The Specter of Poverty in America

COMMENTARY Poverty and Inequality

The Specter of Poverty in America

Sep 21, 2004 3 min read
Robert Rector

Senior Research Fellow, Center for Health and Welfare Policy

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

Last month, the Census Bureau released annual poverty figures showing that the percentage of Americans who are poor rose from 12.1 percent in 2002 to 12.5 percent in 2003. It's important to recognize that these figures are a year old. They cover 2003, not the current year. Given current economic conditions, it is extremely likely that poverty fell during 2004, although the official figures won't be available until the fall of next year.

Poverty is a lagging economic indicator. Formal recessions (when the whole economy is shrinking) usually last less than a year. But the poverty rate almost always continues to rise for several years after the recession ends. The last recession officially ended in November 2001, but the poverty rate continued to rise in 2002 and 2003. This is a normal economic pattern that has occurred in most prior recessions.

Compared to prior recessions, the recent recession was mild and had a limited impact on poverty. Overall, the increase in poverty resulting from the recent downturn has been half the increase that occurred in the two last recessions that hit the economy in the early 1980s and early 1990s.

Still, the Census Bureau reports that 35.9 million persons "lived in poverty" in 2003, a number that should cause concern to all. But to really understand poverty in America, it's important to look behind these numbers - to the actual living conditions of the individuals the government deems poor.

For most Americans, the word "poverty" suggests destitution: an inability to provide a family with nutritious food, clothing and reasonable shelter. But only a small number of the million persons classified as "poor" by the Census Bureau fit that description. Real material hardship certainly does occur, but it's limited in scope and severity. Most of America's "poor" live in material conditions that would be judged as comfortable or well-off just a few generations ago.

The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:

- Forty-six percent of all poor households own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and porch or patio.

- Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.

- Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.

- The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens and other European cities. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

- Nearly three-quarters of poor households own a car; 30 percent own two or more cars.

- Ninety-seven percent of poor households have a color television. Over half own two or more color televisions.

- Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

- Seventy-three percent own a microwave oven, more than half have a stereo, and a third have an automatic dishwasher.

Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family isn't hungry, and he had sufficient funds in the past year to meet his family's essential needs. While this individual's life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, activists and politicians.

Even better news is that remaining poverty can readily be reduced, especially among children. Child poverty in the U.S. is caused largely by low levels of parental work and by the absence of fathers from the home. While work and two-parent families are the surest ladders out of poverty, the welfare system continues to reward idleness while failing to provide support to keep families in tact.

To further reduce poverty, welfare should be overhauled: All able-bodied welfare recipients should be required to work or prepare for work in exchange for the aid they receive. Also, new parents in low-income communities who express interest in marriage (and research tells us there are many) should be equipped with the skills they need to create a healthy marriage, rather than be penalized when they do get married.

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

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