How The New York Times And Washington Post Do "Poverty"

My post this past Sunday took note of a prominent Wall Street Journal op-ed last week that drove home some points that I have been making here for a few years about the measurement and incidence of “poverty” in the U.S. Most important is the systematic exclusion of some $1.2 trillion of government redistributions, $500 million of private charity, and as much as $2 trillion of underground economy from the incomes of lower income people when “poverty” is measured and reported. Since these three categories, in the aggregate, come to a large multiple of the amount that ought to be sufficient to eliminate all poverty under the government’s definition, I have long asserted that the government “poverty” data are systematically fraudulent, misleading, and useless for their intended purpose. . . .

Into this mix on September 12 the Census Bureau dropped its newly-released data on poverty for the year 2017. Admittedly that release does not itself contain the definitions and lists of exclusions that you need to understand how useless and deceptive this is. For that you’ll have to go on a hunt through the Census website; or, alternatively, read the Manhattan Contrarian or the Wall Street Journal op-eds, or maybe this big study from John Early for the Cato Institute. But again, if you are going to report on this subject, there is no excuse for not knowing this basic information.

So shall we take a look at how the New York Times and Washington Post reported on the Census release? In the New York Times, the big story by Glen Thrush, headlined “U.S. Recovery Eludes Many Living Below Poverty Level, Census Suggests,” appeared on September 13. The Washington Post ran an op-ed by Jared Bernstein on September 12 headlined “New census data show gains to low- and middle-income families but stalled progress on health coverage.” . . . .

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The Poverty Fraud In Action, With UN Assist

Back in December, I took note of a new Report out from the UN -- apparently it was just a draft -- supposedly addressing "extreme poverty" in the United States.  The Report was the work of a British guy named Philip Alston, designated the UN's "Special Rapporteur," who had just conducted a two-week "visit" to the U.S. during December 2017, and had supposedly in that brief time discovered to his horror the existence of pervasive "extreme poverty."  In my post, I stated that the Report was characterized by an extraordinary level of both "malice and ignorance," giving multiple examples of same.

Well, come June 1 the UN -- in particular, the so-called "Human Rights Commission," naturally -- decided to issue a somewhat modified version of this thing in final form, under the title "Report of the Special Rapporteur on extreme poverty and human rights on his mission to the United States of America."   Believe me, despite some revisions, the Report has gotten no better.  It is either completely uninformed and ignorant on the status of physical-deprivation poverty and redistribution programs in the U.S., or intentionally fraudulent as to same.  I would go with the latter, but you be the judge.  

More significantly, the Report was promptly seized upon by a group of some twenty Senators and Congresspersons of the Democratic Party -- led of course by none other than Bernie Sanders and Elizabeth Warren -- who sent a letter on June 12 to UN Ambassador Nikki Haley expressing "deep concern" about the "findings" in the Report.  The problem for Sanders, Warren, et al., is that, unlike Alston, they are not able to fall back on possibly being uninformed or ignorant on the U.S. poverty statistics or on the extent of redistribution and anti-poverty programs already in existence.  With one-hundred-percent certainty, they know that Alston's Report is so much hooey.  Therefore, their reliance on it is fraud, pure and simple.

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Are The Residents Of New York City Public Housing "Poor"?

Following up on yesterday's post, I thought it might be interesting to take an in depth look into the question of whether typical residents of New York City public housing are or are not "poor."  It turns out to be not such an easy question to answer.  Here is the nub of the problem:  These are people who are provided by government with resources of value far in excess of the amount deemed to constitute the federal poverty "threshold."  In the official measures, these additional resources are not counted, and the recipients are therefore, for the most part, deemed "poor."  But should the additional resources be counted?  If these resources don't count toward alleviating poverty, why again do we provide them?

First, consider a profile for a typical New York City Housing Authority (NYCHA) family.  NYCHA in 2017 reported the "average" income of its resident families as $24,336, and the average monthly rent as $509.  The $24,336 is slightly below the 2018 federal poverty threshold for a family of 4, which is $25,100.  Thus it is likely that about half, or somewhat more, of NYCHA families are said to be "in poverty."  But of course, the $24,336 does not include any increment for the implicit subsidy of the NYCHA apartment.  How much is that?  Because it is not paid in cash, there are different ways to value it.  One way would be to take the annual HUD operating subsidy to NYCHA, which is about $2 billion, and the forgiven NYC property taxes, which would be at least $500 million, and divide that up among the 170,000 +/- NYCHA apartments.  That is basically the methodology used by Mr. Early in his study discussed in yesterday's post.  That methodology would give you an implicit subsidy of about $15,000 per year per NYCHA apartment.  But that is a very low-end way of looking at it.  At the high end, you could value the NYCHA apartments by looking to what comparable apartments in their neighborhoods are currently renting for.  By this alternative methodology, many NYCHA apartments -- particularly those now located in fancy Manhattan neighborhoods, and those lining the Lower East Side waterfront -- come with annual subsidies in the range of $50,000 and even $100,000 per apartment.

