THE PERSISTENCE OF POVERTY: THE NEW GRADGRINDS
Harrington, Michael
Now what I want is, Facts. Teach the boys and girls nothing but Facts. Facts alone are wanted in life. Plant nothing else, and root out everything else. . . . Thomas Gradgrind, sir. A man of...
...Their reliance on Social Security (which was largely inflation- and recession-proof) and interest income will have caused their average after-tax incomes to remain roughly constant...
...The growth of jobs and income in the private economy, combined with an explosive increase in government spending for welfare and income transfer programs, has virtually eliminated poverty in the United States...
...To be sure, they might have taken a tour of the South Bronx in New York, as almost every presidential candidate did—and the acres of rubble and the milling unemployed might have suggested that all was not well...
...These estimates were completed in the spring of 1983 when forecasts of 1984 real Gross National Product stood at $1,580 billion...
...From 1979 to 1984, average earnings per family will have declined by 4 percent but average welfare and Food Stamp benefits per family will have declined by 14 percent...
...In this sense, the period 174 this fact into account, I believe that Peter Townsend's definition of the poor in his book Poverty in the United Kingdom is the most subtle and realistic analysis available...
...There will always be inequality, the senator said...
...Then, in 1982, the Bureau of the Census published a formidable technical paper on "Alternative Methods for Valuing Selected InKind Transfer Benefits and Measuring Their Effect on Poverty...
...And then, in 1977, the Congressional Budget Office (CBO), under the direction of a certified liberal, Alice Rivlin, took up the Public Interest thesis...
...It is also, if I may take off my stifling statistical mask and speak in a human voice, an unambiguous outrage...
...An interesting example: tea is without nutritional value yet, in some countries, it is clearly a "necessity of life...
...Yet that cannot be done...
...First, a few basic concepts...
...In 1974 Mollie Orshansky argued that the "line" was $3,000 below what it should be and that the poor therefore numbered 55.4 million, not, as in the official count, 23.4 million...
...Gradgrind sees numbers instead of people...
...In 1979 terms, "market value" eliminates almost 13 million people, or 42.3 percent of the total...
...in Minneapolis-St...
...Late in 1983 Senator Edward Kennedy had gone to San Francisco, Minneapolis, Detroit, Pittsburgh, and Eastern Kentucky, talking to people on soup-kitchen lines and finding that many were the new poor: members of intact families, not drifters or welfare mothers...
...In the 1880s, reformers thought it all right for several families to share one water tap and a privy on a landing, or for a family with several children to live in one room...
...Remember that the highest computation of the overcount —13 million—is not even equal to half of the possible undercount (30 million or more...
...This leaves Medicaid, a means-tested program for the poor alone...
...So, strange as it may seem, they implicitly acknowledge the authority of the very definition they want to replace...
...There was a flurry of newspaper reports but they had to tell of a complexity, not a stunning simplicity like the secret abolition of poverty...
...But those new estimates about how we exaggerated poverty are not accurate...
...Is all this uproar over the "poor" merely a way of saying that some people have more and some less...
...If one conceives of "deprivation" in terms of the ordinary 1979-84 was a repeat of 1973-79, the period following the first OPEC price increase...
...It declined...
...This approach yields the highest estimates of an overcount and the greatest reduction in the number of the poor...
...Most of them, however, avoided that exertion...
...Thus 1984 family incomes may actually regain their 1979 levels...
...I n January 1984 President Reagan's Task Force on Food Assistance refused to recognize the palpable evidence of growing hunger in the United States...
...And, as Townsend emphasized, one must look at the poor in terms of their participation— regarding food and everything else— in their country—their society...
...Why has so much attention been paid to documenting the overestimation of the numbers of the poor—and so little to exploring their underestimation...
...This change, along with some other technical amendments, resulted in Orshansky's conclusion that there had been a significant undercount...
...Paul by 150 to 400 percent...
...What follows is a statistical detective story, a prospect, I suspect, not immediately fascinating to every reader...
...LET US LOOK at the reductio ad absurdum of all these figures...
...But a great accomplishment of the Food Stamp program is that it establishes uniform national levels of nutritional assistance...
...in San Francisco by 200 to 400 percent...
...over the past quarter of a century...
...The next year, Martin Anderson of the Hoover Institu176 tion, later an adviser to President Reagan, published a book on the new nonpoverty...
...To qualify for that, the elderly, blind, or disabled have to forfeit their Social Security or Supplemental Social Security Income...
