The Heritage Foundation

Executive Memorandum #283 on Poverty and Inequality

September 27, 1990

September 27, 1990 | Executive Memorandum on Poverty and Inequality

The Missing Data In the Census Bureau Poverty Report


(Archived document, may contain errors)

9/27/90' 283

THE MISSING DATA IN THE CENSUS BUREAU POVERTY. REPORT

The United States Census Bureau yesterday released -its official statistics.'on poverty and family income for 1989. There was. some good news.. Real median family income climb ed in 1989, repre- sentipg increases in six-of the past seven. years. Black households -had a real income increase of 511 percent in 1989. De ite the recorded% strong growth in median family income, however, press atten- . . i i .... . .. .. . . sp .-*n w i ll focus. inevitably on-the poVerty data and th.oseostensibly "16ft behihV -during. the ec-adomic f 5 1 rccoyory o. the 80s. Ile - report's -figures show 3 1. - mi lion persons in "povci-ty," a numberr un- -fro- miihi previous year but greater than in. 19 6 5, when'thd NVar on Poverty bega' n. The ,iroiible is that the Census data overstate -the number of persomin. poverty and understate the living .standards of low-income Americans. 7.:,..-.'T1ie Census Bureiau's data seriously rrislead policy maker'sand-Am e rican taxpayers, Who'are -spending about $180 billion 'a -year to fight "poverty,@' because it -tells little about the real poverty in America, Missing from yesterday's report. are the facts that: 4 38 percent of the persons' whom the Census Bureau identi f ies as "poor" own their own ho'nf69 -with a miedianivalue of $39,200'; Over, 100,000 "poor" persons own homes with a value in excess of $200,000; 62 percent of "poor" households own a car; 14 percent own two or more cars; Nearly half of all "!'poor" 'hous e holds hi a-ve: air.-conditioning; 31 p@rcent 'of all "'poor" households have microwave ovens; Nationwide, o!'ver 22,000 "poor" households. have heated swimming pools or hot tubs. Th@.se fi6ti'iind-erscore a large conceptual gap between the "poor" as defin e d by. the Census e "61-ity, numerous go .V&rninen ports based Bureau and"what most Americans congid " r as poor. In'r a . t rel"' on. data. collected by. the Census Bureau %indicate that most;' bpr'@-Americansfdd are-.bett& @p . ay housed, better fed, and . own. m- -d-id..the average U. :S.- citizen throughour'-@' pre personal property than, most of this.century. In 1988, for exam lei.after adjusting for@Jnflation, the- per capita expenditures . % . . . . . . -p .. fi "@ l"' , eper capita-irfcobm@ of th67.m e d'an. o the owest income, fifth of the- U.S. popghition exceeded'th @k.merican -household in 1955. comparis bMi6j"and. r' r a Bettir'Off. Thift Eiuirope"s.@ Internition"al ons of st ardt'Are'siftii a ly eve 'ling canceriiing'the?maidkal weii-being of Amer i ca's "poor," The average "'poor" American lives in a la@ger*house- or. apartment.thawdoes. the, ayprageWest,Furopeaii fthis.is@ the average Wek '. ..-- Eurp,ppan o'Am' ,,not,.pgqr West Fpropeans). U..S. and:,-EUrqpean'0ensus.--data indicit& -that po r eri cans

,-;,2&( 5V 2, V5 F)rrG WI A tat faf more meat, are more,,.jikWyu' 10M, modefdaMM'Opp pp Woor i@ilets than do Wesi 12V 6V

