Pause to Define Terms, Examine Consistency

It may seem irrelevant how we define "poor", but it is not.  There have been many programs constructed to provide something for the poor, and we should evaluate the overall state of how poor is poor, and the consistency of the definitions before diving into other aspects of the income distribution area.   We all feel for those who are stuck in a condition that is compelling, but what about those who chose to be poor?  Do we try to help them by handouts or a more just and fair approach?

Related to this discussion is the basic question is the answer to helping the deserving-of-help poor best handled locally or at a national level?  What is the means to solve a problem and is the government the best solution path?

It is also meaningful while we address the question of poverty to answer what "fairness".   This term is one that is stated and used extensively in constructing elaborate redistribution schemes in order to achieve a higher level of fairness.  Are we to take a path that is emotionally driven, and that the unintended unfairness is to be ignored?


Let's examine "poor" and "fairness"

Income Distribution Page

Chapter 1:  Data Sources and Validity

Chapter 2:  Income Distribution

Chapter 3:   Define Terms like Poor

Chapter 4:   Income mobility

Chapter 5:   Critical forces acting on us

Chapter 6:  The Occupy Movement

Chapter 7:  Buffet Rule fair?

Chapter 8:   Conclusions



What do we consider is Poor?

homeless probabilityWe can judge this based on well being and possessions.    Clearly attempts to poll the public in the community leads to the conclusion that their definition of poverty is far from that used by the government in redistribution efforts.  Some might argue that redistribution is not aimed at assisting only the acknowledged poor, but somehow is intended to bolster all self-defined "disadvantaged."   A thesis that most Americans would not support: to take from them to give to those who do not deserve it.    

Poor:  indigent, needy, impecunious, penniless, impoverished, poverty-stricken, destitute

To consider what portion of the population is actually poor.  The homeless is much less than 1 out of every 70 (Myth of Starvation), which is less than 2%.  The number using the data at right is more like 1 in 500, or less than 0.2% 

What would we see if the incentives are removed to be poor?  One such data point occurred in a State where the wage to qualify for Medicaid was raised and the actual earned wage rose to this new maximum.   Incentives for subsidies to be poor is a barrier for some. 


What does the Poor possess?

Poor with kids Poor The possessions of poor households are shown in the nearby tables. It is clear that consumption and possessions are quite common amongst this section of the population, and that this is quite different than the definition of what the public thinks is poor.


From consumption wealth

In 1964, Sears advertised a TV console for $750, writes Mark Perry on Carpe Diem. For an equivalent amount, about $5,500, a consumer today could buy “8 brand-new appliances (refrigerator, freezer, dishwasher, range, washer, dryer, microwave and blender) and buy 9 state-of-the-art electronic items (laptop, GPS, camera, home theater, plasma HDTV, iPod Touch, Blu-ray player, 300-CD changer and a TiVo recorder).” In short, things are a lot cheaper.


From deserving poor: 

Let's start with healthy adults in the First World.  Even the least-skilled full-time jobs pay more than enough for adults to comfortably support themselves.  In the U.S., the average income for janitors is about $25,000/year; the average for maids is about $21,000.  A household with one janitor and one maid averages $46,000, enough to put them at the 96th percentile of the world income distribution - and well above the U.S. poverty line.  Even Americans below the poverty line typically possess a long list of luxuries that the Kings of France would have envied: 80% have air conditioning, nearly three-quarters own a car, two-thirds have cable or satellite t.v., one-third have a plasma or LCD t.v.  My point isn't that all healthy adults in the First World do enjoy such living standards, but that there are reasonable steps they can take - or could have taken - to do so.myth of starvation

Consumption is higher in those labeled "Poor" than most people realize.   The myth of starvation is common.  Most Americans have been schooled that there are starving children and that it is a widespread issue.   The data does not support this theory, as is most evident from reviewing the chart at right. 


As scholar James Q. Wilson has stated, “The poorest Americans today live a better life than all but the richest persons a hundred years ago.”  (Myth of Starvation)


As a rule of thumb, poor households tend to obtain modern conveniences about a dozen years after the middle class.  (Myth of Starvation)


Although the overwhelming majority of the poor are well housed, at any single point in time during the recession in 2009, around one in 70 poor persons was homeless.  (Myth of Starvation)


According to the Census Bureau:  2009  (Myth of Starvation)

  • Almost 50 million classified as poor
  • 96% of parents classified as poor said their children were never hungry
  • 82% of the poor say they are never hungry due to a lack of food or money


One can surmise from the above and the data on consumption equality that the actual percent poor is perhaps from 1 to 4% or 3 to 12 million, not the 50 million above or the 45 million on food stamps.   Is being poor then a matter of choice or a status that is incentivized or encouraged?   Is the large transfer payments conducted by the government aimed at helping the poor or equalizing income even into the middle class?


Fairness should be fair in its application

At no other time has there been a bigger need for each citizen to define what a word means.   “Fairness” permeates so many political discussions in so many ways, but alas it is also the definition that is never agreed to.   It is our custom in this country to push something in a direction that seems good until it might go bad.   The ethical boundary here seems to have been crossed.  Are we to be a society of Takers and not a Society of Makers?

Perhaps "fairness" is meant by some to be an emotional parameter, a building up of all that feels unfair into directed political motion.   It is however a word that now needs to be defined, for the simple reason it has stayed in the emotional space too long.   The damage is mounting.   At no other time has the political forces used this emotion to create such a large “fairness” machine of government.    

In any event, many policies are being proposed the wake of fairness and at the same time are promoting unequal treatment. 

Some would argue that unequal treatment is necessary to make up for past injustices.   This arithmetic of 2 wrongs make a right is at least unpredictable as to the consequences.  If treating the poor as being unjustly treated in masse is a good policy then why is the welfare or transfer payment process so slanted towards the middle class?