...In the early '70s, the Organization for Economic Cooperation and Development estimated, using the same measure, that 13 percent of Americans were below the poverty line and 3.5 percent of the Swedes...
...Meanwhile, there have been some remarkable statistical "victories" over social ills that have left the reality totally unchanged...
...Part of the complaint would be that tax rates decided in terms of cash income, and set at a certain level for precisely that reason, were now being applied to noncash income...
...There were, the Census said, serious difficulties in "cashing in" the in-kind benefits...
...This certainly made "full employment" easier to achieve, even though it left 8 million people jobless...
...Others, like Browning and Anderson, were straightforward conservatives...
...In two areas, involving millions of people, there is evidence of an undercount...
...6) One source of growing inequality was the relative decline in welfare and Food Stamp benefits...
...But if one used the "economy budget" of the USDA, that meant a poverty line of $3,165...
...And since it is impossible to eliminate the lowest fifth, the poor will always exist, albeit with rising living standards...
...But what are minimum physical needs...
...There is also a very real sense in which the official definition of the poor has over the past decades become both less generous and less exact...
...I say "much more than" because the poor, by any measure, have significantly increased since 1977...
...As a result, even if the new Gradgrinds were right in their calculations of an overcount, the number of the impoverished is higher than the official statistics, not lower...
...It is, then, at least possible that the United States is now undercounting poverty by much more than 25 million people...
...This statistical triumph depends upon precisely what measure one uses to translate in-kind goods and services into an equivalent cash sum...
...Townsend writes, with a somewhat deceptive simplicity, "Poverty . . . is the lack of resources necessary to permit participation in the activities, customs, and diets commonly approved by society...
...In the '70s, when the political and cultural wind changed, the political definition of poverty did in fact become quite sinister...
...Again, the infant mortality rate in the United States for blacks is three times that for Sweden as a whole (24.9 against 8.6 per 1,000...
...The American poor are thus more "unequal" than the Japanese poor...
...Kennedy also gathered data...
...In late 1983 David Stockman testified on behalf of the Administration that, despite the impression that there had been an enormous increase in poverty, the number of poor was actually declining, with even better days ahead...
...Closing this structural deficit will require additional income reductions of about $560 per family...
...To attribute what they get to the poverty population as a whole is simply wrong...
...In a sense, I would like very much to ignore all the statistical and definitional complexities: those serried figures are so distant from the reality of poverty...
...The poor, said people like Barry Goldwater in the '60s, are just a statistical artifact, and for that reason it is a mathematical impossibility to abolish poverty...
...She decided to use a minimal diet—just sufficient to hold body and soul together—as the base...
...there will always be people at the bottom...
...In the modern world, where prejudices disguise themselves as mathematical arguments, one has to counter misleading numbers with more honest numbers...
...But then, when one looks a little more closely, it turns out that 46 percent of all Medicaid funds go for nursing homes and other forms of institutional care...
...These and all other figures . . . are adjusted for inflation...
...Answer: the nonpoor get much more than the poor...
...that the Mississippi poor get as much as the New York poor, something that never happens when, as with AFDC, there is "states rights" welfare...
...In 1979, the medical-care benefits for a single aging person were equal to 85.9 percent of the poverty line...
...A change of a few tenths of a percent in those receiving assistance can mean a reduction in federal outlays of millions and millions of dollars...
...In the spring of 1983, the Reagan administration unwittingly lent its authority to my point...
...Thomas Gradgrind is a marvelously cruel and distorted caricature of a follower of the utilitarian social thinker Jeremy Bentham...
...In 1975, in Sweden, an infant was much more likely to survive the first year of life than in the United States (there were 8.6 deaths for every 1,000 births in Sweden, 16.1 in this country...
...Taking the extreme case—the one in which each approach yields the highest "reduction" in poverty—the differences are striking...
...Official government definitions in this area serve to determine eligibility for entitlement programs...
...With respect to causality, we find: (5) The principal brake on economic growth over the period was a cycle of oil-price inflation, recession, and recovery during which family incomes showed no net gain...
...Moreover, slightly more than half of that rise is attributable to Medicare, a program for the aging only, and 85 percent of its recipients are not poor...
...Favored by conservatives, it was also used by the Congressional Budget Office...
...Gradgrind in his observatory (and there are so many like it), had no need to cast an eye upon the teeming myriads of human beings around him, but he could settle all their destinies on a slate, and wipe out all their tears with one dirty little bit of sponge...
...She writes as if his definition were mainly based upon "the lack of hot breakfasts, of birthday parties, of holidays, and of the habit of dining out...
