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The Percentage of Poor People: A Correction

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A couple days ago, I shared a NY Times article that claims the percentage of poor people in the US hasn’t changed much in 50 years, despite the fact that we have lots of government anti-poverty programs now. Dylan Matthews of Vox quickly responded to the Times article. He argues that it all depends on how we measure poverty, a claim that Matthew Desmond, the author of the Times article, rejected. From Vox:

To come up with a poverty measure, one generally needs two things: a threshold at which a household becomes “poor” and a definition of income. For instance, in 2023, a family of four is defined by the government as officially in poverty in the US if they earn $30,000 or less. That’s the Official Poverty Measure’s threshold….

But what does it mean to earn $30,000 or less? Should we just count cash from a job? What about pensions and retirement accounts? What about Social Security, which is kind of like a pension? What about resources like the Supplemental Nutrition Assistance Program (SNAP) that aren’t money but can be spent in some ways like money? What about health insurance?

These aren’t simple questions to answer … but I think it’s fair to say there’s a broad consensus among researchers that income should be defined very broadly. It should at the very least include things like tax refunds and SNAP that are close to cash, and simpler to include than benefits like health insurance.

That’s why there’s also near-unanimous consensus among poverty researchers that the official poverty measure (OPM) in the United States is a disaster. I have … never heard even one expert argue it is well-designed. I was frankly a little shocked to see Desmond cite it without qualification in his article.

Its biggest flaw is that it uses a restrictive and incoherent definition of income. Some government benefits, like Social Security, Supplemental Security Income (SSI), and Temporary Assistance to Needy Families (TANF), count. But others, like tax credits, SNAP, and health care, don’t count at all. So many programs designed to cut poverty, like SNAP or Medicaid or the earned income tax credit, therefore by definition cannot reduce the official poverty rate because they do not count as income.

The Census Bureau now publishes a supplemental poverty measure (SPM), which uses a much more comprehensive definition of income that includes the social programs the Official Poverty Measure excludes. It also varies thresholds regionally to account for different costs of living….

Using the Official Poverty Measure, poverty hasn’t changed much since 1970. From the Times article:

As estimated by the federal government’s poverty line, 12.6 percent of the U.S. population was poor in 1970; two decades later, it was 13.5 percent; in 2010, it was 15.1 percent; and in 2019 [before COVID], it was 10.5 percent. To graph the share of Americans living in poverty over the past half-century amounts to drawing a line that resembles gently rolling hills.

For 2021, the last year for which the government has released official numbers, the rate was 11.6%, only 1% less than in 1970.

However, researchers using the updated Supplemental Poverty Measure calculated the poverty rate people between 1967 and 2020. They found that 25% of Americans were poor in 1967 (roughly twice as many as the Official Poverty Measure calculated), but — taking into account income from government programs created since 1967 — the percentage had dropped to 11.2% by 2019.

One odd thing about these numbers is that the official poverty rate, which is supposed to be obsolete, and the new, improved rate were almost the same for 2019 (10.5% vs. 11.2%). That’s even though the old calculation doesn’t include income from government programs and the new calculation does. Maybe that’s a statistical fluke, because the official rate is calculated very strangely. As Mr. Matthews explained in an earlier Vox article, “The Official Poverty Rate Is Garbage. The Census Has Found a Better Way”:

It’s worth dwelling on this for a second. The way we measure poverty is based on a 51-year-old analysis of 59-year-old data on food consumption, with no changes other than inflation adjustment. That’s bananas.

Yes, the official government calculation was devised in 1963 based on an estimate of what people ate in 1955. A few things have changed since then.

I conclude from all this that, using the best measure of poverty we have now, the one that takes into account income from government programs, the poverty rate has been cut in half in the past 50 years. (The government releases both sets of numbers these days, although which numbers are reported is another story.)

On the other hand, there are a lot more of us now. In 1967, when there were 197 million of us, a poverty rate of 25% meant America had 49 million poor people. In 2021, there were 332 million of us, so a rate of 11.2% meant the number was still 37 million.

Should there be almost 40 million Americans living in poverty today? According to the Times article, which I still recommend, there wouldn’t be that many if there wasn’t so much exploitation, so many people being taken advantage of, especially poor people, in the labor, housing and financial markets. Or if, for example, Republican senators and one “Democrat” (Joe Manchin of West Virginia) hadn’t refused to keep the expanded Child Tax Credit in effect after it expired at the end of 2021. That change in the law is said to have lifted 3 million children out of poverty. President Biden wants to restore the expanded credit in his 2024 budget but will have to overcome the usual opposition from politicians who claim to support family values.

