Making The Poverty Numbers Look Better

Source: Decline of the Empire

On Monday the Census Bureau is going release a new Supplemental Poverty Measure designed to make us feel a whole lot better about America’s slide into Third World country status. The New York Times is all over this story, as reported in Bleak Portrait of Poverty Is Off the Mark, Experts Say and elaborated on in Calculating Poverty from their Economix blog.

WASHINGTON — When the Census Bureau said in September that the number of poor Americans had soared by 10 million to rates rarely seen in four decades, commentators called the report “shocking” and “bleak.” Most poverty experts would add another description: “flawed”…

Concocted on the fly a half-century ago, the official poverty measure ignores ever more of what is happening to the poor person’s wallet — good and bad…

On Monday, that may start to change when the Census Bureau releases a long-promised alternate measure meant to do a better job of counting the resources the needy have and the bills they have to pay. Similar measures, quietly published in the past, suggest among other things that safety-net programs have played a large and mostly overlooked role in restraining hardship: as much as half of the reported rise in poverty since 2006 disappears…

One alternate census data set quietly published last week said the number of poor people has grown by 4.6 million since 2006, not by 9.7 million as the bureau reported in September.

At least 39 states showed no statistically significant poverty growth despite surging unemployment, according to an analysis by The New York Times, including Michigan, New York, New Jersey, Ohio, Tennessee and Texas.

God knows, people love to measure things. Physical things, non-material social & economic things, distances, time—you name it. And there are so many ways to do it! You can even do it in such a way that 39 states showed no statistically significant poverty growth since the meltdown in 2008. In fact, I could quickly come up with a Happy Measurement that would definitively show no significant poverty exists in the United States.

The Times comes up with a few examples of how the alternative accounting works. They are quite informative.

One explanation can be found in programs the official count ignores: food stamps and tax credits. Combined the two programs delivered $221 billion across the country last year, according to the Center on Budget and Policy Priorities, more than doubling since 2006.

In Charlotte, Angelique Melton was among the beneficiaries. A divorced mother of two, Ms. Melton, 42, had worked her way up to a $39,000 a year position at a construction management firm. But as building halted in 2009, Ms. Melton lost her job.

Struggling to pay the rent and keep the family adequately fed, she took the only job she could find: a part-time position at Wal-Mart that paid less than half her former salary. With an annual income of about $7,500 — well below the poverty line of $17,400 for a family of three — Ms. Melton was officially poor.

Unofficially she was not…

OK, now the magic happens—Angelique Melton doesn’t live in poverty. Transfer payments and tax credits have changed her status!

After trying to stretch her shrunken income, Ms. Melton signed up for $3,600 a year in food stamps and received $1,800 in nutritional supplements from the Women, Infants and Children program. And her small salary qualified her for large tax credits, which arrive in the form of an annual check — in her case for about $4,000.

Along with housing aid, those subsidies gave her an annual income of nearly $18,800 — no one’s idea of rich, but by the new count not poor.

And here’s the short second example.

Even with assistance, life is a series of hard choices. Ashley Bolton [pictured above] was lifted above the poverty line under the new measure by about $10,000 in federal programs that cushioned her earnings as a hostess at the Original Pancake House in Charlotte.

Still, sometimes she lets her car insurance lapse. She juggles two part-time jobs with classes to become a pharmacy technician, and relies on her mother, who works nights, to put her children to bed.

“I live the recession,” Ms. Bolton said. “All that stuff that happened to people — that’s my life every day.”

By the new poverty measure, the overall poverty rate is only 13.6%, not 15.1%. The change is +1.1% since 2006, not +2.8%. And what about the children? It’s all about the children, right?

Among children, it showed poverty rates falling to 15 percent, from 22 percent, in the official count. That removes about 5.2 million children from poverty. That drop is broadly consistent with what the Urban Institute researchers found in Massachusetts, Illinois and Georgia — an average decline in child poverty of about 24 percent.

I assume this includes Angelique Melton’s two children and Ashley Bolton’s children. After all, with benefits and tax credits, Angelique makes $18,800 per year, which is well above the official rate of $17,400 for a family of three.

Many people say I have a bad attitude. They ask me: why must you be so pessimistic? Why do I always see the glass as half-empty? Can’t I see that the glass is half-full?

Yes, I have seen The Light. Life in America is getting better and better every day in every way. The new measures of poverty in American certainly bear that out. My apologies to all.

Have a good weekend.

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