Where do facts about poverty come from!

WEDNESDAY, FEBRUARY 13, 2013

Wagner and Kristof speak: Where do facts about poverty come from? We wondered last night as we watched Alex Wagner discussing the State of the Union.

Obama had proposed a higher minimum wage. Rachel asked Alex to comment. To watch the full segment, click this:
MADDOW (2/12/13): Joining us now is Alex Wagner. She’s host of Now with Alex Wagner. Alex, I think the president made news on this point. Is this a realistic policy goal? Do you expect him to get the attraction from Congress on this?

WAGNER: I don’t know, Rachel. I mean, it was really shocking to me that the Republicans couldn’t stand up for, you know, for equal pay. They couldn’t stand up for a fair voting system in the U.S. To see them agree to $9 an hour would seem to be like—it would seem to be a jump for them.

But at the same time, this is the story of America right now. It is one of the most under-discussed issues in the country—the fact that one in two American families live at or near the poverty line. The fact that the federal poverty measure is $23,000, $24,000 a year for a family. These are unlivable wages. And to some degree, it should not be shocking that the president would take this up as a matter of discourse on the national stage.
We were struck by Wagner’s factual claim, although we’ve seen similar claims in the past. “One in two American families live at or near the poverty line?” Is that an actual fact?

The word “near” is rather amorphous, of course. With that in mind, let’s review what Nicholas Kristof recently said about poverty.

Kristof is now on book leave from the New York Times. In a column shortly before his departure, he made this claim about poverty in the U.S.:
KRISTOF (1/24/13): American assistance programs, from housing support to food stamps, have had an impact, and poverty among the elderly has fallen in particular (they vote in high numbers, so government programs tend to cater to them). But, too often, such initiatives have addressed symptoms of poverty, not causes.

Since President Lyndon Johnson declared a ''war on poverty,'' the United States has spent some $16 trillion or more on means-tested programs. Yet the proportion of Americans living beneath the poverty line, 15 percent, is higher than in the late 1960s in the Johnson administration.

What accounts for the cycles of poverty that leave so many people mired in the margins, and how can we break these cycles?
That highlighted claim struck us as implausible, but we’ve never studied poverty statistics. Is the poverty rate really higher than it was under Johnson?

In this case, someone came along and declared this fact to be semi-bogus—or something. On February 6, Robert Greenstein challenged Kristof in a letter. His letter served as last week’s “Invitation to a Dialogue” in the Times.

Greenstein is president of the Center on Budget and Policy Priorities. He is generally regarded as one of DC’s best-informed inhabitants:
GREENSTEIN (2/6/13): Nicholas D. Kristof is clearly right: Too many young children from poor families face diminished opportunities by the time they're just 2 years old, and we should do more to help them overcome the formidable obstacles before them. But his portrayal of today's safety net deserves a broader look.

Noting that the ''official'' poverty rate is no lower today than in the late 1960s, Mr. Kristof said our anti-poverty programs largely address symptoms of poverty without reducing poverty itself.

But the official poverty measure considers only cash income in determining whether a family is poor. It counts cash welfare payments, which have fallen dramatically since the late 1960s, but not benefits like food stamps and the earned-income tax credit, which provide much more assistance now than then.

The government's more comprehensive poverty measure that counts these other benefits shows that safety-net programs now cut the number of poor people nearly in half—by more than 40 million—compared with where the nation would be without these programs.
Oops. That still doesn’t tell us what the actual poverty rate is as compared to where it was under Johnson.

Poverty facts can be hard! Reading the new Education Week, we found reporter Sarah Sparks saying this in a front-page report:
SPARKS (2/6/13): In schools with fewer than one in four students in poverty, Michigan State’s Ms. Wright found teachers explained the meanings of nine [vocabulary] words per day, compared with only six words a day in schools with a majority of students in poverty. Similarly, teachers in wealthier schools discussed the meaning of five challenging words per day, compared with only three challenging words per day in higher-poverty schools.
By the end of that second sentence, we were completely confused by Sparks’ logic. That said, should Sparks have been citing the number of students “in poverty?” We can’t find the text of Wright’s study on-line—but this is the problem:

Education journalists often talk about “poverty” when they really mean something like “low income.” Education statistics generally measure the percentage of students eligible for free or reduced-price lunch—and the cut-off point for the federal lunch program is much higher than the poverty line.