Why the Percentage of Poor People in America Hasn’t Changed in 50 Years

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If you don’t subscribe to the New York Times, you might not be able to read an important article called “Why Poverty Persists in America”. But the Times and some other papers are making it possible to share “gift” articles, like this one to the poverty article.

By making the article available, I’m not exploiting you and you aren’t being exploited. I’m not making any money out of the transaction and you aren’t spending any. If anything, you’re exploiting the New York Times (it was their idea and they can afford it).

The thesis of the article, however, is that exploitation is rampant in America and it’s the key reason why poverty persists. The author, Matthew Desmond, a Princeton sociologist, discounts the idea that the poor aren’t really poor (“you can’t eat a cellphone”). He argues that the poor (and others) are being taken advantage of.

The primary reason for our stalled progress on poverty reduction has to do with the fact that we have not confronted the unrelenting exploitation of the poor in the labor, housing and financial markets.

… Social scientists have a fairly coolheaded way to measure exploitation: When we are underpaid relative to the value of what we produce, we experience labor exploitation; when we are overcharged relative to the value of something we purchase, we experience consumer exploitation….When we don’t own property or can’t access credit, we become dependent on people who do and can, which in turn invites exploitation….

The author explains in detail how exploitation works in these three markets and how we might insure there’s less of it. Maybe I’ll share more of the article later. For now, here’s how the article ends.

In Tommy Orange’s novel, There There, a man trying to describe the problem of suicides on Native American reservations says: “Kids are jumping out the windows of burning buildings, falling to their deaths. And we think the problem is that they’re jumping.”

The poverty debate has suffered from a similar kind of myopia. For the past half-century, we’ve approached the poverty question by pointing to poor people themselves — posing questions about their work ethic, say, or their welfare benefits — when we should have been focusing on the fire. The question that should serve as a looping incantation, the one we should ask every time we drive past a tent encampment, those tarped American slums smelling of asphalt and bodies, or every time we see someone asleep on the bus, slumped over in work clothes, is simply: Who benefits? Not: Why don’t you find a better job? Or: Why don’t you move? Or: Why don’t you stop taking out payday loans? But: Who is feeding off this?

Those who have amassed the most power and capital bear the most responsibility for America’s vast poverty: political elites who have utterly failed low-income Americans over the past half-century; corporate bosses who have spent and schemed to prioritize profits over families; lobbyists blocking the will of the American people with their self-serving interests; property owners who have exiled the poor from entire cities and fueled the affordable-housing crisis.

Acknowledging this is both crucial and deliciously absolving; it directs our attention upward and distracts us from all the ways (many unintentional) that we — we the secure, the insured, the housed, the college-educated, the protected, the lucky — also contribute to the problem.

Corporations benefit from worker exploitation, sure, but so do consumers, who buy the cheap goods and services the working poor produce, and so do those of us directly or indirectly invested in the stock market. Landlords are not the only ones who benefit from housing exploitation; many homeowners do, too, their property values propped up by the collective effort to make housing scarce and expensive. The banking and payday-lending industries profit from the financial exploitation of the poor, but so do those of us with free checking accounts, as those accounts are subsidized by billions of dollars in overdraft fees.

Living our daily lives in ways that express solidarity with the poor could mean we pay more; anti-exploitative investing could dampen our stock portfolios. By acknowledging those costs, we acknowledge our complicity. Unwinding ourselves from our neighbors’ deprivation and refusing to live as enemies of the poor will require us to pay a price. It’s the price of our restored humanity and a renewed country. 

One funny note. This is the article’s subtitle: “A Pulitzer Prize-winning sociologist offers a new explanation for an intractable problem”. I guess whoever wrote that has never heard of Karl Marx or Das Kapital.

They’re Hard at Work All Around the Nation

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The political party that claims to support workers and “family values” is thinking not enough school children work in slaughterhouses. From The Guardian:

The governor of Arkansas signed a bill that rolls back protections against child labor, eliminating state requirements to verify that children are at least 16 before they receive a job.

In Ohio, lawmakers are considering a bill that would let 14- and 15-year-old children work year-round until 9pm each day.

Lawmakers in Minnesota have filed a bill that would permit children aged 16 and 17 to work construction jobs.

In Iowa, legislative proposals would allow children at least 15 years old to sell alcohol and children at least 14 years old to work specific jobs in meatpacking plants. The Iowa bill would also protect companies from liability if a child got sick or injured or died while at work.

