As Ed reported earlier, the Census Bureau today released its annual poverty report, which showed the number of poor Americans is up from 43.6 million last year to 46.2 million this year — roughly one in seven Americans and the highest poverty rate in 15 years. No matter which way you slice it, that’s not good news. When coupled with declining business and consumer confidence, it’s still worse news — a true sign of these troubled economic times. What policies we adopt to address our economic problems are of the utmost importance — and, unless we want to be classified as insane, we cannot do what we have always done and expect to get results other than those we have always gotten. So, what were the policies that led us to this situation?
“These are the wages of class warfare,” Ed writes. “Even more basically, these are the entirely predictable outcomes of central economic planning, selective regulation, regulatory ambiguity, and mixed messages on tax rates and fiscal burdens.”
He’s right. And, yet, it seems entirely probable that today’s new poverty numbers will only reinvigorate class warfare rhetoric and calls for redistribution of wealth. After all, something must be done to alleviate the burdens on low-income Americans — and rarely if ever is it the politically-endorsed position that the “something” should be shoring up marriage, promoting a strong work ethic, private generosity, a bit of neighborly assistance or simple words of encouragement. And never is it hinted that handouts might actually hurt rather than help those who lack ample material means.
It’s helpful, then, to remember just what poverty looks like in America today — not to dismiss it (for it is a problem to be solved!), but to ensure that the solutions we craft are as likely as possible to be effective. According to a Heritage Foundation backgrounder released today:
In 2005, the typical poor household, as defined by the federal government, had air conditioning and a car. For entertainment, the household had two color TVs, cable or satellite TV, a DVD player and a VCR. In the kitchen, it had a refrigerator, an oven and stove, and a microwave. Other household conveniences included a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker. The family was able to obtain medical care when needed. Their home was not overcrowded and was in good repair. By its own report, the family was not hungry and had sufficient funds during the past year to meet all essential needs.
The overwhelming majority of Americans do not regard a family living in these conditions as poor. For example, a poll conducted in June 2009 asked a nationally representative sample of the public whether they agreed or disagreed with the following statement: “A family in the U.S. that has a decent, un-crowded house or apartment to live in, ample food to eat, access to medical care, a car, cable TV, air conditioning and a microwave at home should not be considered poor.” A full 80 percent of Republicans and 77 percent of Democrats agreed that a family living in those living conditions should not be considered poor.
The Census report, according to Heritage’s Robert Rector and Rachel Sheffield, is misleading in two major ways:
First, it provides no information on the actual living conditions of the persons identified as poor. It simply states that a specified number of persons are poor without giving any information on what poverty means in the real world. A detailed description of the living conditions of the poor would greatly enhance public understanding. In fact, without a detailed description of living conditions, public discussions of poverty are meaningless.
Second, the report massively undercounts the economic resources provided to poor people. The Census Bureau asserts that a household is poor if its “money income” falls below a specified threshold. In 2010, the poverty income threshold for a family of four was $22,314. However, in counting the money income of households, the Census Bureau excludes virtually all welfare assistance. For example, more than 70 means-tested welfare programs provide cash, food, housing, medical care, and social services to poor and low-income persons, including Temporary Assistance to Needy Families, Supplemental Security Income, the Earned Income Tax Credit, food stamps, the Women, Infants and Children food program, public housing and Medicaid. (Social Security and Medicare are not means-tested programs.)
In 2008, federal and state governments spent $714 billion on means-tested welfare programs, but the Census Bureau counted only about 4 percent of this as money income in determining whether a household was poor. The bottom line is that the economic resources available to poor persons are vastly greater than the report claims.
When Rector released his first report about the amenities enjoyed by the poor in America, Stephen Colbert ripped into it, suggesting it’s somehow cold or compassionless to want to rethink anti-poverty programs. But is it? As Rector explains, the War on Poverty has both worked and not worked. Federal government assistance has addressed the consequences but not the causes of poverty, two of which are the collapse of marriage among the poor and lack of parental work. As Marco Rubio once put it, “Our poverty does not create our social problems; our social problems create our poverty.” And “fixing” only the consequences of poverty ignores the fundamental reality that earned success leads to a happier life (I cannot harp on that enough!). If President Obama (or, for that matter, Stephen Colbert) was really concerned with poverty in America, he would do whatever possible to encourage a welfare system that promotes self-sufficient prosperity rather than expanded dependence, as Rector suggests.
“As the recession ends,” Rector writes, “able-bodied recipients should be required to work or prepare for work as a condition of receiving aid. Even more important, the welfare system needs to abandon its 50-year-old tradition of ignoring, dismissing, and penalizing marriage. It should embark on a new course to strengthen and rebuild marriage in low-income communities.”