Where do facts about poverty come from? Wagner’s fact may have come from a report like this one from CBS News, which said that “a record number of Americans—nearly 1 in 2—have fallen into poverty or are scraping by on earnings that classify them as low income.” In that report from December 2011, “low income” was defined as “roughly $45,000 for a family of four.” That’s roughly double the family income Wagner cited last night.

Where do facts about poverty come from? We’ll only say this: When we liberals give you the facts about poverty, we may be inclined to overstate, as education reporters often do. We may be inclined to mislead the rubes, much like The Other Tribe does.

In our case, of course, it’s for a good cause—that is the obvious difference. At any rate, our discussions of poverty proceed in this way. Voters have no virtually way to know which facts are actually accurate.

48 comments:

  1. It's true.

    We shouldn't be reduced to stammering "well, there *is* too much poverty" and "well, federal programs *do* help."

    We ought to be able to say just how much of a problem poverty is and to make sensible comparisons to the past -- and to be able to say why they are sensible comparisons.

    It's true: Disappearing context like "poverty *or* low income" isn't helpful.

    We ought to be able to say just how much the federal programs we have (which includes more than just EITC, school lunch and food stamps -- healthcare programs must be counted in as well) change things for the people who receive them.

    Are such practices (failure to source claims, overstating by elimination of context) pervasive on the right? Of course they are. And they're supplemented sometimes by outright lies, too.

    Nevertheless, it's a worthy project to get "our" house in order regardless.

    ReplyDelete
    Replies
    1. I think trying to nail down poverty statistics is likely to be a giant waste of time. Some people will see poverty as a relative condition within a society while others will see it more fixed terms (like across time). So a minimum wage worker today will be seen by some as having a very low income--not enough for a family to live on. Others will say that same worker has a cell phone and flat screen TV-things not even rich people had in the 1980s. And it will go 'round and 'round.


      Delete
    2. Just to clarify, I am trying to say that it will be impossible to use poverty statistics in a political way with much success. Just look at David in Cal below.
      Of course, that doesn't mean that nobody should be diligent in tracking poverty statistics...

      Delete
  2. I didn't watch the SOTU last night. But, I'm flabbergasted at the President's proposal to raise the minimum wage during a time of high unemployment. Virtually all economists would agree that raising the minimum wage tends to reduce the number of jobs.

    ReplyDelete
    Replies
    1. But you're not flabbergasted at cutting spending during periods of high, prolonged unemployment.

      Figures.

      Delete
    2. You mean, "Virtually all economists on the dole from the American Enterpise Institute would agree that raising the minimum wage tends to reduce jobs."

      Maybe Obama and his team just aren't smart enough to follow the American Enterprise Institute and take every hack word it prints as gospel, like you do, filthy troll.

      Delete
    3. Quaker in a BasementFebruary 13, 2013 at 7:28 PM

      "Virtually all economists would agree..."

      Seriously? You expect us to let a big, fat bundle of straw like that one go meandering by without question?

      Delete
  3. Minimum-wage laws can cause involuntary unemployment among workers with few marketable skills. This especially harms young people denied experience that would enhance their future employability. As workers are disemployed in markets covered by minimum wages (Panel A), they move to uncovered markets (Panel B) paying lower wages--paper delivery, mowing lawns, or odd-job self-employment. Or they may take "off-the-books" jobs that violate the minimum wage law. But not all workers are absorbed in uncovered markets. Some may become "hard-core' unemployed, while others drop out of the labor force. Still others may become criminals.

    See full article athttp://www.unc.edu/depts/econ/byrns_web/Economicae/minwageunemployment.html

    Black teenagers are particularly harmed by increases in the minimum wage. High-paid union members are helped. It's striking that despite being black, Obama's policies have helped teachers (via opposition to vouchers) and union members at the expense of blacks.

    AnonymousFebruary 13, 2013 at 5:25 PM, I favor higher taxes and lower spending, even though these steps retard the economy, because I believe the current level of deficit and money creation is a big threat. But, IMHO there's no excuse for raising the minimum wage.