...had an average income of $30,000—which would mean they could take care of their necessities—but that there still was a tiny upper class of billionaires...
...First, the market-value method estimates the dollar worth of the benefit in terms of its purchase price in a private market...
...Suppose families of the lowest fifth in the U.S...
...But this choice was made at a time of increasing federal aid to those in need...
...Therefore, Orshansky reasoned, multiplying the food cost by three would yield an approximate total budget...
...Gertrude Himmelfarb's otherwise fascinating, more recent study of the idea of poverty in the 19th century trivializes Townsend's important work...
...In Kentucky food programs had increased by 75 to 400 percent...
...A computer programmed with reactionary premises was taken as more authoritative than all the evidence assembled by Kennedy or even the testimony of the conservative director of the Congressional Budget Office (CBO...
...It also utterly subverts Martin Anderson's assertion that "an explosive increase in government spending for welfare and income transfer programs" was a major reason for the so-called disappearance of poverty in America...
...The political attitudes involved in all these sweeping redefinitions were complex...
...Among the poorest one-fifth of families, average disposable income will have fallen from $7,546 to $6,833, a decline of 9.4 percent...
...So Charles Dickens began his novel Hard Times...
...A serious definition of poverty has to be as absolute as death, as relative as changing living standards...
...I am not saying that her measure is the only plausible one...
...Not so incidentally, it accounts for about two-thirds of the in-kind benefits so critical to the statistical triumph over poverty...
...It was 54 percent of median income in 1960, 40 percent in 1970, and 38 percent in 1979...
...I do not want to suggest that there was something sinister in these events...
...171 The implications of that naive trust in biased statistics are frightening...
...Families headed by a white male in his prime working years will have lost about 3 percent of their after-tax income...
...One can imagine a society with no poverty and considerable inequality...
...The third method is called the "povertybudget share value" approach...
...Decent and serious analysts can reject Orshansky's methodology without being prejudiced against the poor...
...In 1979, the market value of Medicaid coverage for an elderly person in New York State has been estimated at $4,430...
...2) Between 1979 and 1984, inequality within the income distribution will have grown significantly...
...This undertaking is not merely a matter of defending the poor against the new Gradgrinds...
...This insight is not some vague philosophical notion...
...More precisely: (1) Assuming the current economic recovery continues, the disposable income of the average family in 1984 will stand at $20,807...
...Federal food monies, the commission said, should be given to the states, which should then decide how to spend them...
...The statistical conservatives mix apples and oranges in their calculations...
...The Bureau of the Census took note of this challenge, though the news did not get through to the media...
...There are two facts in American society that are as palpable as the nudity of Hans Christian Anderson's emperor...
...Small wonder that editorialists around the country had begun to take questionable theories as statements of observed fact...
...The lowest fifth does indeed exist in Sweden, but in both absolute and relative terms it is better off than the lowest fifth in the U.S...
...We are talking about an undercount that could total more than 30 million rather miserable human beings...
...The new Gradgrinds were using statistics to blot out the tears of suffering men, women, and children...
...Indeed, one plausible measure reduced the number of the poor by a mere 12.2 percent rather than by 42.3 percent (these are 1979 numbers—they predate an increase of more than 5 million people in the officially defined poverty population...
...The bureaucracy simply did not want a figure that would put 25 or 30 percent of the people-50 or 60 million citizens—below the poverty line(s...
...Those statistics, we will see, systematically underestimate the number of the poor...
...Some of the poor have been winners (the aging, the full-time workers, at least until Reagan...
...Rather, they overgeneralize because of a single, rarely stated fact: that the aging poor receive a disproportionate share of the in-kind benefits...
...If everyone at the bottom is brought up to a minimal level of decency, those at the top can, and should, pay...
...On the one hand, they still use the cash-income definition of poverty...
...Above that point, families and individuals could reasonably participate in the common activities of their society...
...Clearly, there was a deterioration of the relative position of the poor even before Reagan became president...
...That is simply not true...
...Obviously, I do not say these things because I propose to take benefits away from the aging...
...But the fact is that those who want to revise the poverty problem downward—who make a 50 percent reduction in the number of the poor—get incomparably more attention than those who present a very reasonable case for revising the number upward...
...How many poor people are there...
...for two persons, 136.7 percent of the line...
...Estimates of the size of this undocumented population vary— from 5 million to 10 million people...
...But I do want to point out that there are very special problems in evaluating these benefits—above all in assigning a cash value to nursing-home and/or terminal health care—which makes it dubious to apply them to the poor as a group...
