This New York Times op-ed takes a new look at American poverty and concludes that the gap between the rich and the poor in this country is shrinking, not widening – at least in terms of consumption.
To understand why consumption is a better guideline of economic prosperity than income, it helps to consider how our lives have changed. Nearly all American families now have refrigerators, stoves, color TVs, telephones and radios. Air-conditioners, cars, VCRs or DVD players, microwave ovens, washing machines, clothes dryers and cellphones have reached more than 80 percent of households.
As the second chart, on the spread of consumption, shows, this wasn’t always so. The conveniences we take for granted today usually began as niche products only a few wealthy families could afford. In time, ownership spread through the levels of income distribution as rising wages and falling prices made them affordable in the currency that matters most — the amount of time one had to put in at work to gain the necessary purchasing power.
At the average wage, a VCR fell from 365 hours in 1972 to a mere two hours today. A cellphone dropped from 456 hours in 1984 to four hours. A personal computer, jazzed up with thousands of times the computing power of the 1984 I.B.M., declined from 435 hours to 25 hours. Even cars are taking a smaller toll on our bank accounts: in the past decade, the work-time price of a mid-size Ford sedan declined by 6 percent.
When you look at lifestyle, most people classified as poor are not at all what we think of as poor. As I wrote in You Can’t Have Your Poverty and Your Big Screen TV, Too,
Only about a third of poor households – around 12.5 million in a country of over 105 million households – experience conditions most of us would classify as “poverty” including intermittent food shortages, difficulty paying bills, and less access to medical care.
And here’s what “poverty” looks like for most people:
Is there actual poverty in this country? Absolutely, yes. But – as evidenced by how we actually live – it is not the widespread crisis politicians would have us believe it is. And the cure for it will be much easier to find if we accurately diagnose the problem.
Cato-at-liberty notes that
The two-Americas theme is endlessly regurgitated, particularly the notion that the rich are getting richer and poor are getting poorer (with the obvious implication that the rich are somehow causing greater poverty). These assertions have been repeatedly discredited (most recently by a Treasury Department study), but practitioners of the politics-of-envy seem impervious to factual arguments.
Unfortunately every single Presidential candidate still in the race – and many of those who have now dropped out – have been demagoguing business and “the rich” for votes. It’s almost as though these people have no real comprehension of how the food actually gets to their refrigerator or what motivates people to provide the services they enjoy. It’s almost as though they’re unaware that Exxon-Mobil alone literally paid as much in taxes last year as half the country. That’s just one company. It really makes me wonder how much the government is raking in from Chevron, Walmart, Microsoft, and other large companies. Certainly individual taxpayers are not paying the bulk of the bills our government is incurring.
I’m torn between hoping that these politicians are really just that ignorant – because the alternative is that they do know better, but are purposefully dividing the country in a naked grab for power – and fear and disgust that they’ve risen to such heights in spite of this ignorance. But deep down, I know exactly what they’re doing. I know it’s deliberate. And so do you. People just feel better getting whipped up into a two minute hate against those who (we’d like to believe) are blocking us from getting what we want. It’s certainly easier than taking personal responsibility for attaining our own needs and wants. It’s easier than making sacrifices and practicing delayed gratification. It’s easier than working more; a solution which would actually get most of the people out of even our relaxed classification of poverty because they are only working part time. The typical poor family with children is “supported” by an adult working only 16 hours per week. Three quarters of children living in poverty – most of whom have Playstations and cable TV along with their free school lunch – would not be classified as poor if one adult in their household worked forty hours a week.
The welfare reforms signed by Clinton – amidst the hysterical shrieks of the grievance class and their victicrat leaders – were incredibly effective because they forced people to work and gave them a subsidy via the earned income tax credit while their incomes were still quite low. And while no one makes much money at an entry level job, the key is that people don’t stay at entry level. Wages increase the more you work. Stick with it long enough and you’re supporting yourself – you don’t need the subsidy. The American dream is certainly attainable by nearly everybody – Adam Shepard is a great example.
Still, as the Cato post says, people who espouse the view that we need to “get” the rich in order to make things “fair” for the poor are impervious to factual arguments. Perhaps the worst part is how many Christians have boarded the nanny state/populist class envy train, in spite of a bible that is chock full of verses promoting commerce and condemning envy, greed and the love of money (not the actual money!), and the simple reality that larger government and an increased welfare state is the opposite of Christian charity. It’s harmful and it glorifies government, not God.
The wealth redistribution – no, make that theft from one group and bribery to another; it’s wordy but far more accurate – is happening on a far larger scale than most people realize. And yet, for our current crop of Presidential candidates and a good portion of our Congressional leadership, it’s still not enough. That’s frightening.
Hat tip to to The Happy Hospitalist who comments, “Why I should pay for someone’s health insurance so they can afford their iPod is beyond me.” I’m wondering the same thing.
