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  #1  
Old 10-31-2007, 08:46 AM
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Poverty in America

Are the Poor Getting Poorer?
By Walter E. Williams
Wednesday, October 31, 2007

People who want more government income redistribution programs often sell their agenda with the lament, "The poor are getting poorer and the rich are getting richer," but how about some evidence and you decide? I think the rich are getting richer, and so are the poor.

According to the most recent census, about 35 million Americans live in poverty. Heritage Foundation scholar Robert Rector, using several government reports, gives us some insights about these people in his paper: "Understanding Poverty and Economic Inequality in the United States".

In 1971, only about 32 percent of all Americans enjoyed air conditioning in their homes. By 2001, 76 percent of poor people had air conditioning. In 1971, only 43 percent of Americans owned a color television; in 2001, 97 percent of poor people owned at least one. In 1971, 1 percent of American homes had a microwave oven; in 2001, 73 percent of poor people had one. Forty-six percent of poor households own their homes. Only about 6 percent of poor households are overcrowded. The average poor American has more living space than the average non-poor individual living in Paris, London, Vienna, Athens and other European cities.

Nearly three-quarters of poor households own a car; 30 percent own two or more cars. Seventy-eight percent of the poor have a VCR or DVD player; 62 percent have cable or satellite TV reception; and one-third have an automatic dishwasher.

For the most part, long-term poverty today is self-inflicted. To see this, let's examine some numbers from the Census Bureau's 2004 Current Population Survey. There's one segment of the black population that suffers only a 9.9 percent poverty rate, and only 13.7 percent of their under-5-year-olds are poor. There's another segment of the black population that suffers a 39.5 percent poverty rate, and 58.1 percent of its under-5-year-olds are poor.

Among whites, one population segment suffers a 6 percent poverty rate, and only 9.9 percent of its under-5-year-olds are poor. Another segment of the white population suffers a 26.4 percent poverty rate, and 52 percent of its under-5-year-olds are poor.

What do you think distinguishes the high and low poverty populations? The only statistical distinction between both the black and white populations is marriage. There is far less poverty in married-couple families, where presumably at least one of the spouses is employed. Fully 85 percent of black children living in poverty reside in a female-headed household.

Poverty is not static for people willing to work. A University of Michigan study shows that only 5 percent of those in the bottom fifth of the income distribution in 1975 remained there in 1991. What happened to them? They moved up to the top three-fifths of the income distribution -- middle class or higher. Moreover, three out of 10 of the lowest income earners in 1975 moved all the way into the top fifth of income earners by 1991. Those who were poor in 1975 had an inflation-adjusted average income gain of $27,745 by 1991. Those workers who were in the top fifth of income earners in 1975 were better off in 1991 by an average of only $4,354. The bottom line is, the richer are getting richer and the poor are getting richer.

Poverty in the United States, in an absolute sense, has virtually disappeared. Today, there's nothing remotely resembling poverty of yesteryear. However, if poverty is defined in the relative sense, the lowest fifth of income-earners, "poverty" will always be with us. No matter how poverty is defined, if I were an unborn spirit, condemned to a life of poverty, but God allowed me to choose which nation I wanted to be poor in, I'd choose the United States. Our poor must be the envy of the world's poor.

Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of More Liberty Means Less Government: Our Founders Knew This Well.

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Old 10-31-2007, 08:52 AM
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Yeah, taken in terms of quality of life rather than just dollars and cents, the story does not sound the same, does it?
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  #3  
Old 10-31-2007, 09:56 AM
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Quote:
Originally Posted by Botnst View Post

GM Econ professor:
"Poverty in the United States, in an absolute sense, has virtually disappeared. Today, there's nothing remotely resembling poverty of yesteryear."
Can't use stats as an accurate indicator when the subjects are rarely on the rolls. Was that guy Rush Limbaugh's economics professor? Sounds like he needs to get off the GM campus more--his statement is true of his immediate area, but laughable to me. I should email him offering a tour of working poor areas (big farm country--not noveau riche oil field trash) and see if he will write a retraction.
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Old 10-31-2007, 10:10 AM
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Many of the poor people around here drive nicer cars than me with pricey chrome wheels.
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Old 10-31-2007, 10:15 AM
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Having air conditioning or a color tv is not an indication of wealth. And common sense tells you married people would be less poor since most often two incomes pay for the air conditioning and tv.

What about disposable income? Percentage of income spent of necessities of life?
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Old 10-31-2007, 10:16 AM
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Originally Posted by Hatterasguy View Post
Many of the poor people around here drive nicer cars than me with pricey chrome wheels.
I have a home in an area where yardmen and septic tank pumpers have 31' tournament rigged Fountains. I also have a home in an area where you can drive twenty minutes and find hard working men who have worked on the same farm for 40 years who have never heard of welfare (and wouldn't accept it if they had) and share electricity with their neighbors through an extension cord.
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Old 10-31-2007, 10:19 AM
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True different areas of the country, are well different.
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Old 10-31-2007, 10:26 AM
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Originally Posted by tankdriver View Post
Having air conditioning or a color tv is not an indication of wealth. And common sense tells you married people would be less poor since most often two incomes pay for the air conditioning and tv.

