How Poor Are America's Poor?

According to the US Census Bureau, 36 million Americans are "living in poverty." Can this alarming claim really be true? The simple answer is: No.

To most Americans, "poverty" means destitution: an inability to provide a family with nutritious food, appropriate clothing, and reasonable shelter. In reality, only a small fraction of persons classified as "poor" by the Census Bureau meet this description. The bulk of the "poor" live in material conditions which would have been judged comfortable or well-off just a few generations ago. Most "poor" Americans today are better housed, better fed, and own more personal property than average Americans throughout much of this century. Various government reports provide an interesting portrait of those the Census Bureau calls "poor."

In 1995, 41 percent of all "poor" households owned their own homes. The average home owned by persons classified as "poor" is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio. Over three-quarters of a million "poor" persons own homes worth over $150,000; nearly 200,000 "poor" persons own homes worth over $300,000.

Only 7.5 percent of "poor" households are overcrowded. Nearly 60 percent have two or more rooms per person. The average "poor" American has a third more living space than the average Japanese and four times as much living space as the average Russian. Note: These comparisons are to the average Russians and Japanese, not to those the government classifies as poor.

Seventy percent of "poor" households own a car; 27 percent own two or more cars. Two-thirds of "poor" households have air conditioning. By contrast, 30 years ago only 36 percent of the entire US population enjoyed air conditioning.

Ninety-seven percent of "poor" households have a color television. Nearly half own two or more color televisions. Nearly three-quarters have a VCR; almost one in five has two VCRs. Sixty-four percent own microwave ovens; half have a stereo system; and over a quarter have an automatic dishwasher.

Despite frequent charges of widespread hunger in the US, 84 percent of the poor say their families have "enough" food to eat; 13 percent state they "sometimes" do not have enough to eat; while 3 percent report they "often" do not have enough to eat.

As a group the "poor" are far from being chronically hungry and malnourished. In fact, poor persons are more likely to be overweight than are middle-income persons. Nearly half of poor adult women are overweight.

The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-income children, and in most cases is well above recommended norms for all children. Most poor children today are in fact super-nourished. On average, poor boys grow up to be one inch taller and ten pounds heavier than the GIs who stormed the beaches of Normandy in World War II.

Why the Misleading Picture?

Why is the Census Bureau's poverty report so inaccurate? The main problem is that the Bureau dramatically undercounts the incomes of Americans. This undercount is evident if Census Bureau figures are compared to Commerce Department data, which measure the Gross Domestic Product.

In 1997, Commerce Department figures showed the aggregate "personal income" of Americans (including personal payments of Social Security taxes) was $7 trillion. By contrast, aggregate personal income, according to the Census Bureau's official income definition, was only $5 trillion.

The Census Bureau missed $2 trillion in annual income--roughly $20,000 for each US household. The unreported $2 trillion exceeds the entire economies of all but a handful of nations in the world.

Adjusted for inflation, the missing funds are larger than the entire US Gross Domestic Product in 1950. True, much of this missing income belongs to the middle-income and wealthy, but a large slice of it belongs to low-income families as well. For example, the Census Bureau's official income figures fail to report more than one-half trillion dollars in government assistance to low- income and elderly households.

Sadly, the Census Bureau report not only exaggerates material poverty in our nation, but, even worse, it distracts attention from the critical behavioral problems afflicting low-income communities: illegitimacy, crime, school failure, and drug abuse. As such, it does a disservice to our society and the poor.

Robert Rector is a policy analyst and Sarah Yousseff is a research assistant, at The Heritage Foundation.

For more information ...

How Poor Are the Poor? Statistics from the Bureau of Labor Statistics reveal that many lower-income persons live better than their income alone suggests. (National Center for Policy Analysis, Brief Analysis, October 1995, 3 pp.)

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