Poverty Does Not Mean Destitution

This is the stereotype of poverty in America. It’s also statistically rare and does not reflect a failure of the social safety net.

by James A. Bacon

Americans equate poverty with deprivation. Families wearing rags, living in tarpaper shacks, going hungry and lacking the basic tools to participate in mainstream American life — basically, the whole Great Depression “Grapes of Wrath” thing. A vast poverty industry perpetuates the notion that extreme hardship is not only common but spreading across the land and the progressive worldview of America as a fundamentally unjust society draws succor from it, so it is rarely challenged.

But “poverty” as usually discussed in the United States does not describe peoples’ actual living conditions, it describes their taxable income. People below a certain “poverty threshhold” are declared to be poor. But that definition is meaningless as a characterization of how people actually live because it excludes massive transfer payments and social services programs designed to cushion “the poor” from deprivation. Thus, Medicaid will spend $276 billion in federal dollars this year to provide health care services to the poor. Other mandatory programs (not including Social Security and Medicare), most of which are means tested, are budgeted for $713 billion. Transfer payments to the poor amount to $1 trillion in a $15.2 trillion economy. (Please note: Those numbers do not include Social Security, Medicare, discretionary federal funding for the poor, state Medicaid matching funds, state funding for the poor, or private charity.)

So, how do “poor” people live? What is their material standard of living? It varies, of course. Some truly are destitute, though that condition is usually the result of temporary misfortune, thus transitory, or the consequence of substance abuse. For the most part, the poor enjoy many of the same material amenities that middle-class Americans enjoyed a generation or two ago. That’s the message of a new Heritage Foundation report, “Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today?” Write Robert Rector and Rachel Sheffield:

In 2005, the typical household defined as poor by the government had a car and air conditioning. For entertainment, the household had two color televisions, cable or satellite TV, a DVD player, and a VCR. If there were children, especially boys, in the home, the family had a game system, such as an Xbox or a PlayStation. In the kitchen, the household had a refrigerator, an oven and stove, and a microwave. Other household conveniences included a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker.

The home of the typical poor family was not overcrowded and was in good repair. In fact, the typical poor American had more living space than the average European. The typical poor American family was also able to obtain medical care when needed. By its own report, the typical family was not hungry and had sufficient funds during the past year to meet all essential needs.

Poor families certainly struggle to make ends meet, but in most cases, they are struggling to pay for air conditioning and the cable TV bill as well as to put food on the table. Their living standards are far different from the images of dire deprivation promoted by activists and the mainstream media.

Destitution does exist. But it’s usually the result of substance abuse. I’ve visited the houses of poor people that are spare but livable. And I’ve seen crack houses where every stick of furniture, indeed every belonging but a mattress, has been hawked or pawned for cash. The latter is a tragedy for those involved, especially innocent children, but it does not represent a failure of American society, nor should it justify increased entitlements during a period of fiscal austerity.

More common, I would wager, are instances in which people game the system. They get themselves declared disabled, then earn cash on the side as carpenters, hair dressers, landscapers or whatever — never reporting their income. But the poverty lobby isn’t the slightest bit interested in these cases. For those who make a living in the compassion industry, the more poor people the better.

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19 responses to “Poverty Does Not Mean Destitution”

  1. “….that definition is meaningless as a characterization of how people actually live because it excludes massive transfer payments and social services programs designed to cushion “the poor” from deprivation. ”

    So, the programs work?

  2. “…. in which people game the system. They get themselves declared disabled, then earn cash on the side as carpenters, hair dressers, landscapers or whatever —”

    When I was disabled I was ALLOWED to earn money on the side, and quite a genersous amount. I think I was allowed to earn up to 50% of my previous salary, before they started reducing my disability payment.

    The reason for this is to encourage people to try to go back to work, rather than penalizing them by taking awaya dollar for dollar whatever they are able to earn.

    It was a dubious thing, whether I would ever be able to work again, and I have to say that my first job was pretty much a charity case, because my condition was sufficiently precarious that on any given day I might be able to contribute very little.

    I know there are people who game the system, but this kind of atitude is offensive to those that don’t. And that includes people who might be able to work sometimes, and not others. I was in that condition for some 18 months before I was well enough to take a full time job, And that was AFTER 18 months of being completely disabled.

    You tell me, was I gaming the system, playing by the rules I was given, or actively trying to recover? If you saw me from the outside, how would you know?

  3. Nobody’s accusing you of gaming the system. To say that *some* people game the system is not to say that *all* do. As you yourself admit, “there are people who game the system.”

    If I saw you from the outside, how would I know? Well, that’s precisely the issue, isn’t it? Do the bureaucrats who administer these programs really know? Do they care?

  4. More importantly, do you have any evidence that said system-gamers are a significant percentage of welfare recipients, much less a majority?

    I assume not; if so you should have included it in your article.

    1. Hi, Bryan, I don’t have any idea what percentage welfare recipients are gaming the system. Judging by the immense size of the cash economy — people doing work and getting paid in cash — I would hazard a guess that it’s a fairly significant number. Also, we can get an inkling by making reference to the rampant fraud in Medicare and Medicaid, although the fraud in those instances often consist of dishonest providers. But the bottom line is, I don’t know. Nobody knows.

