Team O’s ‘Poor’ Trick

COMMENTARY Poverty and Inequality

Team O’s ‘Poor’ Trick

Dec 21st, 2011 2 min read
Robert Rector

Senior Research Fellow

Robert is a leading authority on poverty, welfare programs and immigration in America.

New Yorkers can be forgiven for shock at the newspaper headlines last week informing them that millions more of them were “near poor” or “low income.” They might relax a bit on learning that the “root cause” is simply new definition of poverty from the Census Bureau.

Indeed, under the Census definition, a family in New York City is “near poor” if it has full medical insurance and an annual income below $77,000. (In Oakland, Calif., the figure is $88,000!)

The Census report actually put nearly half the US population as “low income” — and news stories typically implied the startling new number was the result of sharply deteriorating economic conditions.

In fact, it was a surreptitious and dubious shift by the Obama administration, setting the “near-poverty” income level very close to the median-household income in most communities. (“Median income” is the point at which half the households have more income, and half have less.)

Thus, it was foreordained that, using this new standard, the Census folks “discovered” that almost half the population is living in “near-poverty” conditions. That is, if you define “near poverty” as an income roughly equal to the median, that means that by definition nearly half the population will always be “poor” or “near poor” — regardless of any changes in actual living standards.

Obama’s new poverty measure will produce very odd results. For example, if the real income of every single American were to magically double overnight, the new measure would show no drop in poverty or “near poverty,” because the poverty- and near-poverty income thresholds would also double.

In other words, the president has introduced a statistical trick that gives new meaning to the saying that “the poor will always be with you.”

The shift seems designed to promote Obama’s obsession to “spread the wealth.” By suggesting that many more Americans are poor or near-poor, the Census generates political pressure to raise taxes and expand the welfare state.

Of course, President Obama has already permanently increased welfare spending by nearly a third. This year, the government will spend more than $900 billion on means-tested aid, providing cash, food, housing, medical care and social services to poor and low-income persons. (This figure does not include Social Security, Medicare or unemployment insurance.)

This welfare spending comes to around $9,000 for each person in the lowest-income third of the population. And the new “poverty” measure is propaganda to raise the figure further.

What does all this have to do with poverty?

For most Americans, the word “poverty” means a family that is unable to obtain reasonable food and shelter. Along that line, news stories about poverty typically feature a homeless family with kids sleeping in the back of a van.

In fact, nearly all poor Americans live in houses or apartments that are in good condition and not over-crowded. Even under the old, stricter definition of poverty, only 4 percent of the poor became homeless during the course of a year — while the typical “poor” American lived in a house that was larger than the house of the average nonpoor Englishman or Frenchman.

Under the old standard, more than 80 percent of poor Americans had air conditioning, nearly two-thirds had cable TV and half had a computer. Most of the poor were able to obtain medical care whenever needed.

Even in the middle of the current recession, some 96 percent of poor parents stated their children were not hungry for even a single day during the last year.

Clearly, there was a huge gap between poverty as it is understood by most Americans and “poverty” as defined by the government. And now Obama has widened that gulf.

Under this new, propaganda-driven definition of poverty, the gap between common-sense and government poverty statistics will grow much larger. The Obama administration is twisting statistics to confuse voters, rather than providing accurate information.

Robert Rector is a senior research fellow at The Heritage Foundation.

First appeared in The New York Post