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The Ladder

A Blog from New America's Asset Building Program

Sorry, Heritage- "Too Clean to Be Poor" Doesn't Pass the Sniff Test

Published:  August 9, 2011

Measuring poverty is a tricky business, and the shortcomings of the official federal standard have been well documented (including by us). This year, for the first time, Census will release a supplemental measure of poverty alongside its historical calculation. This makes long overdue strides toward reflecting the complexities of what a modern family needs to support a basic standard of living, but for many, it still falls short of capturing the array of assets and liabilities they hold that are the enduring arbiters of wellbeing and opportunity.

Other efforts are underway to fill in some of these gaps. The Half in Ten Campaign is developing a set of indicators to assess how progress toward cutting poverty in half is being made and in what areas additional engagement is required. Can families access and afford safe child care? If not, this could be an impediment to maintaining employment for parents. Do families have access to basic financial services and enough savings to fix a broken car or buy new clothes for growing kids? If not, they may take on debt or make material sacrifices that could make the path out of poverty more arduous. This approach acknowledges that poverty is not a singular condition and making progress requires action on multiple fronts.

Then there are others who assert that looking at a more inclusive set of factors needlessly complicates an assessment that could be accomplished with a single indicator that surmises all that is necessary to conclude "poor" or "not poor." Thus, the Heritage Foundation has proposed, if I make take the liberty of pronouncing it so, The Appliance Standard. In their recent report, the authors conclude that "poverty" as it is popularly conceived, entails a level of deprivation that is contradicted by the actual living conditions of the poor. This is because most households defined as "poor" have refrigerators. Need more evidence? Almost two-thirds have washing machines and half also have dryers. According to their calculations, when subtracting out families with sanitary food storage and clean clothes, the actual number of households living in poverty is closer to 1 in 500 rather than the 1 in 7 estimated by Census. For people and policy makers who want to target resources to the truly poor, The Appliance Standard is your best metric.

"However, if the goal is greater income redistribution--rather than policies that precisely and effectively target those truly in need--then big numbers matter a lot. Liberal activists continue to insist that very large numbers of Americans live in severe deprivation.

This is no accident. The interlocking assertions that poverty is widespread, affecting one in seven Americans, and that the poor live in desperate conditions are both ideologically necessary for the Left. Together thy provide justification for policies to greatly expand the welfare state and further 'spread the wealth.'"  

There are so many logical fallacies that it that formulating a response can be a little disorienting (perhaps the authors were trying to employ the "the best defense is a good offense" approach), but let's take a shot at pointing out some of the most egregious offenses.

1- If you dictate the terms of the argument, even incorrect assumptions can prove your point. The paper argues that a) people who own appliances are not poor + b) a lot of people who are currently counted as poor own appliances = c) those people are not really poor. You can do this with anything. a) Chef's own blenders + b) I own a blender = c) I am a chef. Admittedly, I do enjoy cooking, but I'm blogging right now, not cooking, so demonstrably not a chef. Now you try one.

2- Indicators have to be relevant to what is being measured. In industrialized countries in 2011, having a refrigerator doesn't tell you much about a person's standard of living. Even according to the authors, the cost of the ides that they label as "amenities" have declined considerably, so they're hardly luxuries. As the Center for American Progress points out, a family could sell all their basic appliances and come up with just about two and a half month's rent. Indicators that measure wellbeing should be tied to people's needs and resources available to meet those needs. Wider Opportunities for Women has itemized the basic expenses that families encounter and estimate that a family of four (WITH employment based benefits) needs about $68,000. For context, this is three times the official Census estimate. Clearly, just because someone can afford a $50 television, doesn't mean that they buy adequate and nutritious food, get the medical care they need, or find employment that provides the earnings to meet those needs. 

3- False dichotomies lead to false choices. In this report's telling, a narrow measure aligns with accurate targeting of resources and a broader measure aligns with a self-serving political agenda. To turn this on it's head, if your goal is to curb government spending by establishing a threshold for providing support below what most people would regard as an acceptable standard of living, then a narrow measure would prescribe that outcome. If your goal is to intervene before that occurs, a broader measure would be a better tool. The later would also better position people to be resilient in times of difficulty and give them the resources they need to gain economic security. In some ways, however, current policy employs the former. Income and asset tests for safety net programs like TANF or SNAP exclude all most the poorest families from eligibility. If these limits were raised and accessible to families not yet in such a financially precarious situation, they may require a lower level of benefits for a shorter length of time and with a lower likelihood that they would need the program in the future. This is certainly better form families and could generate cost savings over time. If families are allowed to build savings, for instance, they are more able to self-insure against financial setbacks and successfully transition off of assistance or less likely to need it to begin with. Current asset limits prohibit this outcome. Any insinuation that these programs are already too generous to too many people could be devastating to millions of families already struggling to get by and costly in the long run.

It should be easy to dismiss a report that begins by saying that poor people living today being better off than most people a hundred years ago should prompt reconsideration of what it means to be poor. False assumptions and lax arguments make it offensive but benign. But in an environment where even Pell grants are being called welfare, integrity may not matter as much as political sentiment, and that's scary.

 

 

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