...But our story's basic contrast—the lack of income growth in 1973-79 and 1979-84 compared to rapid income growth in 1947-72— remains unchanged...
...Difficult, even tedious as this might seem, it must always be kept in mind that the statistics are surrogates for human misery...
...Suppose the U.S...
...Clearly, there is no doubt in the Reagan administration that we have millions of predominantly poor undocumented workers in the U.S...
...There are also social realities that point in another direction...
...The Congressional Budget Office, for instance, discovered that the normal outcome of the American economy left 25 percent of the people poor...
...In 1955 the Department of Agriculture had carried out a Survey of Food Consumption concluding that the average American family spent one-third of its after-tax income on food...
...Answer: Not the welfare poor, but the aging poor...
...The only reason, it added, this appalling percentage did not constitute a menace was that government transfer programs did away with roughly 80 percent of that poverty...
...This fact about the aging is a subordinate aspect of a larger truth: that the welfare state in the United States is primarily benefiting people over 65, most of whom are not, and for a long time have not been, poor...
...Those families who did worst were young and middle-aged female-headed families who were heavily dependent on welfare and Food Stamp benefits...
...The nogrowth experience of both periods was far worse than the experience between 1947 and 1972, when family income would typically grow by 15-18 percent in five years' time...
...But in the '70s and early '80s, with the nation on an economic roller coaster, a decreed statistical victory over poverty became a way of cutting down on real spending...
...Also, relative differences...
...One has been told for years that the contemporary American poor are much better off than medieval royalty or present-day Indian beggars...
...In fact, when one adopts this broader definition in all its implications, poverty becomes all the more obdurate...
...The reason is simple...
...In two significant areas, then—the technical question of how the poverty line is fixed, and the fact that there is a huge and uncounted population of the undocumented poor—there is evidence of an undercount...
...But whether liberal, optimistically conservative, or pessimistically conservative, all these thinkers pointed in the same direction: No more money for antipoverty efforts...
...In this instance, that is of great significance because in the years 1981-83 poverty was on the increase, first of all among working people, and second, among those aging poor whose "one-time" loss of the indexing of their Social Security benefits in 1983 will affect the base of their payments for the rest of their lives...
...That is roughly the same number I suggested more than 20 years ago in The Other America...
...This more than doubling was, however, fictitious in considerable degree, since it represents primarily an inflation of medical costs of around 75 percent, and not an increase in medical services...
...Dickens himself, one of the greatest chroniclers of poverty that ever lived, was a liberal of sorts, not a radical, and he hoped—as the ending of his haunting story of the "hungry Forties," A Christmas Carol, made clear— that good and decent people would finally wake to their responsibility...
...8) Among different types of families, those who will have done best over the 1979-84 period are the elderly...
...on the other hand, they change it radically...
...However, the Administration's decision to opt for the lower food budget in 1964 was not, I suspect, made on the basis of such complexities...
...Moreover, these taxes are being subsidized by a large structural federal deficit...
...I would suggest that there are in the range of 40 million to 50 million Americans who live in poverty...
...The second area in which the poor are undercounted is not a creation of statistical method but a fact...
...Poverty and inequality are not the same thing, even though they are clearly related...
...The latter was about 80 percent of the former and, making it the base, significantly reduced the number of the statistical poor...
...Three techniques have been devised for computing the cash value of in-kind benefits...
...has an important "underground economy" with billions of dollars in unreported income...
...The Bureau of the Census gives an excellent case in point...
...It does not include the money value of the in-kind income received by the poor—the Food Stamps, housing subsidies and, above all, medical care...
...If so, in that year there was no poverty at all in the U.S., when we compare our low-income diets to diets in Europe in 1755 or in much of India today...
...Even taking into account the fact that there is probably a certain amount of undeclared income that abolishes the poverty of the underworld poor, still the undocumented workers and the people counted if one accepts Orshansky's revised definition are potentially more numerous than all those now officially declared to be poor...
...Intricate statistical corrections rarely have the media impact of the initial—wrong—revelations...
...When one computes the worth of in-kind income and adds it to cash income, poverty is drastically reduced or even abolished...
...In 1899, Seebohm Rowntree had thought it was possible to make an absolute definition of poverty based on minimum physical needs...
...As if an astronomical observatory should be made withFrom the forthcoming book The New American Poverty by Michael Harrington...
...I can't blame others for being as subjective as I was...
...but since the population has increased in the meantime, it represents an exceedingly modest decline in the percentage of the poor...