So, just to make a case that draws out the contrasts, consider a 4 person family with the average NYCHA family "income" of $24,336 living in a water view apartment that comes with a $100,000 annual subsidy by the second methodology.  Add in that it is highly likely that such a family would also receive other government benefits:  Medicaid (that costs about $10,000 per beneficiary in New York, so $40,000 for this family), food stamps, heating assistance, clothing assistance, school lunches, Pell grants, cell phones, EITC, etc.  The full package likely costs the taxpayers well in excess of $150,000 per year.

So, is this family "poor"?

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Some Real Information On Poverty And Income Inequality

On numerous occasions on this blog, I have pointed out that the government's data on poverty and income inequality are systematically fraudulent.  For starters, they define "income," for purposes of determining both poverty and income inequality, in a way to arbitrarily exclude well over a trillion annual dollars of government transfers and benefits, leading to results that are entirely misleading.  And then those intentionally misleading results are used to advocate for yet more government programs and transfers, all of which will again be excluded when measuring poverty and inequality in the next round.  For a few examples of my previous posts on this subject, see here, here and here.  If you have time, I would recommend reading those for background.

What I have not previously done is attempt to go through all the uncounted government programs and quantify the effect that including them would have on the reported rates of poverty or income inequality.  One reason I have not done that is that it is a lot of work.  Another reason I haven't done it is that even correcting for all the omitted government programs would only be a start at the project of getting a handle on the real rate of poverty in the United States, that is, poverty in the sense of actual physical deprivation.  Even if all government benefits and transfers get included in the "income" of the recipients, and the statistics for poverty and income inequality get corrected accordingly, there would still be very large amounts of resources available to the "poor" that would remain uncounted.  The most obvious example would be the unreported illegal economy (estimated in this 2011 study at approximately $2 trillion annually, or about 12% of the economy, which is even more -- almost double -- the amount of uncounted government benefits).  And then there's the provision of resources by families and extended families.  Nevertheless, doing a study to figure out what the quantitative effect of including all these previously-excluded government benefits would be on the poverty and inequality statistics is certainly a worthwhile project.

And thus into my mailbox this week floated exactly such a study, by a guy named John Early at the Cato Institute.  The study is titled "Reassessing the Facts about Inequality, Poverty, and Redistribution."   Although I only got it this week (in the snail mail), it has a publication date of April 24.  Early is identified as a former assistant commissioner in the Bureau of Labor Statistics, which probably is a good indication that he knows how these numbers are put together (although the income and poverty numbers come from the Commerce Department rather than BLS).

So first, John, could you give us a list of some of the government benefits and handouts that are excluded when the government measures "poverty" and "income inequality"?

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This Is Not A Post About Global Warming

This is definitely not a post about global warming.  Except that it is.

A friend this morning sent me a link to the Quillette website, which a few days ago posted an edited version of a speech that was to be delivered at Kings College, London, by a guy named Adam Perkins.  The title of the speech is "The Scientific Importance of Free Speech."   Unfortunately, Kings College canceled the speech at the last minute because it was deemed to be too "high risk."  Perkins thus joins the ranks of Charles Murray, Christina Hoff Sommers, and -- as of just two weeks ago -- Josh Blackman, as people who have been run off campus or shouted down for holding views deemed by contemporary progressives as too offensive to be heard.

Try reading the Perkins piece, and see if you can figure out what about it is so offensive.  I'll give you a few excerpts that summarize the theme:

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Completely Taken In By The Poverty Fraud

In a post last month titled "The Malicious UN Addresses 'Poverty' In The United States,"  I recounted how the UN's "special rapporteur" on poverty had just issued a big report excoriating the U.S. for the persistence of poverty within its borders.  The only problem was, the "rapporteur," one Philip Alston, combined extreme malice against the U.S. and everything it stands for with complete ignorance of the subject matter on which he was "rapporting."  From all you could tell from his "rapport," he knew nothing of the arbitrary "cash income" limitations of the U.S. measure of "poverty," and nothing of the annual trillion dollars or so of in-kind benefits handed out to the "poor" that are systematically not counted in measuring their "poverty."  And then, in the malice category, Alston took the occasion of his "rapport" to deliver a self-righteous lecture to the U.S. on every issue from tax policy to the criminal justice system to income inequality to environmentalism to alleged racism.  I concluded:

Alston excoriates the U.S. for not adopting massive socialist-model "solutions" to ameliorate non-existent poverty, while seemingly remaining completely unaware that the socialist model, foisted on the world by the UN, is what keeps the real poor of the world poor.

It took a month, but it won't surprise you that the New York Times and some of its commenters and letter writers have now picked up on World Bank notions of "poverty" in the U.S., and on the Alston "rapport," and have swallowed these things hook, line and sinker.  This began with a January 24 op-ed by Princeton economics professor Angus Deaton (headline: "The U.S. Can No Longer Hide From Its Deep Poverty Problem"), followed by two letters in the January 28 edition.  There are also some 1102 comments (and counting), but I'll spare you from those.

