Saturday, November 08, 2008

How Poor Are America's Poor?

The average "poor" person, as defined by the government, has a living standard far higher than the public imagines. The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:

1. 43% percent of all poor households actu­ally own their own homes. The average home owned by persons classified as poor by the Cen­sus Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

2. 80% of poor households have air conditioning. By contrast, in 1970, only 36% of the entire U.S. population enjoyed air conditioning.

3. The typical poor American has more living space than the average individual living in Paris, Lon­don, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the averagecitizens in foreign countries, not to those classi­fied as poor.)

4. Nearly three-quarters of poor households own a car; 31% own two or more cars.

5. 97% of poor households have a color television; over half own two or more color televisions.

6. 78% percent have a VCR or DVD player; 62% have cable or satellite TV reception.

7. 89% own microwave ovens, more than half have a stereo, and a more than a third have an automatic dishwasher.

Overall, the typical American defined as poor by the government has a car, air conditioning, a refrig­erator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry, and he had suf­ficient funds in the past year to meet his family's essential needs. While this individual's life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.

~Robert Rector of the Heritage Foundation

HT: Don Boudreaux

14 Comments:

At 11/08/2008 11:01 AM, Blogger John B. Chilton said...

Maybe this is why Obama always talks about government doing more for the middle class but rarely mentions the poor.

 
At 11/08/2008 5:29 PM, Anonymous ListenEllipse said...

But do they have health care?

 
At 11/08/2008 5:41 PM, Anonymous Anonymous said...

http://www.youtube.com/watch?v=7qhZGKzP9XE

 
At 11/08/2008 10:09 PM, Blogger Acton. said...

the poor have schip, medicare, and medicaid. and state programs.

 
At 11/09/2008 12:39 AM, Anonymous poor boomer said...

Alas, Boudreau passes along the misleading spin of Robert Rector.

This spin sorely needs to be addressed, and I could go on and on but I'll try to keep this short by toughing on only a few issues.

1. Roughly three-fourths of "poor" homeowner households own their home free and clear, i.e. without home debt. Most of these homes are owned by "poor" retirees who bought their homes decades earlier when they were earning middle class incomes - hence the three bedrooms with the amenities. Note that these homeowners have six-figure net worth; they are not poor in the sense understood by the average American. Note also that while these homeowners are defined as "poor", a childless hamburger flipper working full time at minimum wage and paying half his income for rent is considered "not poor" - but who has the higher standard of living?

1a. "Poor" households can and sometimes do also acquire homes through inheritance or family-insider deals (I knew a welfare recipient who bought her home in a declining neighborhood from her entering-a-nursing-home grandmother for nothing down and a monthly payment less than rent) or by buying low-end trailers. (Yes, someone who owns a $2K trailer and pays lot rent is counted as a homeowner.)

2. Most of the U.S. housing stock has been replaced since 1970; most new housing is built with air conditioning. Even new low-end apartments come with air conditioning whether or not the tenant can afford to actually USE it - amenities such as AC are often included to enhance marketability and their cost is bundled into the rent charged.

3. Most developers build to mainstream, middle class standards. Empty-nester "poor" homeowners enjoy far more living space than they need, but poor renters are not nearly as fortunate. I live in a 2200-sf house with NINE people. To the extent that middle-class housing "filters down" to the poor, poor renters often have more living space than they would prefer to pay for, but the housing the occupy was built to middle-class (i.e. NOT poor) standards; poor renters take what they can get even if not optimal (e.g. too large) for their needs.

4. The working poor often NEED a car to get to and from their jobs. As noted earlier, the "poor" homeowner often is not as poor as on paper they might appear; many own cars. The working poor who do not have access to credit often keep two clunkers in order to have a backup available when their primary clunker breaks down. (I did thios personally.)

5-6-7 have little meaningful significance - consumer goods such as color televisions (okay, just TRY to buy a black-and-white TV these days!) and VCR.DVD players are dirt cheap, especially used ones. I have bought good working color TVs and VCRs for less than $25 and today these used items are even cheaper. Cable or satellite TV might be objectionable, but I would expect the rate to be very high among the elderly (who have a lot of leisure time and theoretically not a lot of money to do much else) and not so high among the non-elderly poor.

 
At 11/09/2008 1:00 AM, Anonymous poor boomer said...

acton said:

the poor have schip, medicare, and medicaid. and state programs.


A: Actually, this generally applies only to children and sometimes their parents, plus "poor" nursing home residents who are generally elderly.

Poor and childless non-elderly adults usually do not qualify for Medicaid unless disabled; even then, the disabled who previously worked for many years usually do not qualify for Medicaid because their income is too high.

For example, in my state, monthly income above approx $600 disqualifies a childless person from Medicaid, and virtually all disabled adults with a substantial work history (i.e. enough work history to qualify for Social Security) receive more than $600 monthly in Social Security disability benefits.

 
At 11/09/2008 1:04 AM, Anonymous poor boomer said...

john b, chilton said:

Maybe this is why Obama always talks about government doing more for the middle class but rarely mentions the poor.