...Some— the CBO, for instance—argued that the revisions were necessary to show that liberal programs had actually worked...
...But at the "threshold of deprivation," a quantitative decline in cash (an objective, measurable phenomenon) meant a qualitative decline in social participation (a somewhat less precise notion...
...In fact, those indicators taken from daily life were merely illustrations of the contrast between the two basic modes of social existence, that of the poor and that of everyone else, and they were cited in a study that is rigorous in statistical analysis...
...By 1983 the Council of Economic Advisers had in effect raised the old "full-employment" unemployment rate to 7 percent...
...Small wonder then that by 1983 many people had concluded that the poor were either nonexistent or undeserving...
...But long before this conservative discovery, Townsend—and the American sociologists S. M. Miller and Pamela Robey—had insisted that poverty be defined in terms of all the major aspects of life, including those famous "in-kind" goods and services...
...For when the poverty line is adjusted, or certain in-kind benefits are computed in determining eligibility for a social program, it is not just a matter of theory...
...But this is exactly what the statistical revisionists are doing to the poor...
...What needs to be emphasized here is that poverty is not an income level but a condition of life...
...So it was that this highly questionable— indeed, erroneous—theory began to appear in the media as a statement about reality...
...This point requires us to focus on the way antipoverty measures in the United States work primarily for the aging...
...Not at all...
...But American poor now live neither in the Middle Ages nor in India...
...In short, a great deal of the reduction of poverty by giving a cash value to in-kind benefits is the result of statistical smoke and mirrors...
...The stereotype directly contrary to these facts—that the United States devotes the lion's share of its social spending to the lazy, dependent poor—is one of the chief ideological defenses of our callousness...
...How one defines poverty also has profound policy implications...
...Indeed, America now lags behind ten other advanced nations in terms of its per capita wealth...
...Growth was going to generate huge federal surpluses, which would have to be spent if they were not to deflate the economy...
...Or rather, there was some significant progress in the '60s, stagnation in the '70s, decline in the early '80s...
...Death is a rather absolute fact...
...It came down to a choice between two...
...3) Between 1980 and 1984, average per-person expenditures of federal, state, and local governments will have risen by 11 percent in real terms...
...An early statement of this theme came from Edgar K. Browning in a 1974 article in Public Interest, the journal of those who develop sophisticated arguments for turning the nation's back upon the poor...
...some have been losers (the AFDC mothers...
...No doubt, that is, until it comes to counting the poor...
...Therefore, it is argued, it systematically overstates the extent of poverty in the United States...
...Among the richest one-fifth of families, average disposable income will have fallen from $39,348 to $39,158, a drop of 0.5 percent...
...The White House said that there were 6.25 million undocumented people in the country and that if the Simpson-Mazolli immigration bill, which would "legalize" some of them, were to pass, 1.7 million would become eligible for naturalization...
...Honest analysts can sincerely differ on the definition, but the reasons given for the alleged great decrease in the number of the poor in recent years are simply not persuasive...
...This is one way of saying that the nation has experienced more than a decade of stagnation and crisis, culminating in the absolute decline of 1982...
...There is no such thing as a "value-free" analysis of a con172 tentious social issue that relates to the spending of large amounts of money...
...These normally implacable critics of government waste assume that all in-kind goods and services are provided to the poor with 100 percent efficiency, that the public sector is every bit as good as the private sector...
...That was a central proposition for Lyndon Johnson's antipoverty effort...
...In point of political fact, any major effort to end poverty in a short period of time—particularly in the '80s when the illusion of endless growth has vanished— will have to be redistributionist...
...But during this same period the poverty line, defined as a percentage of median income, went down...
...in 1982 dollars...
...What is "the cash amount for which recipients would be willing to trade their right to the inkind transfer given their current incomes...
...There173 fore, the official thought of the '60s was, it was possible to abolish poverty without any redistribution of income whatsoever...
...Do you know that between 1979 and 1984 the average disposable income of the poorest one-fifth of American families declined by 9.4 percent...
...Another sector does harbor people who are poor in terms of reported income but not real income: the world of crime and drugs...
...No matter...
...Assuming that 80 percent of them are poor, there might be 4 million to 8 million impoverished humans in this society who have never achieved the dignity of even being a statistic...
...Average taxes for the poorest 20 percent of families will have increased from 9.7 percent of income in 1979 to 11.9 percent in 1984...
...But class distinctions hold even in the underworld, and the most successful lawbreakers tend to be white, and better educated, than the petty criminals...
...Resources are not infinite...