      I suppose you could put the onus on me to prove that some (not all, just some) people are cheating the system. I would put the onus on state and federal government to put mechanisms in place to ensure that people aren’t gaming the system.

      1. I’m not putting the onus on you to prove that some people are gaming the system. I think we can all stipulate that. However, I would put the onus on you* to prove that it is a significant percentage of dollars spent, and therefore worth the cost of reform.

        *Not you personally, necessarily, so much as those who are calling for change.

  5. larryg Avatar

    we know this. Of the 3 – social security, Medicare Part Al and Disability Insurance, the later is the one that is now technically “bankrupt” because it pays out more than it takes in -in FICA taxes.

    I think Jim makes an excellent point about poverty and “destitution”. I can tell you of kids who have game boys and even cell phones who are on the school subsidized lunch program and their parents receive other assistance such as food stamps.

    Medicare PartB recipients pay $100 a month fo health insurance while many of them own 2, 3 cars and a primary residence and a vacation home but they still pay $100 a month while having replacement hip and knee operations that costs many thousands dollars more than what they have paid in premiums.

    these are examples of how the entitlement mentality of this country has gone “rotten” and is the justifiable crux of many Conservatives view that entitlement programs are corrupt and need to go away all together.

    How do we keep these programs properly targeted and kept away from those who on purpose or “accidentally” …. “game” these program – ultimately to the death of the programs if we don’t deal with the problem?

  6. The ultimate losers in the whole rich vs. poor debate are the people in the middle – particularly small business owners. The folks in the middle will never make enough to become “rich” and will always make too much to be classified as “poor”.

    There’s nothing wrong with being in the middle until you start watching what the government does with all your damn money.

    I had a family member that worked for a major manufacturing company at a factory job when they still existed. When the plant shut down for three weeks EVERY year because business was slow all they had to do was call a 1-800 number, enter a code, and the unemployment check would start arriving.

    My old man worked who was a small business owner and worked his tail off had no such luxury if business was bad. And to add insult to injury he was the one effectively paying for his relatives unemployment check!

    My old man knew he had lost his marbles when a grad student walked in the place one day and wanted to do a “project” on being a small business owner.

    To make a long story short, the kid walked in a few weeks later and said he got a A on the project. My old man asked him what the jist of the paper was about and the kid said it was simple – he told him you’d be better off going to work for somebody else because of the lack of benefits!

    You guys will love this one;

    “Some federal workers more likely to die than lose jobs – http://tinyurl.com/3s2tcgv

  7. ? Do the bureaucrats who administer these programs really know? Do they care?

    Yes. I had periodic interviews and visits to a doctor, not of my choosing to evaluate my status.

  8. They have no incentive to know or care….they have a job for life.

  9. RBV: I believe that your father could have organized his business such that he was an employee. The company would pay benefits including unemployment insurance. He could then lay himself off and collect his whopping $360 a month, or whatever. How he hires himself back, after laying himself off, I am not sure, but it is also posible for a business owner to file for partial unemployment.

    My point is that it makes no difference what someone owns when they become unemployed or disabled, or how badly they choose to spend their money: the only issue is are you legitimately nemployed or legitimately disabled. With disability in particular, it is not easy to tell from an outside view.

    Given that someone has paid into a system, why should their right to draw back from it or benefit from it, be different from someone else, just because they own a gameboy?

    I believe that the attitudes and examples displayed here are fundamentally mean spirited and selfish. We have people whose job it is to prevent fraud. While it is true that anyone can incrementally improve job performance, it is also true that the hardest thing a manager has to learn is to let his experts do their job.

    It is not true that government employeees have a job for life, although there are procedures that must be followed. These procedures either give an employee and opportunity to improve, or so stigmatize his career that he is better off leaving.

    The Civil Service Commission defines a
    MAJOR DISCIPLINARY ACTION as and action taken against a permanent employee or an employee in their working test period resulting in suspension or fine or more than 5 days, demotion, or termination; or the accumulation of minor disciplinary actions exceeding 15 days or more in a calendar year; or where an employee receives more than 3 suspensions or fines of five working days or less in a calendar year.

    The federal employee turnover rate varies from 15% for those with less than five years of service to less than 2% for those with more than 20 years of service, which suggests either that the government does a good job of weeding out the losers, or else that good employees with better opportunities voluntarily leave, depending on ones prior beliefs.

    For the state government, turnver has averaged around 12% for the past six years. Which is typical for public employees. The private sector averages around 17%: either the private sector does a worse job of recruiting people, or it treats them worse – take your pick.

    Having said all that, do I beleive the system can be improved? Yes, but not for the reasons stated by RBV, Larry and Jim Bacon.

    Argument by anecdote is when you prove a point with a story. It is a very compelling argument, because people like stories about other people more than they like cold, hard facts. Too often, though, the argument by anecdote is used when the facts are stacked heavily against a position. If you don’t have the facts, tell a story. People will believe the anecdote because it demonstrates what they themselves believe to be true. That’s why you’ll find more arguments by anecdotes proffered by those on the losing end of the “facts” battle. It is a logical fallacy, and once you recognize the pattern, it no longer even matters if the story is true because the structure of the argument is wrong.

