Apr 19, 2006

Here is some great commentary from Asymmetrical Information on a New Yorker article that looks at how poverty levels are determined in the US.

The article itself has some good points and has a lot of helpful information. Unfortunately, it draws a conclusion that is naive at best, and disastrous at worst. It’s main thrust is pushing an idea of a relative poverty line, rather than an absolute level, as is currently used.

While this may have some benefits - read the article to see what I mean - I think the overall side effect is very dangerous. It supports an idea of entitlement. The average “poor” family today has many things that families years ago would have considered luxury items - like televisions, VCRs, and a Nintendo, etc - yet a relative poverty line would say that they are even poorer because their neighbor’s have DVD players, flat screen TV’s and a shiny new XBOX 360.

How can someone be poor, simply because they don’t have what another person has? That is a ridiculous idea - if it were true, then I too am poor, because I don’t have what Bill Gates has. Am I poor compared to him? Sure, but who cares (besides me…)? I have no right to have what he has, just as no one has a right to what I have. But, in today’s society, we’ve deemed that someone does have a right to eat. There is a very big difference.

While this idea would certainly be embraced by lower income people, I can tell you that the idea was never invented by a lower income person. If you’ve ever gone through a time of wondering if you are going to get to eat today or not, you know that you aren’t so concerned with the quality of your TV. Only a mind linked to a fully tummy has time for such considerations.

The article also quotes certain people as saying that our current poverty levels don’t make sense in more expensive urban areas, such as Boston, New York and San Francisco. They advocate raising the poverty line in these areas because it is so much more expensive to live there, and therefore requires that a person earn more to get to the same standard of living. Again, I think that this shows more of an entitlement attitude. I agree that these areas are more expensive to live in, and that a person who lives there has a much harder time of making ends meet - but I cry bunk at the idea that this is a problem. No one has a right to live in a specific area and I certainly don’t think government entitlement programs to allow them to do so would make very much sense at all.

Yes, I do understand the need for an income spectrum in the labor force - there are both high and low earning jobs to be done in an urban setting, and pushing out lower income workers can hurt the overall economy by leaving jobs undone. Yet there is also the argument to be made that in a more wealthy area, those jobs that truly need doing will then pay more to attract the appropriate labor. The market will adjust itself, as it always does - yet government redistribution programs are expensive to administer, always politicized and completely non-voluntary. So, exactly why is that preferable to relying on market forces?

While the current poverty level designation is showing many signs of wear, I don’t think the idea of a specific subsistence level should be thrown out in favor of a relative index.

poverty, poverty levels, New Yorker