...In 1980 it was, measured in constant dollars, about what it had been in 1970—and 5.5 percent less than in 1979...
...Using this sophisticated calculus, Townsend made a very important discovery...
...The second technique values the goods and services in terms of their worth to the recipient...
...In the early 1960s, that rate was set at 3 percent, with an interim target for the Kennedy administration of 4 percent...
...Almost all of the figures I used come from the late '70s or 1980...
...Were 1955 food patterns, which were the base for the original definition of poverty, absolute...
...This procedure, the Census said, tended to relativize poverty and such updating could mask significant reductions in poverty...
...But in 1965 another USDA analysis concluded that the percentage spent on food was actually lower than in 1955...
...When it is employed by conservatives, a considerable irony surfaces...
...Average taxes for the richest 20 percent of families will have declined from 31.6 percent of income in 1979 to 31.1 percent in 1984...
...But, as we have seen, there must be a relative component in any definition of poverty...
...That family, it will be noted, turned a handsome "profit" on 180 being sick...
...Here is an excerpt from their study: A large number of factors [have] reenforced each other to make 1979-84 a period of little [economic] net growth and increasing inequality...
...There are then distinctions as objective as death between the various lower fifths...
...From a political perspective, this number is 3.5 percent more than in 1980 just before President Reagan took office...
...Thus thinkers from the most diverse points on the political spectrum endorse a definition of poverty that shows little or no progress in the U.S...
...This is why the sweatshop has made a dramatic return in the U.S...
...Indeed, it relied on new Gradgrind statistics to argue that the problem of hunger had been exaggerated...
...government were suddenly to announce that it was going to tax the cash value of public schools, including colleges and universities, and that the amount would be tacked on to the income of all those with children when they computed their income tax...
...So the lowest fifth in this country gets a smaller percentage of a smaller economic pie than the lowest fifth in the European welfare states...
...But her case cannot be ignored, not the least because she is one of the most authoritative researchers in the field...
...In the United States the income of the top quintile is slightly more than eight times that of the bottom quintile...
...Moreover, even the critique I have set down here of these tricky numbers somewhat understates the dimensions of poverty...
...4) The average family's federal, state, and local tax payments in 1984 will stand at $7,053, that is, 2.6 percent less than its level in 1979...
...From an economic perspective, the number is 2 percent less than its previous peak in 1979...
...The official poverty definition only counts cash income...
...In terms of real buying power, in the '70s, median income (50 percent of the people get more, 50 percent less) went up, then down, and ultimately nowhere...
...I do not, let me repeat, begrudge the elderly their benefits, but object to assigning those benefits—which are a very special kind of income for a very particular group of the poor—to the poverty population as a whole...
...So when Townsend computes (in the late '70s) the income of the poor, he includes the cash they receive, their capital assets, the value of their employee benefits, public goods and services, and even private "in-kind" goods and services (gifts, the worth of personal support services...
...I do not want to fall into the opposite error: that there is no relationship whatsoever between poverty and inequality...
...Between 1975 and 1980, the Census documents, the real buying power of cash public assistance transfers ("welfare") did not explode...
...In the Senate version of the bill, the aliens who came to the United States before January 1, 1977 would become permanent residents, those who entered prior to January 1, 1980, temporary residents...
...The central thesis in this revelation is simple enough...
...It deals, among other things, with a central problem in this whole exercise: how does one evaluate the worth of medical care that goes mainly to the aging poor...
...Because it takes Redistributing Income — the Wrong Way...
...After they have made their computations about the value of in-kind benefits, they add them to the official poverty line in order to establish a new line...
...This increase amounts to $450 per person and will occur in spite of efforts to restrain spending at the federal, state, and local levels...
...Let us now look at how the conservative theorists compute the cash value of in-kind goods and services...
...If one took the "low-cost" budget and multiplied it by three, that would result in a poverty line (for that family of four) of $3,995...
...Control of statistics is one of the critical functions of power in a democratic society...
...And so our calculations must lag somewhat behind the reality...
...7) A second source of growing inequality arises from relative changes in the tax structure...
...out any windows, and the astronomer should arrange the starry universe solely by pen, ink, and paper, so Mr...
...179 Perhaps a poor person does not share the extraordinary assumption that every good and service is provided in just the right proportion and with total efficiency...
...By taking the "market value" of the inkind goods and services, the CBO reduced the poverty population by 47 percent...
...The central factor in Orshansky's revisions had to do with the relation between food cost and the total budget of the poor...
