Robert Samuelson invokes a familiar canard in his column complaining about the Obama administration’s choice to use a new definition of poverty developed by the National Academies of Science:
The official poverty measure obscures this by counting only pre-tax cash income and ignoring other sources of support. These include the earned-income tax credit (a rebate to low-income workers), food stamps, health insurance (Medicaid), and housing and energy subsidies. Spending by poor households from all sources may be double their reported income, reports a study by Nicholas Eberstadt of the American Enterprise Institute. Although many poor live hand-to-mouth, they’ve participated in rising living standards. In 2005, 91 percent had microwaves, 79 percent air conditioning and 48 percent cellphones. [Emphasis mine]
With microwaves, air conditioning and cell phones, it’s clear that poor people aren’t nearly as poor as we think they are! I mean, it’s not as if poverty is concentrated in the nation’s two warmest regions — the South and the West — where air conditioning is a necessity, and it’s not as if cell phones are a cheaper alternative to landlines, and critical to navigating the world of low-wage service jobs. I guess you could call microwaves luxuries, but even that’s ignoring the fact that the are for more likely to consume frozen and prepared foods that need microwaving.
So in Samuelson’s column, what you have is another attempt to minimize the actual poverty of poor people by pointing to items that are actually necessary to surviving in low-wage service economy. Indeed, by the end of the piece, Samuelson is a step away from lamenting that the new poverty measures will force the government to do more to combat poverty, as if what we do now is adequate. Of course, given Samuelson’s routine Hooverism — “deficits are more important than everything else!” — and his disdain for Social Security and Medicare, I guess I shouldn’t be surprised.
This has been the classic argument from time-immemorial. Never mind that should one of these air-conditioned, microwaving, cell-phone-owning people ever try to move past their present economic situation, they will find it quite impossible to ever own a 401k, or establish a legacy for their children. And good luck if you develop a medical condition!
The new threshold is keyed not to people’s ability to afford the necessities of life, but to their expenditures relative to what households who are “not poor, but somewhat below the median” spend on food, shelter, clothing and utilities (FSCU).
If the necessary or basic FSCU bundle becomes cheaper, everyone’s standard of living will rise though households’ total expenditures might remain constant. That’s reflected in the quoted paragraph: decades ago, poor people had to do without “necessities” such as air conditioning and microwaves; but today, because these goods have become so cheap, they can afford to have them even though real wage growth has stagnated. But the new poverty measure would take no account of such a general increase in living standards.
yup, it used to be you weren’t poor if you had a car…