine points — even when they would bolster his shaky case.

Charging ahead, Samuelson asserts that calculating basic living costs according to the reference standard will cause the poverty threshold to continually rise as incomes rise. This is the heart of his gripe. And it reflects either a misunderstanding or a willful intent to mislead — perhaps originating in his reliance on Rector.

"Suppose," he says, "that all Americans doubled their incomes tomorrow, and suppose that their spending on food, clothing, housing and utilities also doubled." People would be richer, but the poverty rate would stay the same.

Of course, it probably wouldn't. Because all Americans would include the poorest. But why should we even suppose what we know are counterfactuals?

If past is prologue, then incomes won't rise proportionately. A recent update of a paper by University of California at Berkeley professor Emmanuel Saez shows that households in the top one percent of the income scale captured nearly two-thirds of all income growth between 2002 and 2007.

In any event, when people earn twice as much, they don't spend twice as much on basic necessities — unless they were desperately poor to begin with. Evidence for this in a nice set on slides on Forbes.com, which show that the poorest 20 percent of American households spent higher percentages of their income on basic necessities than either the middle or the richest 20 percent.

Moreover, people wouldn't, as Samuelson alleges, be "automatically poor" if they were "a given distance from the top." Because the new measure wouldn't define everyone with some fraction of the income that the top tenth — or half, for that matter — have as, by definition, poor. That, as I've written before, is one of those European notions so abhorrent to our home-grown conservatives.

Still, I think it's true that the new poverty measure will reflect a more relative notion of poverty than the current measure, which is based solely on food costs. The doesn't make it a true relative measure. Nor does it mean that the new measure will lead to new legislative schemes to reduce our country's huge income disparities, though it could provide evidence to support them.

Instead, I think, the measure will merely reflect our evolving notion of a minimally sufficient standard of living.

Back in the early 1960s, when the current poverty measure was developed, lots of people still didn't have indoor plumbing. Lots more didn't have air conditioners. In fact, my family didn't, and we were solidly in the middle of the middle class. No one had personal computer or access to the internet. Nowadays, it's a challenge to get a job without them.

The new poverty measure will capture some, but not all of these things we now view as necessities. Rector, and apparently Samuelson, would prefer a measure stuck in a static, 40-year-old concept of "destitution."

That certainly would make a lot of us who aren't poor feel better, wouldn't it?

Photo credit: cohdra