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POVERTY!

by Dave
8/30/2006 05:20:00 AM

Yesterday's news that one in eight(1 in 8) Americans live in POVERTY was disconcerting to say the least.   Today the New York Times opines, If you’re still harboring the notion that the economy is "good," prepare to be disabused.   Noted intellectual Charlie Rangel quipped, "I know what they say about putting lipstick on a pig, but I don't see how the Bush administration can spin these numbers in their favor."   Most news coverage regarding the report said something along the lines of "the last decline in poverty was in 2000, the final year of Bill Clinton's presidency, when it fell to 11.3 percent.   That ought to put the nail in the Republican coffin!   But is it meaningful or true?

What does POVERTY mean to you?   The word conjures up images of dirty children drinking dirtier water and crying themselves to bed at night because they haven't had a decent meal.   From my perspective POVERTY means the situation in which a person doesn't have: adequate housing to protect them from the elements, sufficient clothing to stay warm in the winter, or enough food to stave off hunger pains.   I figure an impoverished person generally has almost no material possessions.   Wikipedia says POVERTY "is an economic condition of lacking both money and basic necessities needed to successfully live such as food, water, education, and shelter."   I think these definitions are all fairly consistent, though I don't understand the meaning of "successfully live."

I suspect people in different parts of the world define POVERTY differently.   I do think the people I once drove past near Caracas Venezuela who precariously lived inside cardboard boxes along the side of a mountain, without electricity or a decent water source would define their living condition as POVERTY.   But so would the people with decent apartments, cable television, automobiles, and once a week McDonalds for dinner, living in Camden, New Jersey.   Many of the illegal aliens in this country live in POVERTY by most standards but they might not describe it as such since it is double, triple, or more the standard of living they escaped in their native country when they came here.

In any event, the government does not engage in such subjective definitions.   Instead they use an objective measure: annual income of $10,000 for an individual or $20,000 for a family of four.   That's not a lot of money but it does confuse the situation some.   You can't live in Manhattan on $10,000 but there are many places you can.   Illegal immigrants, particularly from Mexico, might view $10,000 less as the line between POVERTY and middle class and more as the line between middle class and the elite rich.   In Mexico, the average income is less than half the US POVERTY line!

The report which brings us the US POVERTY rate results from the American Community Survey, conducted the US Census Bureau, covering 100,000 households.   In other words, it is the result of self-reported figures.   Of course, the Census Bureau is not the IRS so everybody reports truthfully, don't they?   And what about the sampling techniques used by the USCB?   One report I saw noted "demographers warned that because of the small sample size in counties and cities, some figures may not be credible."

Perhaps more interestingly, the survey reported upon is a new creature.   It was first tested in the nineties and implemented in 2000/2001.   There are undoubtedly kinks to be worked out such as the sampling methodology mentioned above.   The results of the survey should be viewed in that light.   And the basis for the comment "the last decline in poverty was in 2000, the final year of Bill Clinton's presidency" is a comparison between full census data and data found as a result of a newly developed survey with perhaps flawed sampling methods.

The current trend is directly traceable to the beginning of this new survey.   In 2002, the Southeast Missourian noted "after nearly a decade of decline, the U.S. poverty rate stood at 11.7 percent last year, up from 11.3 percent the previous year, which was the lowest level since 1974.   More than 32.9 million people lived in poverty last year, 1.3 million more than in 2000."   What event caused more than one million people to become impoverished in a single year?   And why did the trend continue?

Sure September 11 caused the economy to hiccup.   But there was a recession which preceeded the attacks.   And since then, things have been pretty good.   In March of 2002, CNN reported "The U.S. unemployment rate fell to 5.5 percent in February and businesses added jobs for the first time since last summer."   A chart on this page shows the unemployment rate rose steadily in 2001, particularly sharply after September 11, and then dropped after the beginning of 2002.   Since that time, it dropped steadily until this year when the AP reported, "in July, the unemployment rate rose to a five-month high of 4.8 percent as employers added just 113,000 new jobs."   The number of employed persons, based on the most recent data, stands at about 143 million as compared to 136 million in 2000.   That's a 7 million increase in the number of jobs during the period of rampant growth in poverty!   And the unemployment rate today continues to be better than it has been in the past 3 decades.   Additionally, real After-Tax Income Has Risen By 13.5 Percent Since January 2001.

There just doesn't seem to be a reasonable causal explanation for the American Community Survey's findings.   You can discuss what POVERTY means to you and conclude perhaps the line is placed in the wrong place.   You can criticize the survey as containing improper sampling and statistical methodlogies.   You can complain that with all the new jobs under Bush, it just couldn't be his fault.   But there still is the educated comment from Charlie Rangel about putting lipstick on a pig.   I suspect there is something out there which better explains the increase in poverty under Bush.

Looking at the findings, there were about 31.5 million people living in poverty in 2000 and near 37 million in 2005.   That is an increase of 5.5 million during Bush's two terms.   During the same time period "experts" in the media including CNN, the NY Times, and other MSM estimate that as many as 10 - 20 million illegal immigrants entered the country.   So, in conclusion, one can conclude only one thing.   That is, of the 20 million illegal immigrants to this country under Bush, 14.5 million have successfully climbed the American ladder out of POVERTY!

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