Home
/
RELIGION & LIBERTY ONLINE
/
Why Poverty Figures Can Be Misleading
Why Poverty Figures Can Be Misleading
Mar 18, 2025 11:17 AM

What if told you that between 90-100 percent of Americans are living in “healthcare poverty.” You would probably object and say that while the country certainly has a healthcare crisis, my numbers are surely inflated. After all, most people in the U.S. have access to healthcare.

In reply, I explain that while it’s true most people are able to consume healthcare services, they are still in poverty since those services are paid for at least partially by the government or private insurance. You would probably respond that I seem very confused on this issue. And you’d be right.

Yet when we hear reports that between 14 and 16 percent ofAmericans areliving in poverty, few people bother to ask, “Are they talking about consumption or e?”

The reason it matters is the same reason that most Americans are not in “healthcare poverty”: they are able to consume more goods and services than they are able to pay for with their e. As James X. Sullivan, an economics professor at Notre Dame, has explained:

“A different measure of poverty that’s based on consumption, rather than e, would not only measure poverty more accurately, but would lead to a better understanding of the effects of policy and would help lawmakers craft policies to better serve the nation’s poorest,” according to Sullivan, whose research examines the consumption, saving and borrowing behavior of poor households in the U.S., and how welfare and tax policy affects the well-being of the poor. The Census poverty measure ignores the effects of some of the most critical anti-poverty weapons, most notably the Earned e Tax Credit, Medicaid, food stamps, and housing subsidies.

e received from food stamps, for example, grew by more than $14 billion in 2009. By excluding these benefits in measuring poverty, the Census figures fail to recognize that the food stamps program lifts many people out of actual poverty,” Sullivan says. “If these programs are cut back in the future, actual poverty will rise even more.”

Using e-based numbers only also overlooks the struggles of many Americans who are tightening their belts – those who are worried about losing their jobs or facing foreclosure, or those who devote a large chunk of their paychecks to paying off medical bills. The standard of living for these people is lower than their e would suggest.

Another paper by Sullivan and co-author Bruce D. Meyer of the University of Chicago, argues that consumption offers a more robust measurement of poverty than e. When measured correctly, poverty has declined over time. From the abstract:

This paper examines changes in the extent of material deprivation in the United States from the early 1960s to 2009. We investigate how both e and consumption based poverty have changed over time and explore how these trends differ across family types. Estimates of changes in poverty over the past five decades are very sensitive to how resources are measured. A poverty measure that incorporates taxes falls noticeably more than a pre-tax e measure. Sharp differences are also evident between the patterns for e and consumption based poverty. e poverty falls more sharply than consumption poverty during the 1960s. The reverse is true for the 2000s, although in 2009 consumption poverty rises more than e poverty . . . e based poverty gaps have been rising over the last two decades while consumption based gaps have fallen. We show that how poverty is measured affects position of the poor, and that the consumption poor appear to be worse off than the e poor.

To see the stark difference it makes, look at this graph from the recentjoint report bythenew joint report from the (conservative) American Enterprise Institute and the (liberal) Brookings Institution:

AsRobert VerBruggen notes, “This [consumption-based] approach doesn’t always create low estimates; in the early 1970s, it sits right between the two other measures. But it shows dramatic improvement and a low poverty rate today. Even when the other rates are spiking, consumption poverty remains basically steady.”

Indeed, it doesn’t make sense to propose solutions for poverty and then exclude those very solutions from being considered when measuring the poverty rate, especially when the poverty-fighting initiatives have been effective.

If we’re going to have an honest and serious debate in this country about how to help the poor, we must consider the level of consumption by the poor—not just the numbers on their paycheck.

