How to Lie About Poverty and Inequality
Is the United States becoming more unequal economically, and how would we know? Do we talk about wealth or income, or a bit of both? Why? One could ask similar questions about the poverty rate. Is it going up, or not? How do we know? What counts as ‘poor’ anyway, and why is that?
Those questions make it a bit difficult to wrap your mind around poverty and inequality in the United States. Maybe that’s the point. If knowledge is power, then knowing how what terms like poverty and inequality mean, to social scientists, not politicians and Internet trolls is important.
Muddying the waters leave plenty of maneuvering room for dishonest actors who have a political agenda to peddle. This is what this article is about. But first, a few definitions are in order. You’ll also find plenty of questions with no answers or vague answers. This lack of direct answers is probably unavoidable given how slippery and vague the subject is.
Poverty:
Everyone knows what poverty means, in a general way. If you can’t pay the bills and buy groceries, then you must be poor. If you can’t afford housing and regular meals, then you are poor. Right? Depends. Some people think they are poor if they can’t afford to drive a car and eat out regularly. Other people think they are doing okay if they are able to eat enough and sleep somewhere dry and warm.
In those definitions, we see the difference between absolute poverty and relative poverty. As you might have guessed, the first form of poverty is about lacking the resources to meet your basic needs. Relative poverty is a feeling that you are worse off than people like you. Relative poverty could also be defined with numbers, but that isn’t important for now. Instead, let’s focus on another definition.
In the United States, poverty also has an official definition that’s based on income and family size. The United States Census Bureau measures income before taxes and compares that amount to values set by the United States government. If you want to know more about measuring poverty in the United States, this Census Bureau page is a good place to start.
So, we can objectively measure how many people are above a certain income threshold and how many are below it. Add up those numbers for households of all sizes, from one person to 10 or more, and you can get a poverty rate using simple arithmetic. If 10 million households out of 100 million are below those federal poverty lines, then the poverty rate is 10%.
Critics might take exception to that crude measurement of poverty for a couple of reasons. The poverty line, the divider between “poor” and “not poor” is the same all across the country. The cost of living obviously does vary from place to place. Do a quick Web search of apartments for rent in San Francisco. Compare those rents to the numbers you get if you look up apartments for rent in Memphis, Tennessee.
Another criticism, a dishonest one, focuses on how well poor people in the United States live. A conservative critic will cite statistics something like these:
- 90% of people living in poverty have air conditioning and home phone service
- 48% of people below the poverty line own mobile phones
- 79% of people living in poverty have microwave ovens
It doesn’t matter where those numbers come from. They are probably invented out of thin air. It doesn’t matter, because the point is to obscure how poor many Americans really are.
Inequality:
Inequality means many things, but I’ll focus on income inequality, which is the distribution of pay among groups in a population. Social scientists will talk about inequality between social classes, racial or ethnic groups, men and women, and so on. Inequality isn’t always bad because any society where one person earns more than other people is a society with income inequality.
Globally, we see income inequality between nations as well. The average income, after you adjust for the cost of living, varies from one nation to another.
But, why is income inequality bad? If a tiny percentage of the country makes millions a year and most people are doing much less well, so what? It should surprise no one that this very question has millions of words devoted to it. Writers on the Left and on the Right have plenty to say about income inequality and its favorite cousin, wealth inequality.
Wealth inequality is just the distribution of valuable assets like real estate and investments among a population. The term ‘inequality’ is just descriptive. If anyone has a few more dollars in net worth than anyone else in their society, then wealth inequality exists.
Poverty, Inequality, and Politics:
As anyone who follows American politics will know, both poverty and inequality come up often. Politicians and activists on the Left complain about rising poverty rates when the economy starts struggling. When the economy descends into recession, as it seems to have done, people start paying more attention to inequality. They ask questions like:
> How much inequality are we willing to tolerate?
> How unequal is the nation?
> Why is inequality bad?
Take a minute to think about each of those questions, then keep reading. Think back to what you just read about wealth inequality and income inequality.
Now, you might not think wealth inequality is a problem. Or maybe you decided it could be a problem, but things aren’t that bad. Maybe your feeling that we too much wealth inequality in the United States has been confirmed. In all cases, the point is you’ve tried to think about wealth inequality in a focused and disciplined way, free of whatever pundits and politicians told you is true.
