IBJOpinion

HICKS: Let's fight poverty, but also keep it in perspective

Mike Hicks
December 25, 2010
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Mike Hicks

There is a certain poignant irony in the U.S. Census Bureau’s release of 2010 poverty statistics this Christmas week. It reminds us that, behind the green eyeshades of professional data collectors, the folks at the Census Bureau have an acute marketing sense.

The Gospel of Luke tells us that Mary and Joseph traveled to their familial birthplace as part of a census. The details and timing of the Roman census are hazy, but the intent of these counts was to levy taxes for Rome. This is a rich story and serves as a high point of the New Testament’s beautifully subversive backdrop of freedom from tyranny. Unlike the Roman census of Quirinius, the modern U.S. census affects the distribution, not collection, of tax dollars. It is understandably a bit more welcomed.

Among the first of the big census releases (that will continue for years) are local poverty rates for 2010. These are widely reported, but what do the data tell us? The sad truth is, almost nothing of consequence. Here’s why:

According to international measures of poverty, the United States has almost none. The rest of the world measures poverty by how much your household consumes in goods and services, not how much it earns. So, the seven students who work in my research center slip into the ranks of the impoverished, according to our census. None of my students is rich, but to place an MBA student alongside the 2 billion or so people in the world who subsist on a couple of dollars a day is morally vacuous. This is equally true of the poorest of Americans, whose average Medicaid costs alone place them squarely in the world’s middle class. So, how then to think about and measure poverty in America?

I think it is better to sidestep the official poverty statistics and focus on the problems of the poorest quarter of Americans and ask: How can policy help? The answer isn’t encouraging. While maybe half of the poorest quarter are there temporarily—due to school or job change—almost everyone who is truly poor possesses one or more of three common characteristics: disability, drug addiction or teen-age parenting. I could include lack of a high school diploma, but there is nearly a perfect overlap between these categories. These things need to be said to drive our policy response, not to append a morality tale. It is devilishly hard to make the lives of the poor more tolerable, much less improve their future. The same lack of judgment that leads to drug addiction and teen-age pregnancy is unsurprisingly not well-rewarded in labor markets. Disability is even less easily remedied.

We’d do best by recognizing that poverty in America is wholly a relative thing. This makes it far less onerous than true poverty around the world. This recognition shouldn’t change materially our wish to see it go away—that is a more enduring lesson from the time of Quirinius. But understanding the problem might better help us with its fix and prognosis.•

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Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

  3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............

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