4 12fi?5, for..aifam 41, V U povstlx,".. ,Ry offouEjn I lacpme reportdd. 4.94-4ior, '4hofflodY.-As,possible-bo. mcq $1, -!r Ogy,@ -ijapimpi ifi-@ th 'O'Md cause'OR We-.;S-ffl6aYf M*ed,metfioddl 4ataati count_@ ing- -'f4`-- i7theCensug-B.Arta ignores. o d b 1466i: "_near1Y._&1VM_1_ 67 'erld poori.- whe e,hd - b fare reee1V";ed`W- " -th&-p-b- of'@A, S'sith;.: WcW atipqsoftholivi'ng'standar-d@i-6i-low-,iii'coli househalds'&T "guye'' regard@iw&k&dollhrt ift nih@cash assigtmcqprov14646t@i r1tMent," . b . Am @ji i I184 billidn- oft welfareprogram.. s %in 1988, the ldtO's' i tehensive.- t.year'f& "ibh-eic i6e bift:-the Census,-Counts -only $2.7 b . o ot, owjjicome pe 'SozW. data im is excluded.- includi ams-1 -land zid great majo" 6C W-61'tafelsyst i@qg en. ire prog r . sing,,and.Medicaid..T 'gthavis to the needi-lik' f6dd-`91t'a m-prs, p'u' lic hou %@e!W@-- ndih e "T. - fdr' e' ry excluded from the official data on poverty totals $ 1'58 billio'ri, or over houself6td. A new that c6uAts income and- assets accUraitely. s h ould be..id6pto td replace 66'.Mistis survey SHOMM' Bureau's Hawed methodology. With accurateu 0-ounting, the,number -of- poor persons w iild'bd. to 6c"'bi@y.."a'-sm. All fraction bf today's estimated 31.5 milli -on. Crealin e,' estroying Faimilits. The m a terial well":beifig.6f g DepiRidene '6`1 egt e ett, we not, Ad ai the,success of 'a War oh'Pov'erty...-Studies reveal ..that t e arg, re spenft,is.not .Ito.raise incomd'bu .t m- er'ely:to -replace, self-sjAffiPi.eiii@w-ithdi-`: d"i : fliiA64'930s pen ence . , nearly 6n6-thi?d -of -pooufa milies wgire. headq.4 hb V before the War on P&drt@l -pdroefir-of poor6vii m. 'e.. w'; ' 6-4' d tiMp throughout the year. In 1989 ., only 1621 d, hea s of Fg h@ U", seliol&. OiA&r half iA poor -familidsare headed byperspIns w ho do not work at all.' tioir of -fa-vu1jqs. Irt- 19 e rty. fi for A Second,Ma f li'the ddstruc 892-. @,p . ra e Uor consequence of wel are ;J@i@ 5 .6 by .6ontrast, the poverty- rate fp? fqraale-,hei(Oed'far1W'.fldSf' marri -fa@iiqi, 06rciiii, p1p .....es was 32.2 perqppt.-Ile numbeioffe male-headed familidg, below thepoyerty, level has indr, 0-49-d 4.., V@ . .. ... - , ;i;i t dramatically since t e start df th6 Wir o'n"Po"ver'. ty.;'In' 1959just-28 p-owgias 0 if children were headed by women; last year, o v er 60 percent of poor familiei with chId Wert,, 1@. 'ead6d----:- -i(TP .rnei,9 Ce -S:l -,stdad rovemant f0r, the geat-.xg 89. . asup: data,. 1@6ajh setio" 4' V@6d, S@o* Y. _MP Wnty . Y ji I I k" of American fami es.. t e methodology used by'th@'B'u"rea'U' w,e"re':improv;4iito@!ne4sure ididly the assets, cash income, and welfare benefits of 'loW.;@income.;h-o-.iiselioldLc,-@ the.figg. :'.w ffir fewer persons in poverty than the official dataxl2kimi; RdWit'Re'Cior Yst P

"kiie" Walsh O'Beirne Deputy Director of Domestic Policy Studies

For birther information: "Kite* T RAO @Qo@,qjjydfughlin -How,pooe i Ari X ilv"OW"fkri -40undation Backgrounder No. 791, September 21,1990. Robert Roctor and Kate Walsh O'Beirne, "Dispelling?theMyths of Income-Inequailit n .y,"Heri tage'fd@n"i*iie'idc-k8@under No. 710, June 6,1989.

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Related Issues: Poverty and Inequality