36 Chambers – The Legendary Journeys: Execution to the max!

November 28, 2011

Poor Adjacent?

Filed under: Curmudgeonliness, Economics — Kevin Feasel @ 6:55 pm

Mickey Kaus tears a new one into the way the New York Times reports results of the Supplemental Poverty Measure.

The idea of “Near Poor” is meaningless when 20% of them “own their homes mortgage-free” (emphasis in original).  If you already own your own home and don’t have any debts owed to others, two can live fairly comfortably on $20K a year in the Midwest.  Even without taking into consideration transfer programs like food stamps and Medicaid, you’d look at about $15K a year after taxes (and a yearly federal income tax refund probably in the $1500 range), or $1250 a month.  After covering our expenses, that would still leave a net positive income of $200-$600 a month, and most likely, a “near-poor” person would not have quite as many frivolous expenses as I tend to rack up, meaning you could probably squeeze another $150 or so a month out without cutting too deep.

Furthermore, if only 25% of your target group does not have health insurance and only 28% work full-time, you’re really digging at the bottom of the sympathy barrel here.  I’m sure there are some people in this category who are having a hard time of things, but as noted above (and as Kaus points out), large swaths of the group likely are doing just fine and have down-sized their earnings requirements because they simply don’t need to earn as much.  If you own your own home, have a fair amount of savings, or are already drawing down on a pension, you don’t need to work so many hours.  Some people still will, but there is a pretty decently-sized percentage of that group who probably are working just enough to feed their lifestyles.  And unlike what the Times editors want you to think, those people aren’t out begging for sympathy or handouts.

There are a few more outstanding points Kaus makes, but the last one I want to point out is that if this is the “near poor,” it would probably behoove us to take a deeper look into what, exactly, “poverty” (as defined by the government) entails.  People who bring this topic up want you to think of urchins and the trappings of pre-industrial society or the fellow working three jobs to make ends meet.  But what percentage of those marked “poor” really are poor, in any serious sense of the word?  The quick answer:  fewer than you would think, due to the fact that the poverty line is a relative term:  when you fix the 16th percentile of a nation as “poor,” then don’t be shocked when 16% of the people come up as poor.

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