Maybe I'm just cynical, but I think Obama made a strategic move to direct focus on the middle class and away from the poor.

Directing political attention toward the poor has not been particularly helpful to Democrats since the 1960s.

 
At 11/09/2008 3:46 AM, Blogger 1 said...

Good job Boudreaux for getting this excellent bit from Dr. Rector...

Meanwhile poor boomer whines: "Most of these homes are owned by "poor" retirees who bought their homes decades earlier when they were earning middle class incomes - hence the three bedrooms with the amenities"...

Hmmm, you have something credible to back this up I suppose, right?

"Note also that while these homeowners are defined as "poor", a childless hamburger flipper working full time at minimum wage and paying half his income for rent is considered "not poor" - but who has the higher standard of living?"...

Well it just goes to show you that the oh so pitiful 'burger flipper' should've paid attention while in school and also acquired a job skill that pays more than minimum...

BTW how do you know that the 'burger flipper' isn't living at his/her parents home?

You claim (questionable at best coming from you) to know someone on welfare who a relative's home... Hmmm, I think the state should be notified that more welfare payments to this person might have to be curtailed for really poor people...

"Even new low-end apartments come with air conditioning whether or not the tenant can afford to actually USE it - amenities such as AC are often included to enhance marketability and their cost is bundled into the rent charged"...

Again, anything credible to back up that statement?

Here's your chance poor boomer to put YOUR money where YOUR MOUTH is, you can pay the utility bills for these people who you seem to care so much about...

"The working poor often NEED a car to get to and from their jobs"...

Again, according to whom?

"Maybe I'm just cynical, but I think Obama made a strategic move to direct focus on the middle class and away from the poor"...

Since the poor are parasitic and NOT productive, why would Obama look to the poor?

"Actually, this generally applies only to children and sometimes their parents, plus "poor" nursing home residents who are generally elderly"...

Yes indeed, another fraudulent program extorting from the productive so politcos could pander to the parasitic...

An SCHIP Fraud? Boy Who Delivered Democrat SCHIP Rebuttal May Not Be Low-Income

 
At 11/09/2008 10:35 AM, Blogger AK Works said...

I really take issue with "poor boomers" comments. While PB brings up some good points to balance this post - examining from all sides is good - it still does not change a thing or the reality. A working poor "needing" a car is not true. If the "working poor" is working at a job that is outside of public transportation, then chances are, the job will pay well. I know because most of my jobs are considered middle class income jobs. If they are going to low-paying jobs, public transportation is always available. The thing is, how "working poor" are they? It now becomes a relative issue. If they live in middle class areas or they have a family while earning $30K-$36K, then they need a 2nd job. That's the reality. They are not poor, just not making enough by their choices. There's nothing wrong with choosing to live in a better area or having a family - but they are not poor. The government and society shouldn't be forced to help you simply because of your own choices.

Regarding #2 - the air conditioning issue. To PB, I say - so what? If the "poor" are living in an apt with AC and they choose not to use it or can't afford to use, guess what? They use fans. It's only in the extreme heat waves with the elderly that it becomes an issue- and even with that, town governments open up public buildings to shelter the elderly. Also, so what if newer houses have AC built in? It doesn't skew the numbers Bourdreaux described. The "poor" STILL has AC - it's at their disposal. They didn't need to go out and BUY a new one did they? But even THAT is beside the point. Drive around Philly's row houses. Those rowhomes are OLD. And each window has at least 1 AC unit there. Just as you described the TVs, VCRs, DVDs as cheap gadgets, so are AC units. You can buy AC units like microwaves. A lot of them can be bought for less than $500. For your "working poor" that is still a paycheck or two. Which means within a few months' wages, they can easily save up for that kind of purchase.

Regarding PB's #3 - the poor living in spaces larger than they need. Even if developers did build them to "middle class" standards, the fact remains that they live there. If they own the property, they still bought it. If they rent the property, that was what was for rent. Now, I don't know exactly what was counted in Rector's account of living space. In working class towns of MA, for example (where I grew up), the "poor" typically live in apartments or in triple decker homes. There are some duplexes but most working class towns have triple deckers or triplexes. Towns like Norwood, West Roxbury, parts of Dedham - the outskirts of Boston - or closer to Boston, the famed South Boston, Dorchester, etc. Each floor of those buildings are sizable living spaces as well. Most of those buildings are not new - renovated, yes, but not new. And they were still built large. The bottom line is that they were built - and is what is available to the working class for habitation.

Lastly, a point I'll make independent of Rector. In most parts of the world, the surety of being able to each today is the gauge of how poor you are. In the US, even the poor can affordable meals. And while nutrition-wise, the $1 menu on McDonald's is horrendous and leads to obesity, to the world, even being poor in America means you can be fat. That's why they want to come to this country.

As for immigrants, one thing to be said of them is this - they work. My parents work - and still work. I've worked 2 jobs before - and in this economy, I want and will work 2 jobs as well. Not afraid of work - and willing to skimp on the flat-screen TVs, stereos, iphones, blackberries, and all that junk. The idea is work hard, save up. Work hard, save up. This is not new to Americans. The boomer parents generation knew about hardships and being poor and saving up. There was no hyper consumerism. Even today, if you look at Black Enterprises magazine, the stories about African American families scrimping and saving for years to buy a house abound. Temporary hardships for future gain.

