America’s Unexceptional Poverty Rate

National Review ^ | 11/03/2015 | by MICHAEL J. PETRILLI & BRANDON L. WRIGHT

[SeekAndFind]

Bernie Sanders often claims that America has the highest child-poverty rate of any advanced democracy in the world. He uses this fact to justify his call for a European-style social-welfare state. But what if it’s simply not true?

In a new article for the journal Education Next, we demonstrate that when cross-national poverty rates are calculated appropriately, it becomes clear that America is rather unexceptional, at least on this score. We have a significantly lower proportion of children living in poverty than Ireland and the United Kingdom, and about the same as Germany and even Finland.

How can that be? For years, scholars, international organizations, and liberals have put forward the notion that America has sky-high rates of poverty, especially childhood poverty. But the measures they used were “relative”; they considered a family to be poor if it earned less than half of its own country’s median income.

The simplicity of this approach makes it appealing, but also highly misleading. That’s because it’s more a measure of income inequality than of poverty.

To see why it’s so misleading, we analyzed how relative poverty rates compare with absolute poverty rates for each of the American states. For relative poverty, we calculated the proportion of people living in households that earn less than half of their own state’s median income. For absolute poverty, we looked at the percentage of all people in a state living in households below the federal poverty line.

RELATED: Poverty in the U.S. — We Spend Much More Per Person on Social Welfare than Europe Does

For some states, whether one looks at relative poverty or absolute poverty makes little difference. Arizona, Mississippi, and Louisiana have a lot of poor people however you slice the data.

But it makes a big difference for wealthier states, like Massachusetts and Connecticut. Their absolute-poverty rates are among the lowest in the country, but their relative-poverty rates are above average — higher than those for Texas, Tennessee, and Oklahoma. Massachusetts has a higher relative-poverty rate than Georgia, Kentucky, and Alabama.

Of course, Massachusetts doesn’t really have more poverty than Alabama — but it does have more income inequality. And the same dynamic plays out when we use relative-poverty rates to compare countries: The United States doesn’t really have more childhood poverty than Germany or the U.K. — but it does have more income inequality.

Because the United States is wealthier than most of our international competitors, many of the U.S. households that are counted as poor on a relative measure would be considered middle-class on an absolute measure. That’s because the amount of money they earn would put them far above the median incomes of these other nations.

RELATED: Poverty, Despair, and Big Government

Why is this important? Senator Sanders is certainly correct that poverty is a problem in America, and we should work on ways to reduce it. But he’s incorrect when he says that it’s worse here than in other large, industrialized nations. That raises serious questions about his critique of American-style capitalism.

It’s also important because some Americans like to point to our supposedly high poverty rate as an excuse for our lackluster international performance on a variety of social indicators, from health-care outcomes to test scores and beyond. Some teachers’-union leaders, in particular, like to argue that we have a “poverty crisis,” not an “education crisis.” That excuse turns out to be a crutch that’s unfounded in the evidence.

— Michael J. Petrilli and Brandon L. Wright are president and managing editor, respectively, of the Thomas B. Fordham Institute, a leading education-policy think tank. Petrilli is also research fellow at the Hoover Institution and executive editor of Education Next.

[Tallguy]

To see why it's so misleading, we analyzed how relative poverty rates compare with absolute poverty rates for each of the American states. For relative poverty, we calculated the proportion of people living in households that earn less than half of their own state’s median income. For absolute poverty, we looked at the percentage of all people in a state living in households below the federal poverty line."

This is easy. It takes 2 incomes to raise kids today -- that's baked into the government assumptions. The largest slice of single-parent households are almost automatically making below the median rate. There's your "relative poverty" right there in a nutshell.

But the goverment doesn't want to address economic & tax policies that have created the requirments for a 2-income household.

[ilovesarah2012]

Does he blame it on single parent households?

[IC Ken]

America....we pay people to be poor.

[Skooz]

bfl

[a fool in paradise]

Tens of millions of illegal immigrants streaming over the border having anchor babies. There are always going to be poor children in America.

It’s not America’s fault.

[from occupied ga]

Leftists lie - about everything. If they told the truth even to themselves their entire world view would fall apart

[Mrs. Don-o]

"Poverty"

Tagline.

[Travis T. OJustice]

Here in CT, being on welfare is the equivalent of a $24/hour job. Why the hell would any lazy young kid bother with going to work? Unnngh.

[Mase]

Bookmark

[CharlesOConnell]

African-American writer Robert Woodson, Heritage Foundation Retrospective on The Kerner Commission of the mid 1960s:

http://www.heritage.org/research/lecture/the-kerner-commission-report

There was a rich tradition of economic development and self-sufficiency among free blacks even during slavery. It is interesting, however, that the advocates of civil rights had to abandon publications that discussed the strength of black communities in order for them to have civil rights laws applied to them. With these demands, we entered a “grievance period” in which we reported only on our shortcomings and our failings. This had devastating results on attitudes and goals. In addition, the civil rights movement was incubated in the same womb as the poverty movement. Therefore, the moral authority of one was extended to the other. Criticizing poverty programs meant being called a racist. It legitimized a victim mentality and undermined a spirit of self-help and personal responsibility.

As we conducted interviews among many older blacks who were active in the business arena, we found that 68 percent of those blacks who are second-generation college graduates were born into entrepreneurial households. These were the people that had nice houses, small businesses, and barber shops. These entrepreneurs tended to convey the importance of education to their children. Unfortunately, this entrepreneurial legacy was abandoned by black leaders in the 1940s and 1950s. As a consequence, there was a rapid decline in the entrepreneurial activity within the black community. Our history of success was lost, and we took on the role of victims to racism who were trapped in poverty. Personal incentive to escape the situation was dead.