Reports by the New York Times have exposed the hiring of migrant children to work dangerous jobs at factories and elsewhere, flouting federal law.

Meanwhile, the forced birth movement forges ahead. Who else can we jail when a woman ends a pregnancy, aside from doctors, nurses, pharmacists and Uber drivers?

For decades, the mainstream anti-abortion [i.e. forced birth] movement promised that it did not believe women who have abortions should be criminally charged. But now, Republican lawmakers in several US states have introduced legislation proposing homicide and other criminal charges for those seeking abortion care.

The bills have been introduced in states such as Texas, Kentucky, South Carolina, Oklahoma and Arkansas. Some explicitly target medication abortion and self-managed abortion; some look to remove provisions in the law which previously protected pregnant people from criminalization; and others look to establish the fetus as a person from the point of conception.

Finally, the Sunshine State’s mini-Mussolini promises great things ahead. From press critic Margaret Sullivan:

The Florida governor Ron DeSantis likes to brag that he’s just getting started with his rightwing agenda…. He means it as a promise, but it ought to be heard as a threat. That’s particularly true for women whose abortion rights already are being dangerously curtailed and for gay and transgender students who are already being treated as lower life forms. It’s particularly true for those who care about voting rights and press rights, and for those who cherish the power of books and free expression as a foundation of societal well-being….

“DeSantis rules by an authoritarian playbook,” wrote Miami Herald columnist Fabiola Santiago….

Let’s review some of what has happened on his watch with the help of a rubber-stamp Republican state legislature.

The Parental Rights in Education Act, better known as “don’t say gay”, prevents teachers from talking about gender identity and sexual orientation in some elementary-school grades.

The so-called Stop Woke Act restricts how race is discussed in Florida’s schools, colleges and even private workplaces.

Another law pulled a slew of books from public school libraries while they are reviewed for their supposed suitability…. 

Florida’s medical boards now bar transgender youth from gender-affirming medical care such as hormone therapy. State law bans most abortions beyond 15-weeks gestation; a new bill would tighten that to only six weeks.

And, of course, never forget that true liberty means ready access to guns: Florida residents may soon be able to carry firearms without a state license.

Governor courage-to-be-free also wants to limit press rights, including supporting a challenge to the landmark US supreme court decision that for decades has given journalists enough protection from defamation lawsuits to let them do their jobs.

When DeSantis signed into law new restrictions on voting rights, he did so in a room where local reporters were shut out. Fox News, however, got special access….

DeSantis also got his legislature to establish a new and completely unnecessary election crimes office. After the first few cases turned into a legal embarrassment, he got his rubber-stampers to change the law again.

That’s why it’s appalling to see the media lavish him with so much fawning coverage…. The media should be delving into the substance of [his] record, including the kitchen-table economic issues that have nothing to do with performative anti-woke nonsense, instead of letting DeSantis play at will on his favorite field of divisive social issues….

Given all of this, it’s a scary thought that he’s just getting started.

It’s said that the individual states of the Union are “laboratories of democracy”. They’re where policies are often proposed and tried out before they reach the national level.

It’s bad enough Republican experiments like these are happening all over the country. We’ve got to make sure they never escape the labs.

Understanding the Coming Arguments About the Federal Budget

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Paul Krugman’s new column sets the scene for this year’s dispute regarding the federal budget. It will be in the news a lot so it’s good to know what’s going on:

[Today], the White House released its budget [proposal]; Republicans haven’t offered a specific counterproposal, but they seem to be coalescing around a plan released by Russell Vought, [the former president’s] last budget director. Neither plan will become law. Instead, they’re intended to position the two sides for the looming confrontation over the federal debt ceiling.

But let’s not engage in false equivalence. The Biden budget may be political theater, but its numbers make sense. The Republican numbers don’t.

In some ways we’ve been here before. A decade ago President Barack Obama also confronted a Republican-controlled House, which sought to use blackmail over the debt ceiling to extract policy changes it couldn’t have enacted through the normal budget process. And Vought’s plan bears a strong family resemblance to the plan advanced back then by Paul Ryan, who would become speaker of the House in 2015.

But the political and intellectual environment is different this time. In 2013 Washington was full of Very Serious People who were obsessed with the budget deficit and believed Republicans who claimed to be deficit hawks. Ryan, in particular, was the subject of much media swooning, although anyone who looked at the details of his proposal realized that it was flimflam.

