“We declared war on poverty,” Ronald Reagan famously proclaimed, “and poverty won.” And indeed, as measured by the official poverty rate, the United States seems to have made very little progress in curbing poverty. But important new research released this week by Bruce D. Meyer of the University of Chicago and James X. Sullivan of the University of Notre Dame indicates that the official measure is giving us an extremely misleading view. In fact, poverty fell substantially over the past several decades before rising a bit during the Great Recession.
Neither liberals nor conservatives have been eager to embrace this idea—the former to bolster support for new programs and the latter to dismiss the efficacy of what’s already been done. But as Meyer pointed out in a talk at the Brookings Institution on Thursday, the way the government measures poverty actually by definition excludes the possibility that public programs are lifting families out of poverty. The truth, when examined correctly, is that we’ve hit upon a very effective means of waging war on poverty—give money to poor people—and we could make even more progress by doing even more of it.
The official poverty line was created in 1963 by food and nutrition economist Mollie Orshansky and hasn’t been updated since.
Her method, though arguably appropriate at the time, is incredibly crude by modern standards. Her idea was to calculate the cost of a nutritionally adequate diet for a given-size family. Then she used the early-‘60s rule of thumb that food was about one-third the typical family’s budget. So calculate the income needed to prevent malnutrition, triple it, and there’s your poverty line.
Needless to say, this has only a hazy relationship with modern living standards. Worse, because at the time there were few government programs designed to help the poor, it refers to income before taxes and cash transfer payments. The formula also neglects to include the value of in-kind public services such as food stamps and Medicaid, and smaller programs like housing vouchers.
Just so we’re clear on this, Obama’s health care reform did not, unfortunately, grant universal health care access to all Americans. All it does is require all Americans to purchase private health insurance coverage, and consequently prohibits private insurers from barring someone from purchasing said coverage.
However, the reform law does absolutely nothing to address the prohibitively high rising costs of health care; the massive profits accrued by private health insurers; or the ability for these private insurers to render health care virtually unaffordable to its subscribers through extremely high co-pays, deductibles, premiums, etc.
In recent years, the leading cause of personal bankruptcy had been medical expenses. This will not change at all under “Obamacare.”
In fact, the strong possibility exists that even more people than ever will be without access to health care due to the combination of a generalized decrease in most people’s personal wealth as a result of the recession, coupled with the tendency of the parasitical, private health insurers to constantly bilk Americans for all their worth.
If the insurance companies are no longer allowed to legally bar a person from purchasing insurance coverage, they can certainly make it impossible for a person to afford to use that insurance coverage. In fact, they have an interest in doing so. As long as people are required to buy insurance and pay the annual or monthly premium to the company, the insurer stands to gain the most when people either do not have to, or cannot afford to, actually see a doctor. The insurance company isn’t billed by the hospital for any services, and the profit margins of the insurance CEO’s skyrockets.
There is a provision in obamacare called the medical loss ratio, it says that insurance companies must use 80% of collected premiums on actual healthcare. 85% for larger group insurers. If they fail to do so, the difference must me returned to the customer.
As income rises, the frequency of fast food visits rise as well, at least until income hits $60,000 a year; sit-down restaurant visits just keep on rising. (The y axis is frequency of visits)
Obesity rates in the United States are highest among the poor, and high up on most lists of reasons why, you’ll find the truism that fast food is cheap food, and the poor, who can’t afford healthier fare, are its main consumers. A new study suggests, however, that the people eating the most fast food are middle class, with incomes as high as $60,000 a year. Using a national database of about 5,000 people, researchers at UC Davis found that the frequency of people’s visits to fast-food restaurants increased with rising household income until $60,000, when frequency started to go down (though, interestingly, people making more than $100,000 still went to fast food more than those making $20,000). Visits to sit-down restaurants, on the other hand, increased with rising income and just kept on growing.
The research indicates that ascribing a fast-food habit to the poor alone ignores the rest of the population’s predilections and may be a distraction from other causes of obesity in Americans of all income levels. As the scientists point out, restaurant meals in general are much higher in fat than home-cooked meals, yet people with larger incomes eat out far more frequently than the poor, while maintaining lower obesity rates. Restaurants are only part of the picture. In fact, given that a straight diet of fast food is beyond the means of many poor families, perhaps rock-bottom cheap, high-calorie foods sold in grocery stores are more of a problem than McDonald’s.
Image courtesy of Leigh and Kim and Population Health Management
— Howard Zinn (via cultureofresistance)
Most Americans know the facts about low-wage work, but many have been lucky enough to avoid actually having to live on $8 or $9 an hour.
A computer game called Spent gives you the opportunity to see what it would be like to walk in a poor person’s shoes.
The game, by an advertising firm called McKinney and Urban Ministries of Durham, N.C., starts with a choice: Would you like to be a server, a warehouse worker or a temp?
From there, the choices get more difficult: Should you pay to get your pet medical care, or let the animal suffer? Should you go to the dentist or suffer yourself and save some bucks?
The game is interspersed with facts about the choices people with very little money are making every day, and the consequences of those choices.
Want to see how well you could manage your money on a very low wage? Try it out here.
There’s a growing consensus in the right-leaning blogosphere this afternoon following the morning’s Census Bureau report of record high U.S. poverty: American poor people aren’t like other kinds of poor people. While left-wing standard bearers busy themselves with the declining real median household income or poverty rate charts distributed by race and age, the focus on the right is on the lifestyles of the poor and a rejection of the statistics provided by the Census Bureau.
Shameful excerpts assembled here by AtlanticWire.
There seems to be a distinct trend, and it’s pretty concentrated in the south.