...In 1976, Gerald Ford's Council of Economic Advisers took up this theme...
...Moreover, the bulk of the downward revisions mainly comes from looking at the in-kind benefits of one group among the poor—the 15 percent who are over 65 years of age—and then attributing them to the poverty population as a whole...
...In a complex argument presented to the American Statistical Association in 1979, Orshansky (along with C. 177 Fendler) asserted that in 1977—a "good" year for the poor—the official measure understated poverty by a factor of 54 percent, that is, it overlooked 25 million people...
...For instance, full employment is now being defined by a rate of unemployment— the "full-employment" unemployment rate...
...Current GNP forecasts have been revised to $1,620-$1,630 billion, and these revisions would increase our estimate of average disposable income by about 2 percent...
...In short, the largest single portion of in-kind income goes to people waiting to die or utterly unable to care for themselves and without any cash income...
...But poverty itself has persisted...
...In the '60s, when it was assumed that endless economic growth would automatically generate huge revenues for Washington, that did not seem too important...
...By the early '80s, then, the statistical abolition of poverty had turned into an academic cottage industry in the United States...
...But it's with regard to poverty that the political manipulation of the numbers is most marked...
...TOWNSEND, a man of the left, anticipated the central conservative critique of the poverty definition being made by the right today...
...The insurance value of all employee medical plans also would be counted as taxable income, and so would the worth of all business perks, like food and transportation...
...But clearly this $4,430 is "income" in a very special sense, since it cannot be spent on food, housing, or any other need (and is indeed most unwelcome "income" since one has to be sick to get it...
...Whether this constitutes the advance in well-being predicated by the conservatives and the Congressional Budget Office is, I think, at least open to question...
...Copyright © 1984 by Michael Harrington...
...One way of figuring the cash value for the recipient is to look at how much other people, similar in most respects but not getting the in-kind benefit, actually do pay for it...
...The U.S...
...If one were to take that $4,430 at face value, then a person could enter the middle class, or even the upper middle class, by virtue of having a long and expensive terminal illness...
...All of them sought to define a nutritionally adequate diet, but they differed in details—and cost...
...That, the Office of Management and Budget said, could mean $9.3 billion in additional welfare costs over a period of four years...
...But if power turned out to be much more hard-hearted than he thought, and change more a result of conflict than of the belated decency of the rich, he made the poor and their tormentors come alive in a mob of imagined people...
...The Council of Economic Advisers then settled this question by a political decision: it opted for the "economy" food budget, rounded off the numbers and, in the first official analysis of poverty in its 1964 report, established the poverty line at $3,000...
...But does this mean that we are back with Barry Goldwater, having defined poverty in such a way as to equate it with the bottom fifth, or tenth...
...Consider an analogous case...
...And second: Among the poor themselves, who gets the most from Washington...
...It is well known that there are many undocumented families in the United States and equally well known that a majority of them are poor...
...It is an utter falsification, as we will see in dealing with the most astounding conservative discovery of the 1970s: that poverty has disappeared and no one noticed...
...Let me be fair...
...Department of Agriculture (USDA...
...in Japan, hardly egalitarian, the difference is five to one...
...The problem in recent years has come not from overstating but from understating the number of the poor...
...recipient value" cuts out a mere 9.305 million persons, or 26.7 percent...
...In The Political Economy of Welfare Reform in the United States, he wrote: The "war on poverty" that began in 1964 has been won...
...In 1964, when the definition was first developed, it was assumed that this ratio was 1:3 (that one's food budget was one-third of one's total expenditures), as shown in a 1955 USDA survey of American food-consumption patterns...
...q 175 aspects of daily life—vacations, eating a meal in a restaurant, having a birthday party for children—then a careful survey of people in the United Kingdom reveals a very important chasm in the society...
...By using the argument of uncounted in-kind benefits, Browning concluded "there is practically no poverty—statistically speaking—in the United States today and indeed there has not been for several years...
...That person might want less, or more, of certain benefits...
...Time passed and the level of "acceptable" unemployment was regularly—and officially—increased...
...The first has to do with the definition of poverty in terms of cash income...
...Even if one were to accept the most extreme conservative theories about an overcount, it is probable that far more people in America are poor than we now officially recognize...
...When, for instance, I came up with my own poverty line in The Other America (1962), I relied on intuition and a sense of fairness as well as the few hard numbers then available...
...It is not hard to imagine the outcry that would result...
...It speaks of a reality that shows up on survey questionnaires and even in the relative frequency of mental illness among the social classes...