See also:What Christians Should Know About Consumption

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
The Moral Dimension of Work
“The world is not a parsimonious place, in spite of the dogmas of the ecologists,” says James V. Schall in this week’s Acton Commentary. Our most unsettling economic problems are actually not economic but moral—moral ones that cannot be simply passed on from generation to generation. They need to be chosen and internalized by each person in each generation at the risk of deflecting material goods from their proper purposes. Work likewise is not exclusively for its own sake. Rather...
Psalm 19 and Human Flourishing
The mission of the Acton Institute is to promote a free and virtuous society characterized by individual liberty and sustained by religious principles. We seek to articulate a vision of society that is both free and virtuous, the end of which is human flourishing. That phrase—“human flourishing”—has e such a buzzword, though, that it’s in danger of losing any real meaning. As Scott Swain says, “Due to its widespread usage across our culture, its susceptibility to multiple meanings, and its...
Creation Care and Catholic Social Teaching
Pope Francis recently declared September 1 as the World Day of Prayer for the Care of Creation, an annual day of prayer begun by the Orthodox Church in 1989. In conjunction with the event, Catholic Relief Services and the United States Conference of Catholic Bishops have released “Care for God’s Creation,” the first of a seven-part video series on Catholic social teaching. (Via: Crux) ...
Catholicism’s tension with the Enlightenment
In a recent article for The Stream, Acton’s Director of Research, Samuel Gregg asks the question, “Is Catholicism Compatible with the American Experiment?” Gregg cites an article by political philosopher Patrick Deneen who suggested that “the main argument among American Catholics will concern the relationship of modern liberal democracies–and, at a deeper level, the American Founding–with Catholicism.” Gregg doesn’t necessarily disagree with this assertion, but argues that it “reaches further back to the early modern period often called the Enlightenment.”...
Video: Wayne Grudem And Barry Asmus On A Solution To The Poverty Of Nations
So far, 2015 has given us our busiest Acton Lecture Series ever, and we’re pleased to share more of it with you today on the PowerBlog. Back on April 16, Acton had the privilegeof hosting Wayne Grudem and Barry Asmus, who spoke on the topic of the book they jointly authored,The Poverty of Nations: A Sustainable Solution. First, the bios: Wayne Grudem is Research Professor of Theology and Biblical Studies at Phoenix Seminary; he is the author or co-author of...
Court Rules March for Life Qualifies for Abortifacient Mandate Exemption Based on Moral, Not Just Religious, Objections
Imagine if the government were to tell an organization dedicated to veganism that, because of a new mandate, they must purchase a meat platter to serve at their monthly meetings and that the chair cushions in their conference room must be made of leather. Appalled by this governmental intrusion, the vegans ask to be excluded from the mandate since none of their members wish to eat bologna while sitting on dead cow skin. They also point out that a group...
Subsidizing Subsidiarity: How Conservatives Failed New Orleans
This week marks the 10th anniversary of Hurricane Katrina making landfall on the Gulf Coast. As always happens when remembering suchignominious events, we look back in hindsight to attempt to learn what could have been done differently. If we’re being honest with ourselves, we conservatives will admit that we share some of the blame for the disaster—just not in the way many of us realize. The colossal failures in leadership in the wake of Hurricane Katrina proved once again that,...
Acton Institute Selected as Templeton Freedom Award Finalist for Poverty Inc. Documentary
The Acton Institute has been named as one of six finalists for this year’s $100,000 Templeton Freedom Award for its documentary film, Poverty, Inc. The announcement of the finalists was made Monday by the Atlas Network, a Washington-based organization that advances the work of market-oriented public policy organizations all over the world. The winner will be selected Nov. 12 in New York. Atlas’ description of Poverty, Inc. says the documentary “provides prehensive perspective on the issue, giving voice to charity...
Can Capitalism Save the Arts?
Capitalism is routinely castigated as an enemy of the arts, with much of the finger-pointing bent toward monsters of profit and efficiency. Other critiques take aim at more systemic features, fearing that the type of industrialization that markets sometimes tend toward will inevitably detach artists from healthy social contexts, sucking dry any potential for flourishing as a result. But what if the opposite is true? I offer the argument over at The Federalist. Free economies introduce their own unique challenges...
Rev. Sirico on Francis’ ‘Year of Mercy’
Pope Francis recently announced a “year of mercy,” making it easier for the Catholic Church to forgive women for having abortions. Acton’s President and Co-founder Robert Sirico went on WSJ Live to discuss this. Watch below: ...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved