Home > Facts and Figures > Update – Half of You are Still Below Average!

Update – Half of You are Still Below Average!

David Henderson over at the Library of Economics and Liberty takes on the media canard that about half of us are sinking into poverty (loosely defined).

[The U.S. Census Bureau’s new Supplemental Poverty Measure] changes the way poverty is measured from an absolute measure to a relative measure. Here’s the Census Bureau’s explanation of the “weakness” in the old measure:

The current poverty thresholds do not adjust for rising levels and standards of living that have occurred since 1965. The official thresholds were approximately equal to half of median income in 1963-64. By 1992, one half median income had increased to more than 120 percent of the official threshold. [italics in original]

What’s the Census Bureau’s fix? Make poverty a moving target. If standards of living improve, as most of us optimistic economists expect, then define as poor those people who are below some percentile.

In other words, if we are getting better off, we had better define poverty as better off, too. Otherwise, where will the poor people come from for our exploitative news stories and political campaigns?

Look, some people do face crushing poverty in this country.  It is a sad fact, but it is a fact that always has been and always will be, for as long as human nature remains fundamentally the same.  But let’s not dumb down the definition.  When most of our “poor people” are morbidly obese and watch too much television, it is sort of insulting to much of the rest of the world to call it a crisis.

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