Deaton proves once again that the way to get a fancy appointment as an economics professor at Princeton is to know nothing of what you are talking about.  (See, e.g., Krugman.)  Here's his lede:

You might think that the kind of extreme poverty that would concern a global organization like the United Nations has long vanished in this country. Yet the special rapporteur on extreme poverty and human rights, Philip Alston, recently made and reported on an investigative tour of the United States. . . .  The World Bank decided in October to include high-income countries in its global estimates of people living in poverty. We can now make direct comparisons between the United States and poor countries.

So, Angus, how many people are in this "extreme poverty" in the U.S., and how do you make that determination?  

According to the World Bank, 769 million people lived on less than $1.90 a day in 2013; they are the world’s very poorest. Of these, 3.2 million live in the United States. . . .   [And then, adjusting for cost of living issues,] when we compare absolute poverty in the United States with absolute poverty in India, or other poor countries, we should be using $4 in the United States and $1.90 in India.  Once we do this, there are 5.3 million Americans who are absolutely poor by global standards.

Who are these 5.3 million people in the U.S. supposedly living in "extreme poverty"?  Deaton of course tells us nothing about the methodology that came up with these numbers.  Does he know anything about the methodology?  Unlikely.  Spending some real time today trying to get some information on how they do this, I find this October 2017 "global poverty update from the World Bank," which contains a very inadequate description of some of the methodology.  Although never stated explicitly, it becomes clear that they have sent out some kind of a survey, and compiled the answers.  Then this:

We . . . include observations reporting zero incomes in these [wealthy] countries . . . .  These observations should not be interpreted as corresponding to zero consumption. This is a long-standing issue concerning the comparability of poverty statistics across consumption and income distributions. It has not been resolved, and further work is clearly needed, but data users interpreting poverty numbers for rich countries should bear it in mind.

How many of these "zero income" responses are there?  They don't say, but it's obviously enough to affect the results or they wouldn't mention it at all.  Do they do any follow up at all to determine if these "zero income" responses are real?  Again, they don't explicitly say, but the statements that this is a "long-standing issue" that "has not been resolved," and "further work is clearly needed" strongly imply that they don't.  (Note that on this very subject several years ago I interviewed the head of poverty statistics at the U.S. Census Bureau, and she admitted to me that as to "income" the Census Bureau takes whatever answer a respondent gives on the survey form without any kind of follow up or double check.)

In other words, these "zero income" responses could perfectly well be people who just don't want to reveal their income to someone they don't know and therefore they put down a zero.  Or they could be in one of many perfectly legitimate and not small categories of people who really do have zero "income" (by the arbitrary definitions of that term) and yet are not anything you would ever consider "poor":  disabled people living on full government support in a group home; students on scholarship; retirees living off savings or a reverse mortgage; young people living with family support while looking for a job, etc., etc.  So how many of the World Bank's and Deaton's 5.3 million Americans are in which of these categories?  The fact is, they have no idea.  And yet they treat the 5.3 million figure as some kind of legitimate indicator of a level of suffering.  

Meanwhile, to the extent that there actually are people who are striving in life but aren't earning anything meaningful right now and have no other resources to draw on, there is that $1 trillion of annual government "anti-poverty" spending.  Somehow Deaton completely omits to mention that spending.  Just for starters, any such very-low-income person would immediately be entitled to a federal food stamp subsidy of $192 per month, which is already well more than the $120 per month of this World Bank "extreme poverty" standard -- and food stamp spending is only about 7% of "anti-poverty" spending in the U.S.  Note that neither food stamps nor almost any other government "anti-poverty" effort counts as "income."  This goes for everything from public housing to Medicaid to clothing and energy assistance to multiple other food and nutrition programs.

And the World Bank specifically warns people using their numbers about the "long-standing issue" of these "zero income" reports, and to "bear [that] in mind" when using the data.  But even those explicit warnings do not stop the likes of fancy schmancy Princeton economics professor Deaton, wanting to play on our sympathies, grasping onto this very dubious data to claim that the U.S. "can no longer hide from its deep poverty problem."

Deaton then of course makes the usual call for collective response to the looming crisis (although he doesn't advocate for any particular government program in this op-ed):

[T]he social contract with our fellow citizens at home brings unique rights and responsibilities that must sometimes take precedence [over our obligations to the poor in other nations], especially when they are as destitute as the world’s poorest people.

The Times letter-writers step in to fix Deaton's failure to make the obligatory call for more government spending and programs.  For example, there is this from letter-writer Peter Singer (sometime Times ethics columnist):

My Princeton colleague Angus Deaton has done us all a service by pointing to the existence of extreme poverty in the United States, and especially the failure of this affluent society to provide adequate shelter for homeless people. There is no doubt that governments at all levels should be doing more to meet this need. 

OK Angus and Pete:  If $1 trillion of annual spending still leaves 5.3 million people in "extreme poverty" because next-to-none of the spending counts as relieving the poverty, what is the "more" that the government should be doing that could possibly make any difference?