What about disposable income? Percentage of income spent of necessities of life?
Exactly. It is misleading to use these items (colour TV, air conditioning, microwave oven, VCR/DVD player) as yardsticks for wealth measurement because the costs of those technologies have dropped dramatically over the time frame of the study. How many poor households today own 60" Plasma HDTV sets? Or satellite radio? Or other cutting edge technology? I'm sure 30 years from now these technologies will have worked themselves fully into the mainstream (if they're even around at all) and will be downright cheap to own. So poor people have cars, some of them even have two of them? Are they new cars? Are they 20 year old cars that are on life support? The statistics being used by this guy are deliberately misleading and are designed to be presented to people who will exclaim "hey, they got a/c and a car, what more do they need?" and never bother to look deeper.

The greatest indicator of poverty is the percentage of income spent on the necessities of life (food, clothing, shelter, medical care, transportation, etc).
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Old 10-31-2007, 10:34 AM
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I think the point he's trying to make is if they are so poor what are they doing with A/C and dvd's. 2 cars hardly looks poor to me. If money was real tight wouldnt you ride the bus.
In many cases I think poverty is self inflicted through misplaced priorities. It's amazing to me how many poor people have worn out sports cars with nice chrome wheels.
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Old 10-31-2007, 10:38 AM
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Originally Posted by Hatterasguy View Post
Many of the poor people around here drive nicer cars than me with pricey chrome wheels.
One of my warehouse employees, who makes a tad over 1.5x's minimum wage, had no problem dropping $2500 on a 46" big screen and likes to make fun of me because I only had enough for a 32" flat screen in my budget. Another bought a Pathfinder new, probably making 6 years of payments.

When I was working 2 jobs so that my wife could stay home with our kids, they complained about not getting paid enough and/or not having the time for another job. To be kind, most of these guys are "lifers". They really have no other prospects. None of them have their h.s. diplomas but then again none of them need it for what their doing. They all have kids in school and like to brag about how tough their kids are, learning and excelling academically doesn't even enter their minds and, in fact, is often discouraged. It's more important to them for their kids to be the tough ones. Certainly don't want a kid to be labelled a geek. Perish the thought!

Sadly, there will always be those who truly are poor and destitute and just can't get out of the hole. There are others who are perfectly content with the way their lives are going and have fallen into the trap of the self-fulfilling prophecy with their children as well. And it's often several generations deep.
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Old 10-31-2007, 10:45 AM
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Oh yeah I love that, a saw a new E350 the other day sitting in front of a POS house. That is a great use of money, when the bank takes it make sure to complain real loud.
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Old 10-31-2007, 10:50 AM
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Quote:
Originally Posted by SwampYankee View Post
One of my warehouse employees, who makes a tad over 1.5x's minimum wage, had no problem dropping $2500 on a 46" big screen and likes to make fun of me because I only had enough for a 32" flat screen in my budget. Another bought a Pathfinder new, probably making 6 years of payments.
Hmm............20" Sony TV.........20 years old..........23 year old old diesel auto..........12 year old refrigerator bought used two years ago.

That worker would have a field day with me................

..........got to get out of this poverty situation someday...........
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Old 10-31-2007, 11:06 AM
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Originally Posted by OMEGAMAN View Post
I think the point he's trying to make is if they are so poor what are they doing with A/C and dvd's. 2 cars hardly looks poor to me. If money was real tight wouldnt you ride the bus.
In many cases I think poverty is self inflicted through misplaced priorities. It's amazing to me how many poor people have worn out sports cars with nice chrome wheels.
Damm right. My girlfriend teachers 8th grade science in one of these schools. Mostly illegal's and almost completely too poor to afford pencils, books etc. But not 60 inch plasma TV's, tricked out Chevvy Suburbans with 22 inch chrome monstrosites and nauseatingly loud stereo's. Not to mention the clothing these folks wear. But one thing they won't concern themselves with is any kind of intellectual accomplishment. Forget about excelling academically and getting out of their so called poverty. Just as long as they are "cool in the hood".

Poverty my ass!

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Old 10-31-2007, 12:44 PM
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I agree that the stats have little to do with quality of life.

However the poor are plagued with the same issues that the rest of us face each day...the bombardment of the marketing culture that says that "you must have these things in order to be happy/beautiful/successful/popular/admired..."

The real issue is lack of money management. That is why the poor will ALWAYS remain poor. Many now wealthy individuals arrived in this country with a few dollars and the coat on their back and built wealth rather than acquire depreciating assets.

It's disenchanting to find that my wife budgets wisely and resists frequent visits to the salon to save on expenses, yet some young lady in line in front of us is sporting a $400 Coach purse, a $250 hairdo, and is paying for her groceries with food stamps with two grimy kids in tow...it's all about priorities.

Note, for those used to seeing African-Americans residing in a squalid residence, replete with an '08 Escalade sporting $5000 dubs parked on the driveway, there is an unfortunate bit of history behind that.

During the segregation era, many banks refused issuing home loans to African-Americans, some due to racism, others due to just plain high risk. Those that could get a home loan found themselves locked out of mostly-white neighborhoods that had better housing.

Dealerships (as they do today) had no issue financing anyone and everyone. So the typical African-American could make up for the inability to purchase a decent home by obtaining an alternative status symbol...the Cadillac. The rest of society could see right through that, but for the immediate social circles, this was acceptable.

Even as things changed, the mindset hasn't. This has trickled down to a couple of generations, to today. The uninformed (read, poor), will continue on the same old road.
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Old 10-31-2007, 01:26 PM
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My dad used to say to me "Just because they HAVE that (whatever thing it happened to be), doesn't mean they OWN it."

Dad was a pretty smart cookie. I learned a lot from him. It just took me a long time to realize it.

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