    ReplyDelete
    Replies
    1. I run a small business and pay well above the minimum for the few workewrs I need with declining demand for my products. I would never hesitate to hire a worker to increase output if there were more customers waitng for product. Also, so-called "Obamacare" has helped me provide healthcare for my workers -- i.e.rules granting incentives where an employer has a signfican proportion of lower paind workers on payroll. I have been and hope to soon be a "job creator." Sooner rather than later if the nasty shills for capital as opposed to labor and consumers get knocked down at least one more time.

      Delete
  4. "Black teenagers are particularly harmed by increases in the minimum wage. High-paid union members are helped."

    WTF?

    What high-paid union member makes less than $9.00 per hour?

    If employers are forced to pay entry level wages starting at $9.00 per hour, they will cut back on merit raises at the top.

    ReplyDelete
    Replies
    1. Here's the deal, gravymeister. The higher minimum wage helps the union workers by making it harder to replace them with low-paid workers (who might not be as good.)

      For workers who were making less than the new minimum wage, in the short run some get a raise, others get fired. In the long run, businesses make extra efforts to replace minimum wage workers with automation. Foreign companies get an advantage over US companies.

      Black teen-age unemployment is horrible. According to this source, http://laborcenter.berkeley.edu/blackworkers/monthly/bwreport_2013-02-01_57.pdf
      black unemployment for ages 16 - 19 is 33.2% for male and 43.3% for male. It's terribly urgent that these kids get jobs so as to get into the regular job market.

      Many of these kids aren't worth a great hourly wage now. They would become more valuable as they got more experience. The problem is to convince an employer to hire them for their first job. The higher the minimum wage is, the less likely an employer is to give an inexperienced kid his first job.

      Delete
    2. Din C

      Over and over, I have seen the best employees, with years of experience, canned (usually with a bogus "violation") so totally incompetent "kids" can replace them at 2/3rd the salary.

      The experienced employees that keep their jobs are burdened with ""training" their replacements in ADDITION to their other duties

      Too bad for the customers that get poor service.
      They can't go to the competition because the competition does the same or goes out of business.

      Corporate HHRs are bottom feeders, and they will always go for the lowest priced employee.

      For instance, The Home Depot is willing to pay more than the minimum wage already for full-time employee new hires, but the annual raise for employees that score "outstanding" in most of the categories in their compensation reviews cannot get more than a 25 cent-per-hour raise each YEAR!

      Do you remember the story of Circuit City?
      Management made a series of costly blunders, then fired the knowledgeable employees in favor of new hires that were paid slightly more than minimum wage.

      "In 2007, the starting wage for new employees was dropped from $8.75 an hour down to $7.40 an hour ($6.55 being the federal minimum wage at the time). In a press release on March 28, 2007, Circuit City announced that in a "wage management" decision in order to cut costs, it had laid off approximately 3400 better-paid associates and would re-staff the positions at the lower market-based salaries. Laid-off associates were provided severance and offered a chance to be re-hired after ten weeks at prevailing wages. The Washington Post reported interviews with management concerning the firings.[24]
      The Post later reported in May 2007 that the layoffs, and consequent loss of experienced sales staff, appeared to be "backfiring" and resulting in slower sales.[25]"
      http://en.wikipedia.org/wiki/Circuit_City

      Circuit City went belly up, and Best Buy went from a "carry-your-purchase-to the-register" policy to staffing their stores with people with product knowledge (and good salesmanship.)

      Raising the minimum wage merely raises the bar, it does not change a mind set that has been in effect since the first woolen mill was built in Manchester, England.

      Delete
  5. Do you have empirical data? If not, I suggest you stuff the claim back from whence it came (your rectal duct).

    ReplyDelete
    Replies
    1. What data would you like, Matt? I gave a source for the black teen-age unemployment rate. I think that data pretty well proves that current policies are working very badly for black teen-agers.

      Delete
    2. What you have failed to do, of course, is to provide any data or solid evidence of any kind that links high unemployment among black teenagers to increases in the minimum wage.

      Black teenaged unemployment has ALWAYS been sky-high no matter what the minimum wage was. And apparently for many, many, many reasons that are either beyond your capacity to understand as you look for simple answers to complex problems, or unable to crack through your willful ignorance.

