U.S. Poverty: Bad, But Not as Bad as We Think

Poverty is still a problem. Inflation and preferential policies for the super rich make it clear that a dollar doesn't go for most of us as far as it used to go. But a recent report about poverty made it seem worse than it actually is.

The Deseret News recently reported

The nation's real median income rose for the first time since 1999, while the poverty rate remained virtually unchanged at 12.6 percent, marking the end of four consecutive years of increasing poverty, according to a new U.S. Census Bureau report.

...the fact that poverty rates failed to decline — despite four years of economic growth in Utah and across the country — is of particular concern, Utah anti-poverty advocates said Tuesday. And the number of seniors in poverty rose from 3.5 million in 2004 to 3.6 million in 2005, according to the report.

However, the nearly exclusive reason that the poverty rate remained unchanged (didn't go down) is due to the influx of Hispanic immigrants, legal and illegal, who start out lower on the poverty ladder (who probably weren't considered as living in poverty when they were in their home countries). Investor's Business Daily describes it this way:

Last year, the poverty rate was 12.3%, down slightly from 12.6% in 2005 but higher than the 11.3% in 2000, the recent low. It was also higher than the 11.8% average for the 1970s. So the conventional wisdom seems amply corroborated.

It isn't. Look again at the numbers. In 2006, there were 36.5 million people in poverty. That's the figure that translates into the 12.3% poverty rate. In 1990, the population was smaller, and there were 33.6 million people in poverty, a rate of 13.5%. The increase from 1990 to 2006 was 2.9 million people (36.5 million minus 33.6 million). Hispanics accounted for all of the gain.

Consider: From 1990 to 2006, the number of poor Hispanics increased 3.2 million, from 6 million to 9.2 million. Meanwhile, the number of non-Hispanic whites in poverty fell from 16.6 million (poverty rate: 8.8%) in 1990 to 16 million (8.2%) in 2006. Among blacks, there was a decline from 9.8 million in 1990 (poverty rate: 31.9%) to 9 million (24.3%) in 2006. White and black poverty has risen somewhat since 2000, but is down over longer periods.

Only an act of willful denial can separate immigration and poverty.

The increase among Hispanics must be concentrated among immigrants, legal and illegal, as well as their American-born children. Yet this story goes largely untold.

So yes, it's bad. But it's important to know the why behind the numbers. And it doesn't help matters to exaggerate by improper inference from the numbers.


  1. The problem with the poverty line is that it assumes that a cell phone, cable TV, a couple of SUV's and a huge house are the necessities of life.

    Up until last year, my family and I were considered below the poverty line. My main motivation to rise above it, was so that I would stop being offered the Earned Income Tax Credit.

    Despite living in poverty, we have a decent home, drive 2 cars, eat well and have a ton of fun. Actually, I would be considered a millionaire where I immigrated from (legally I might add!) and yet for some reason I am classified as being in poverty?!?

  2. Interesting concept (what officially constitutes poverty). I was just listening to a Republican presidential candidate (not Ron Paul) on the radio, who supported a consumption tax. Part of his plan was a monthly rebate check for those who fell below the poverty line.

  3. I think that's called the Dole in other countries - Don't even get me started on that one!!

    OK, maybe a little... I lived in New Zealand for a while, and before I could register to find a job I had to sign up for the dole, through the welfare department... 3 weeks later when I got a job, and my first dole check ($200 bucks - Not too much since I was living at home with my parents ?!?) I called to cancel, and had to jump through all kinds of hoops. The most disturbing was a lady who asked if I was sure about the job and wanted to know if I wanted to stay on government welfare a little longer, just in case...

    Just more encouragement for people to suck on the teet of the government...


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