...This critique holds that the official poverty line(s), defined in terms of money income, ignores other sources of income that the alleged poor receive, most notably Food Stamps, housing subsidies, and medical care...
...Such assumptions, so convenient in the argument against any further poverty expenditures, are quickly forgotten when it comes to other areas of social policy...
...It has to do with how much money people will have to dispose of— just as the income tax does...
...This is mathematically possible, and Goldwater's attempt to make a statistical case for the biblical statement so often quoted on the right —that the poor will always be with us—fails...
...The evidence from his questionnaire, Townsend writes, shows that there exists a "threshold of deprivation . . . that is, a point in descending the income scale where deprivation increased disproportionately to the fall in income...
...For Townsend, and for Miller and Robey, the reason for this emphasis is contrary to that of the conservatives: Townsend, Miller and Robey show that the poor are poor in those categories, that it is not simply cash income they lack but legal services, public amenities, basic human respect, and on and on...
...The numbers define the limits of the possible, confer awesome legitimacy upon some parts of reality and deny it to others...
...I stress this point since it is crucial in dealing with one of the conservative critiques of the very idea of an antipoverty effort...
...So the "poverty share" method limits the value of medical care (or any other in-kind benefit) to its share in the definition of the poverty budget...
...About three-fifths of this decline-8 percentage points out of the 17 points—resulted from the actions of fiscally hard-pressed states, which increased welfare benefits far more slowly than the rate of inflation...
...The psyche, the spirit, the very routine of poverty, Townsend says, define a universe of its own...
...That is one of the major conclusions of a very valuable—not at all radical—study conducted by economists FRANK LEVY and RICHARD C. MICHEL for the Urban Institute of Washington, D.C...
...Printed by arrangement with Holt, Rinehart & Winston, New York...
...Another conservative tendency took the opposite tack from Browning and Anderson: federal efforts, it said, had blocked the elimination of poverty...
...This is almost $1,000 more than the poverty line for that person ($3,472...
...in Pittsburgh and Detroit between 300 and 400 percent...
...But which of the food plans to use...
...And clearly, one reason is the better medical care in Sweden for people at the bottom of its income structure...
...It is, then, necessary to explore the intellectual thicket in which the numbers hide...
...Reagan's Commission found such reports merely "anecdotal...
...Anything over that sum is not really additional disposable income but, more often than not, too much of a good (or terrible) thing...
...Moreover, standards change over time...
...Back in 1963 Mollie Orshansky, an economist who specializes in poverty, worked on what was to become the official definition of the poverty "line" (the "line" marks the level of poverty for an urban family of four, and there are other lines for larger and smaller units, for those who live in the country, and so on...
...The latter also spend a dispropor178 tionate amount of time in one of the major institutions of American poverty, the prison system...
...and "poverty-budget" shares drop out 7,757,000 or "only" 20.1 percent...
...All of the critics of an overcount take that definition as a starting point, even as they charge that it is utterly inadequate...
...The experts had the decency to change the name of what they were defining: from "full employment" to "high employment" to "the inflationthreshold unemployment rate...
...One might think it would be a matter of some moment that the person who originally elaborated the cash-income definition of poverty has thought for some time that it underestimates the problem...
...The many complications in each of these methods need not concern us here...
...First: Between the poor and the nonpoor, who gets the most from social spending...
...One of its sectors has nothing to do with the poor: the professionals who provide services off the books...
...But one area might seem to be an exception: Washington increased its outlays for medical care from $28 billion in 1975 to $58.545 billion in 1980...
...A man of realities...
...Families headed by a young or middleaged black woman will have had their after-tax income reduced by 10 percent...
...Orshansky's strategy was to take the price of a minimal diet and multiply it by three to compute total income at the poverty line(s...
...The remaining two-fifths resulted from Reagan administration expenditure reductions...
...There were, however, four food plans that had been developed by the U.S...
...A little later in Hard Times, there appears this unforgettable evocation of Gradgrind's study, crammed with the "blue books" of government statisticians: In that most charmed apartment, the most complicated kind of questions were cast up, got into exact totals, and finally settled—if those concerned could only be brought to know it...
...Adjusting the definition of poverty to conform to this empirical pattern meant that the multiplier had to be increased from 3 to 3.45...
...So while poverty is not inequality, it is significantly related to inequality...
...It is therefore important to stress a more substantive theme that will become apparent as the numbers are tracked to their lair: how money is actually spent on the poor...
...There were, however, some interesting admissions along the way...
Vol. 31 • April 1984 • No. 2
