Wednesday, August 29, 2007

U.S. Poverty Rate Declines

Per the U.S. Census Bureau, the 2006 poverty rate has declined, for the first time since 2000.

Five years into a national economic recovery, the share of Americans living in poverty finally dropped.

Despite the declining rate of unemployment we have been experiencing since the tax cuts were implemented, the rate has risen until last year. And as you may guess, this is one piece of data that Democrats have traditionally used against Republicans, especially when the GOP occupies the White House.

While the drop was 0.3% (down from 12.6 to 12.3), you can bet there will still be some harping from some. Take Charlie Rangel, for instance. He can't resist spinning it, despite the fact that the numbers have improved. From the same article:

"Too many Americans find themselves still stuck in the deep hole dug by economic policies favoring the wealthy," House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., said in a statement. "Income remains lower than it was six years ago, poverty is higher, and the number of Americans without health insurance continues to grow."

Despite the news, he still cannot resist turning a positive into a negative. I am confident that if Al Gore or John Kerry were in the Oval Office, there would be lavishing praised statements coming from Rangel's mouth. But that's merely the nature of the political beast.

To understand this a little better, I want to point out some things that this report does not address. Let's start with how we compare to other nations.

Many PYY readers are French, so I am sure they will gloat over the fact that in 2004, their poverty rate was 6.2%, about half of the U.S. rate in 2006. And that's okay, they pay a hell of a lot more taxes than we do here, just to get that bragging right. But in Canada, we see that the rate was higher in 2003, at 15.9%. Rangel couldn't resist tying poverty to lack of healthcare coverage, I wonder how he would spin that one.

But, this isn't about who's better or worse, internationally. You can read the table and draw your own conclusions, if that's all you are interested in.

What we have to understand here is, poverty means different things in different countries. In many African nations, poverty means struggling to get food, water, clothing, and shelter. Active disease processes are usually much higher and in some cases epidemic. Much of that comes from the lack of those essentials I just mentioned, some of it because there is not enough medicine, and certainly no preventative care.

So what does this mean for the U.S.? What does poverty mean here?

Today, the Indianapolis Star profiles three different people, with different set of circumstances, with one thing in common: All three are considered one of those 12.3% we had in 2006. These three are the ones that usually get paraded out. The homeless, the single mom, and the elderly are the most recognizable.

With all of this in mind, this still isn't the entire picture we need to see. What you may not be considering in all of this can be found in this NRO piece by Robert Rector, published yesterday. This is particularly important to know and understand, when we are talking about comparative poverty. Poor people in third world countries, struggle with getting the basics needed to sustain life. They have nothing, nada, zilch. But the poor in the U.S. do have assets and this NRO article I am citing, clearly shows us some perspective.

I highly recommend you read it with an open mind, and think about it.

Yes, we have people in this country that struggle. Yes, we have people that are truly poor. But after reading Mr. Rector's piece, one must question the definition of poor, as it pertains to the United States. Because, from where I sit, poor is certainly a relative term and it all depends on who is using it, and for what purpose.


Greg said...

I have a few comments on this one.

(1) As you point out, everything is relative, especially the notion of poverty. What nation besides the US has fat people who are considered poor?

(2) The system might be set up to favor the rich in some instances (particularly the tax system, right LAS?), but it favors the poor in many others, like health care. If you're poor, you can get the gov't to pay for your housing and food as well. You can get job training for free. So, if the system is rigged against anyone, it's the middle class.

(3) I don't get the connection b/w poverty and the lack of universal health care. The gov't currently insures a lot of people: the elderly, gov't workers, the military and...the poor! The group that is truly at risk in this arena is....the middle class! But neither party cares about the middle class.

(4) There will always be a group of people that have less money than everyone else. That's the way it works in a capitalist system, and I think the US does a decent job of assuming the basic needs of those who can't. The only way to eliminate poverty is to adopt a communist system, which I'm sure Mr. Rangel would not be opposed to.

LASunsett said...


//What nation besides the US has fat people who are considered poor?//

Excellent point. In medieval days, a fat body was a sign of wealth. I bet if the serfs of the middle ages were put into today's American class of poor, they'd think they were royalty.

Rocket said...


4) There will always be a group of people that have less money than everyone else. That's the way it works in a capitalist system

Greg, believe me that's the way it works in a socialist system too.