More Misleading Numbers on Poverty

This past week, media outlets have been abuzz, heralding the news that poverty levels in the United States are higher than previously thought. But the numbers are misleading.

The Census Bureau reported last week that, according to its new “supplemental poverty measure,” 49.7 million Americans are in poverty. This figure is higher than 46.2 million reported by the Census back in September using the traditional poverty measure.

This “supplemental poverty measure”—which has been promoted by the Obama Administration—is essentially a relative measure of poverty. As The Heritage Foundation’s Robert Rector and I explain in this 2011 National Review Online piece, the measure is inherently flawed:

The new measure…distorts the picture of poverty by placing income thresholds on an automatic elevator that climbs as overall income rises.

Thus, by this measure, even if the income of all Americans doubled immediately, poverty would not decrease, because the income thresholds would also double. Only if the incomes of the poor rise more quickly than those of the rest of the population would poverty decrease.… It will ensure that “poverty” can’t be alleviated except by extreme income leveling. The new measure is designed to provide a never-ending argument for the Left to insist that we must continue to “spread the wealth.”

What about the traditional poverty measure, which showed that 46.2 million Americans are poor? Also misleading.

The Census Bureau counts only a small amount—roughly 3 percent—of welfare spending as income when calculating poverty. (This is a crucial reason why poverty in the U.S. looks very different from the vision most people have of it.)

A more accurate measure of poverty is “self-sufficiency”: the ability to sustain an income without reliance on welfare. Today, the U.S. has record-high numbers of Americans who lack self-sufficiency, as indicated by record-high levels of government welfare spending. Annually, the government spends roughly $930 billion on welfare, or nearly five times the amount necessary to pull every poor person out of poverty. This cost is on course to rise under Obama’s budget proposal.

The U.S. needs a new approach to combating poverty—an approach that empowers the poor by promoting self-reliance over dependence. Additionally, the complex problems that underlie poverty are often best addressed by the institutions of civil society: private organizations, churches, faith-based institutions, and so forth. Many local grassroots leaders around the nation work with individuals to help them overcome addictions, repair broken family relationships, help youth avoid delinquency and truancy, and assist children in the foster care system. Their work is touching lives and restoring families and communities.

Many Americans are in need and require assistance to overcome the barriers that inhibit prosperity, but a government safety net should not become a trap of dependence. Policies that promote work and respect the vital work of civil society will lead to better tomorrows for those in need today.