These days the deficit scolds are much less influential than they were. The news media is, by and large, treating Republican claims that they have a plan to balance the budget with the ridicule they deserve. And the parties themselves have changed: Democrats have become more unapologetically progressive, while the [Republicans seem] far less interested in fiscal policy, or policy in general, than in the past.

So, about President Biden’s budget: The starting point for this budget is that Biden’s people evidently view deficits as a source of concern, but not a crisis. Overall, Biden’s budget proposes increasing social benefits on a number of fronts even in the face of rising debt. It nonetheless proposes to reduce the budget deficit, but only modestly — it claims to shrink the deficit over the next decade by almost $3 trillion, but that’s less than 1 percent of G.D.P.

How can Biden reduce deficits while expanding social programs? Mainly by raising taxes on corporations and wealthy individuals, with an assist from cost-cutting measures in health care, especially using Medicare’s bargaining power to reduce spending on prescription drugs.

Are Biden’s numbers plausible? Yes. Notably, the economic projections underlying the budget are reasonable, not very different from those of the Congressional Budget Office. The projections even assume a substantial but temporary rise in unemployment over the next year or so [as the Federal Reserve raises interest rates].

Now, even economists like yours truly, who have been fairly relaxed about budget deficits, generally believe that at some point we’ll have to do more than this. We’ll need a much broader effort to bring down health care costs, and we’re also going to need more revenue than you can raise solely by taxing Americans with very high incomes. But Biden’s plan is a step in the right direction.

What about the Republicans? They claim to believe that rising federal debt is a major crisis. But if they really believed that, they’d be willing to accept at least some pain — accept some policies they dislike, take on popular spending programs — in the name of deficit reduction. They aren’t. The Vought proposal calls for preserving the [Orange Menace’s] 2017 tax cuts in full, while also avoiding any politically risky cuts in defense, Social Security or Medicare.

Yet it also claims to balance the budget, which is basically impossible under these constraints. In fact, even with savage cuts to Medicaid and drastically reduced funding for the basic functions of government, Vought is able to claim an eventually balanced budget only by promising that tax cuts and deregulation will cause a big rise in the economy’s growth rate. Tax cutters often make such claims; they never, and I mean never, deliver on their promises.

What I find a bit puzzling is why Republicans are still rallying around this stuff. The modern Republican Party gets its energy from culture war and racial hostility, not faith in the miraculous power of tax cuts and small government. So why not give up on the ghost of Reaganomics? Why not come out for a strong social safety net, but only for straight white people?

Part of the answer may be that the party still needs money from billionaires who want to keep their taxes low. But it also seems to me that the peddlers of right-wing economics have done an extremely good job of marketing their wares to politicians who don’t know or care much about policy substance. That Vought proposal, as I said, looks a lot like Paul Ryan’s plans a decade ago — but it’s titled “A Commitment to End Woke and Weaponized Government,” and somehow manages to mention critical race theory [CRT] — which is not exactly a line item in the budget — not once, not twice, but 16 times.

In any case, where we are now is that Biden is offering a basically reasonable fiscal plan, while Republicans are talking meanspirited nonsense.

A few weeks ago, Krugman was interviewed and offered his opinion about the debt ceiling. He said he knows of at least six different strategies that would allow the government to keep paying its bills and avoid a financial crisis even if Republicans refuse to raise the debt ceiling:

I think a lot of us are operating under the working assumption that the Biden people will deny up till the last minute that they’ll do any of the funny strategies. But then if push actually does come to shove they will. And they’ll mint the trillion dollar coin or they’ll invoke the [14th Amendment to] the constitution. [These] different, exotic strategies … all have zero economic significance. They’re all about just exploiting the fine print in the law to avoid [a crisis].

… America does many things well and many things badly. But one thing we do have is smart lawyers…. I assume that there is an ultra-secret team of lawyers maybe working under Cheyenne Mountain preparing debt strategies.

A Big Story Fox “News” Won’t Cover

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Really good liars never admit they’re lying. From CNN:

Fox News continues to be exposed like never before.

In legal filings made public Tuesday as part of Dominion Voting Systems’ $1.6 billion defamation lawsuit against the right-wing channel, a trove of private text messages, emails, and deposition transcripts offered a new look at how the sausage is made behind the scenes at the channel — and it is ugly. 

The filings expose the face of the network, Tucker Carlson, as a fraud. They show that Rupert Murdoch rejected conspiracy theories about Dominion, despite allowing them to be promoted on his network. And they show the contempt that hosts like Sean Hannity have for some of their colleagues who tried to tell the truth about what actually transpired in the 2020 election.