If economic conditions and race were the sole predictors of outcomes in the black community, then why was it possible during the Great Depression that 82 percent of black families had both fathers and mothers raising their children? Current economic conditions are nothing in comparison with those of the Depression, during which time there was negative growth in gross national product with an overall unemployment rate of 25 percent for all Americans. This meant an unemployment rate of about 40 percent for blacks. This was also a time in which blacks had neither political representation nor judicial representation. Worst of all, they were being lynched every day. Despite these odds, they achieved and maintained strong family units. In 1863, when 1,000 blacks were fired from the docks of Baltimore, people did not march on Washington, D.C., demanding jobs, peace, and freedom. Instead, they established the Chesapeake Man Drydock and Railroad Company, which operated successfully for 18 years.

Revisionist history has been communicated to our young people. When I spoke to 200 black MBAs from the finest graduate schools in this country, I learned that not a single one knew anything of the rich entrepreneurial past of black Americans. Consequently, there has been an ascendance of a leadership class within the black community that is grievance-oriented. There are many middle-income blacks who have a proprietary interest in the grievances of the black community. The poverty industry has joined forces with the race-grievance industry, and together they suppress reform that could have the power to uplift those low-income people in the black communities.

[RipSawyer]

“But the goverment doesn’t want to address economic & tax policies that have created the requirments for a 2-income household.”

True and at the same time we have the claims made that somehow we are a much wealthier nation than in the days when a working class man could earn enough income for his wife to stay home and raise the children without having to have a job outside the home. We should be far wealthier but most of the wealth is squandered by government.

[outpostinmass2]

Actually, Senator Liz Warren wrote a book about the 2 parent income trap. Her solutions are typical liberal ideas like “free” daycare and paid family leave but she did identify the problem.

To be honest the 2 parent income trap is all about choices. It starts with people purchasing a home needing 2 incomes and then sending kids to private schools, buying their kids cars, paying for cellphones etc. etc.

These are all choices my parents didn’t have to make or in the case of cars and private schools the choice was no.

Every time I see a news article comparing wages of today to wages of the 60’s and 70’s I always throw-up my hands. We and just about everyone else did not live a life anywhere close to even the poorest of kids today. Just look at the average kitchens today. I didn’t know any 2 car families and I knew many who didn’t have a car at all. Granted things changed in the 80’s with the election of a new president....

[BilLies]

If Bernie and Vermont is so great, why are so few African-Americans living there ......... maybe the welfare benefits are not generous enough...... or could the State just be racist? Just asking.

[Blue Collar Christian]

It’s all about income equality. The progressives want everyone to be paid equally regardless of their ambitions. That way everything is fair, there will be no more greed, everyone will turn their swords into plowshares as plentifulness abounds and only the government will have swords.

Perfect.

[Blue Collar Christian]

It’s all about income equality. The progressives want everyone to be paid equally regardless of their ambitions. That way everything is fair, there will be no more greed, everyone will beat their swords into plowshares as plentifulness abounds and only the government will have swords.

Perfect.

[RipSawyer]

What you say may be true but there are points you do not address. Very many of those you speak of who live as if they are well to do have a negative net worth. There were some two car families even in the fifties but generally those who had two cars had no debt on either of them of if they had any it was only on the newer one. Many today have two cars and could not sell either one for what is owed on it. If you look past surface appearances things are not really as you perceive them.

People who do NOT send their children to private schools now would be better off not to send them to school, it has been reported some time ago that the recent college degree is of LESS value in the job market than a public high school diploma was worth in the sixties and the situation grows worse every year. I keep repeating my own story to people, I was raised on a dirt farm of forty acres and literally walked behind the plow until joining the Navy upon high school graduation. I studied electronics in the Navy and was released from active duty two days before my 21st birthday. I then had three years of inactive reserve before receiving my honorable discharge. By age 23 I was working in the manufacturing engineering department of a plant in a tiny town in South Carolina, driving a new Mustang which I bought myself, no one gave it to me and my weekly paycheck was sufficient to have supported a wife and child had I had them but I was called a failure to my face because I was still single at age 23. You really need to think about that and think about how things really are today. I promise you that the peak earning years for people in most categories of private employment when properly adjusted for inflation came in the early seventies before Carter and it has been down hill since. Things did improve under Reagan but it is all about appearance now, as if someone who lived in a modest house with one car but owned a farm free and clear and had money in the bank fifty or sixty years ago was somehow poorer than someone who has a bigger house and two cars but a negative net worth today.

I will close with this, I DON’T support minimum wage laws but the minimum wage in 1963 was $1.25 per hour and that not only bought more than the current federal minimum of $7.25 but it bought more than the $15.00 minimum that people are calling for would buy. The meme that working Americans are much better off now than they were when John Kennedy took office is smoke and mirrors. Show me all the young high school graduates who are married homeowners with children before they reach 25 today AND DID IT WITHOUT GOVERNMENT ASSISTANCE. There were plenty back in the sixties, I was the oddball because I didn’t marry until I reached 28. Don’t just tell me that today’s young people don’t want to do that, they couldn’t if their lives depended on it in most cases. Many enter their forties still burdened with student loans and working at a job that would have been done in the past by someone with at most a high school diploma. So what if they have a big screen TV and other such gadgets, if they owe more than it all is worth?