But beginning with the Baby Boomers, that all changed. Suddenly, it was about entitlement. That entitlement attitude is what has changed this country.

 
At 11/09/2008 12:56 PM, Anonymous poor boomer said...

1 said:

Meanwhile poor boomer whines: "Most of these homes are owned by "poor" retirees who bought their homes decades earlier when they were earning middle class incomes - hence the three bedrooms with the amenities"...

Hmmm, you have something credible to back this up I suppose, right?



Unlike Rector, I don't get paid a fat salary to research this stuff. Indeed, I don't get paid for doing so at all.

I didn't save the source, but I did find some stats which suggest three-fourths of poor homeowners do not have a mortgage.

Perhaps you can fault me for inferring that these free-and-clear poor homeowners bought their 3BR homes decades earlier when they were working and had middle class incomes.

So if you reject my inference, what's your interpretation? Are (non-elderly) working poor buying free-and-clear homes? (Please tell me how this works so I can do likewise!)

I worked for several years for a small group of convenience stores. We had apx two dozen hourly employees, all earning minimum wage. Our ages were well-distributed from twenties through fifties, and our homeownership rate was zero. Sure, it's anecdotal, but I have never worked with nor met a homeowner earning minimum wage.

Oh, and I don't know that the hamburger flipper isn't living at his/her parents home, but at my convenience store job, we had ONE employee living at home, which gave us a "living-with-parents" rate of apx 5 percent.

You also say:

You claim (questionable at best coming from you) to know someone on welfare who a relative's home... Hmmm, I think the state should be notified that more welfare payments to this person might have to be curtailed for really poor people...

Actually, this was a FOAF. While I did know her through my friend, I didn't know her very well and did not otherwise hang out with her.

And another thing, at the time, I was given the impression that her welfare payment was actually INCREASED to a level greater than she received while renting, because the state (Michigan) made a policy decision that welfare recipients who own homes should get a larger handout so they could stay in their homes. (Just a tiny part of the enormous government subsidy system for homeowners.)

 
At 11/10/2008 11:01 AM, Anonymous Anonymous said...

"If the "working poor" is working at a job that is outside of public transportation, then chances are, the job will pay well."

This is a blanket statement from someone who has lived in a city their whole life. In Michigan as a whole, public transportation is abysmal and if you live outside of the metro detroit or grand rapids areas or outside of a good college town like Ann Arbor or East Lansing you have NO access to public transportation of any kind. I live 15 miles from a gas station, 25 from an expressway and 40 miles from my job...tell me, do I not "need" a car to earn my living. The only places I could work without a car are the local grocery store, bar or a farm. Where I'm from the "poor" people that I know are usually the ones who live in the most obscure out of the way places. Do you expect them to be able to earn any type of living without some type of vehicle.

I guess my point is that we need to understand that you don't have to live in a city to be poor and often times, those poor who do not live in a city have much less access to what resources/information are available.

 
At 11/10/2008 9:44 PM, Anonymous poor boomer said...

ak works said:

If the "working poor" is working at a job that is outside of public transportation, then chances are, the job will pay well. I know because most of my jobs are considered middle class income jobs.


You have GOT to be kidding. Last week I checked out dishwasher and janitor jobs on CL and found over a dozen of these jobs paying within ONE DOLLAR of minimum wage which are not accessible by public transportation.

 
At 11/10/2008 10:22 PM, Anonymous poor boomer said...

Update to ak works:

I just checked CL again for "dishwasher" (D) and "janitor" (J) jobs, this is what I found:

D (14): Definitely accessible by pub trans: 0, Definitely NOT accessible: 8, Probably accessible: 3, Probably NOT accessible: 1, Unknown accessibility (e.g. NO location or shift info provided) 2.

J (8): Definitely accessible: 3, Definitely NOT accessible: 3, Probably accessible: 2.

Comments in job postings include things like:

1: must have reliable transportation as bus access is not available

2: Ability to work all hours, including often late into the night

3: must have reliable transportation (bus route on Macadam does not run late)

4: Dependable & Good Transportation and able/willing to work long & late hours if necessary!

The inaccessible jobs are mostly located in suburbs or rural areas without evening bus service, or otherwise have shifts (e.g. late night) incompatible with public transportation.

My (untested) guess is that employers located in places with good public trans access have an ongoing stream of unsolicited applicants, and thus are less likely to pay for a CL ad. Please don't ask me to test my hypothesis; most of the time when I reply to a CL job posting I don't even get a reply.

 
At 12/15/2008 2:02 AM, Blogger Gelbs said...

Poor Boomer raises some good points, but as for the stuff about dvd/tv/stereo being dirt cheap ... uh, that's the point. the only way any society ever gets richer (materially, that is) is by making once-luxurious goods available in exchange for ever-smaller percentages of income.

 

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