  10. RBV: ever consider that maybe the grad student was right?

    I’m not suggesting that he was, but given your description of your fathers position, it sure sounds that way.

  11. I know a fellow who is a construction laborer. He is a good worker, as evidenced by the fact he has never been laid off. He is a product of Virginia’s segregated schools, and can barely read or write.

    Eventually he was able to buy a modest townhome, which he was very proud of, but his wife became mentally ill, and he eventually lost the home. He now lives in a rather poor rental situation, bad neighborhood, etc. He gets some day care help for his wife, but his daugheter had to drop out of community college to help care for her. She works part time fast food jobs.

    At this point, probably nothing will help my friend or his wife: their die has been cast. But with real disability help for the wife, the daughter might have a chance. Otherwise, she is pretty much trapped.

    This is an anecdotal argument. You see the problem with it?

    It either does not prove a thing, or it supports your argument that public employees are not doing their job, or it suggests they don’t have the tools to do their job. It is a waste all right. But like recycling for example, you can waste resources by not doing enough, or by doing too much.

  12. larryg Avatar

    I don’t think it is mean-spirited to point out that if we continue to pay out more in entitlements that they are collecting in premiums – those programs will fail and no one will receive anything.

    It’s not mean-spirited to point out that if State Farm sells you auto insurance for less than they are paying out in claims that at some point – you will have no insurance with them and probably will have to pay a lot more to get replacement insurance.

    The problem with the govt on this issue is that they cannot do what State Farm does to keep from going broke – i.e. increase premiums and cut coverage – to adapt and by doing so – not go bankrupt.

    in terms of RBV’s “bureaucrats” , how many times have we heard that the mean and nasty insurance company pointy-head, bean-counters refuses to pay for some poor kid’s operation?

    I don’t see govt bureaucrats as substantially different from private company counter-parts although it’s always fun to claim that the govt version is worse.

  13. Part of the bureaucrats job is to balance their budgets. If they are not doing that, they should be disciplined and or replaced. I don;t think it is mean sprited to say that, but I don;t think that is what was said above.

    Now you are making a reasonable argument, and it does not have anything to do with what a recipient owns.

  14. Hydra, we can swap stories all day long. The point is the system is broken….for some more than others.

    As for the grad student, he was right….that was my point. I completly agree…if you pay into a system you should be able to draw from it. However, we have made it nearly impossible for certain groups of people to receive any benefit from the system.

    I dont see what is mean spirited about pointing out those inequalities.

  15. Richard Avatar

    Sorry to revive an old thread, and I recognize that there are legitimate issues, but my writerly sensitivities were quite shocked by the many gratuitous statements, such as the last paragraph:

    “More common, I would wager, are instances in which people game the system. They get themselves declared disabled, then earn cash on the side as carpenters, hair dressers, landscapers or whatever — never reporting their income. But the poverty lobby isn’t the slightest bit interested in these cases. For those who make a living in the compassion industry, the more poor people the better.”

    Really? Most individuals on disability are committing fraud and tax evasion? “Carpenters, hair dressers, landscapers or whatever” – what about house painters, jazz musicians, and communists? And social workers ignore fraud because they don’t want to lose their clients? That’s pretty irrational and in actuality a significant part of the job is looking for fraud.

    [Don’t you really just want to say that it’s all the fault of the LIBERALS whose greatest pleasure would be to make us all slaves of the federal bureaucracy?]

  16. Richard, come to think of it, house painters, jazz musicians and communists are all pretty good candidates for fraud, too. No, seriously, I was just throwing out random occupations that tend to get a lot of their income under the table. Do you think that many people *don’t* cheat on their taxes? Do you think many people *don’t* double dip, taking under-the-table income and government benefits at the same time?

    I’m not saying that *most* people do. I don’t know what percentage does. But I can give you plenty of anecdotal examples of people who do. It’s a real phenomenon.

    I’m not saying it’s the fault of the liberals, although…. I would have to say that liberals do seem to get pretty defensive when I bring up the topic. They tend to deny the problem exists. Now that you mention it, maybe it *is* the fault of the liberals!

  17. Richard Avatar

    I may hold you to an unreasonable standard for a writer who must generate reams of entertaining verbiage, and of course I am one of those defensive liberals. Liberals like myself focus on inequities fostered by society and the government, and when government activity intended to deal with those inequities is criticized by those who dislike the activity, and the critics base their criticism on particular (and to our minds, peripheral and insignificant when considering the overall purpose and effect) issues , the liberal reaction is to defend the programs and to minimize the particular issues/problems. For example, there are clearly individuals [perhaps many, meaning more than a few but less than a majority ;)] who game the disability system, but does that mean that the entire system is corrupt and a liberal plot? Some conservatives would answer yes, that the system itself is a fraud, and the disability safety net should be taken away. Is that your view? Or are you saying that the safety net has problems that need to be addressed? If the latter, we are in full agreement.

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