► Carlson “passionately” hates [the former president]: In a number of private text messages, Carlson was harshly critical of T____…. Carlson [wrote] that T____’s post-election behavior was “disgusting”…. In another text message, two days before the January 6 attack, Carlson said, “We are very, very close to being able to ignore T____ most nights. I truly can’t wait.” Carlson added of T____, “I hate him passionately.” The Fox host said of the Trump presidency, “… We’re all pretending we’ve got a lot to show for it, because admitting what a disaster it’s been [the last four years] is too tough to digest. But come on. There isn’t really an upside to T____.”

â–şMurdoch rejected conspiracies: In his January deposition, Murdoch was repeatedly asked about various electronic voting conspiracy theories — and he rejected all of them. “You’ve never believed that Dominion was involved in an effort to delegitimize and destroy votes for D____ T____, correct?” a Dominion lawyer asked at one point. “… No, I’ve never seen it,” Murdoch replied….

► Hannity and Doocy mocked Fox’s journalists: In a series of November 2020 text messages, Hannity and Steve Doocy attacked the reporting from their colleagues on the so-called “straight news” side of the network. “‘News’ destroyed us,” Hannity complained. “Every day,” Doocy replied. “You don’t piss off the base,” Hannity said. “They don’t care. They are JOURNALISTS,” Doocy texted back. Hannity said he has “warned” people at the network “for years” and there is “NOTHING we can do to fix it.”

► Fox D.C. chief decried “existential crisis” at network: More than a month after the 2020 election, then-Fox News DC Managing Editor Bill Sammon decried the network’s coverage of false election claims in private messages to a colleague, fearing it had become an “existential crisis” for the right-wing channel. “It’s remarkable how weak ratings make good journalists do bad things,” Sammon wrote then-political editor Chris Stirewalt. Stirewalt replied, “It’s a real mess.”

Greg Sargent of The Washington Post comments:

[The] fear that viewers might see telling the truth about D____ T____’s loss as betrayal was widespread inside the network…. [Fox insiders] fumed that candor about 2020 was driving the audience away, prompting viewers to defect to competitors who offered a more comforting cocoon. On the air, some of those personalities kept doling out what they privately admitted were lies.

[This scandal] points to an even bigger story: The right wing media’s long war on the truth. For decades, conservative media outlets have expressly sought to build and capture an audience that would accept only their version of events, and would be cordoned off to place them beyond the reach of mainstream news sources entirely.

“Right wing media have been engaged in a 70-year project to ensure that their audiences only trust conservative news outlets,” Nicole Hemmer, who tells this story in “Messengers of the Right”, her excellent history of conservative media, told me. “They’ve worked to discredit other sources of more-objective information, so that their audiences are unwilling to trust outlets more rooted in reality”….

Hemmer traces the genesis of this broader ideological project to the late 1940s and early 1950s. At the time, she tells me, leading figures on the right made a concerted decision to “create their own media outlets” in the form of periodicals such as Human Events, while spreading “the message that all non-conservative media are deeply biased”.

This intensified during the presidency of Richard M. Nixon, who turned Vice President Spiro Agnew loose to make snarling speeches attacking the television networks…. The influence of right-wing media intensified in the late 1980s with the explosion of talk radio. This capture of conservative audiences was aided, Hemmer notes, by the success of Rush Limbaugh and others who made the message about biased mainstream news “entertaining and profitable.”

Enter Fox News, which was founded in the mid-1990s and attained itscommanding heights in the right-wing information ecosystem in the early 2000s. 

But now the audience’s captivity to an alternate version of events is blowing back on Fox News. Over the years Fox News’s audience has rebelled over other things, such as Hannity’s championing of immigration reform, which incited a backlash from his viewers. Nothing, however, has compared to the current scandal. 

Will there be any repercussions? There should be. Democratic politicians shouldn’t appear on their programs. People giving press conferences shouldn’t answer questions from their “reporters”. Cable TV operators should either drop Fox “News” or make people pay a lot to watch. Businesses and government facilities, including military bases, shouldn’t let Fox run in waiting rooms, offices, etc. Fox management should be ostracized. And there should be more defamation lawsuits.

I’ve read that Fox isn’t telling its viewers about any of this (no surprise). But I hope other right-wing outlets are spreading the news. Don’t watch Fox! They don’t really believe the election was stolen! Or that vaccinations are terribly dangerous! Watch us and visit our site instead! We’re on your side! We promise not to upset you by telling you the truth about anything!

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