      Delete
    3. Black teenaged unemployment has ALWAYS been sky-high no matter what the minimum wage was.

      Not so. My impression is that if you go back to the days before these counter-productive minimum wage laws -- say to the 1940's and 1950's, black teen-age unemployment was much lower than the sky-high levels seen today. This quote supports my impression:

      ...the ratio of black to white unemployment rates ac-tually grew from rough parity as late as 1940 ... to more than 2 to 1 by 1990.

      http://people.ucsc.edu/~rfairlie/papers/published/aer%201997%20-%20RacialUnemp.pdf

      Delete
    4. Post hoc ergo propter hoc.

      You should read the details of your sources before you cherry-pick.

      The report YOU cite concludes that the reason for rising black unemployment was due to Blacks migrating from regions of high employment to regions of low employment.

      Also:
      “Some potential culprits that are not easily accounted for using the census data include government interventions in the labor market (such as the minimum wage and unemployment insurance), changes in the locus of discrimination away from explicit wage differentials to biased hiring and layoff decisions, weakened enforcement of antidiscrimination laws, and the effects of crime and family structure on Black men residing in impoverished urban areas.”

      There are more things in heaven and earth, David, than are dreamt of in your monomaniacal ideology.

      So, naturally, you will cling to your interpretation, and cull every website offering supporting opinions, and ignore all facts that in any way detract from your argument.

      And so it goes.

      Delete
    5. David, don't deal with "my impressions". Deal instead with facts.

      America, even black America, was much more agrarian in the 40s and 50s. Black teenagers living on farms, even if their parents were sharecroppers, were not counted as unemployed.

      Nor are black teenagers today if they are full time students.

      This will also come as a shock to you, but the first federal minimum wage law was passed in 1938, and the wage was raised a number of times during the 40s and 50s --- and apparently, according to your own statement, WITHOUT any negative effect of black teenaged unemployment at all.

      Now that might lead a thinking person to consider other factors -- and there are many -- besides the minimum wage that are driving the unemployment rate among black teens.

      Delete
    6. gravymeister and anon: One would have to look at the level of the minimum wage to try to discern its impact on black unemployment. I'm not prepared to to that analysis.

      Regardless of that point, my last post showed that an assertion by an ananyous commenter was false. That comment was incorrect, of whether or not minimum wage laws are to blame for black unemployment.

      Delete
    7. So you admit that you are too lazy to do the analysis to prove your assertion that increases in the federal minimum wage drive black teenaged unemployment up. But you somehow "know" that it is true.

      And of course, you are now going to ignore the fact that black teenaged unemployment has always been much higher than unemployment in general. And even if your silly, pulled-out-of-your-hindquarters assertsion that black teenaged unemployment was at "parity" during the 40s and 50s, that would be after 20 years of the federal minimum wage law, which means there would be a host of other factors instead of, not in addition to, the federal minimum wage.

      One might also wonder where your sudden concern for black teenagers comes from, but it isn't too hard to figure out.

      There just pawns to use in another silly argument in which you have no evidence at all to support.

      Delete
    8. Megan McArdle -- no conservative -- explains minimum wage.

      It’s popular with unions, who dislike competition with low-wage labor. And it doesn’t cost the government anything ecept the cost of printing some new posters telling people what the minimum wage is.

      But is it a good policy idea?

      The three main considerations are the same as for any economic policy: who does it help? Who does it hurt? And what is the effect on growth?

      It’s obvious who benefits from a higher minimum wage: people who get minimum wage jobs. In theory, it may also boost the incomes of people who are making near the minimum wage, as employers raise those wages to ensure that these are “better than minimum wage jobs”—though in this labor market, I wouldn’t bet on it.

      But who are the people in minimum wage jobs? This is primarily being sold as a poverty-fighting tool, so it would help to know how many of the people making it are poor.

      The answer seems to be no; most of the people making the minimum wage are not living in households below the poverty line. Over half the people earning minimum wage are below the age of 25; for them, this is not likely to be a permanent condition, but a first rung on the income ladder. Many are students or entry level workers who are part of established households with higher earners....

      The thing about unemployment is that it's much, much worse than having a crap low-wage job. It's worse than almost anything. It's one of those life events that people never really recover from. Two years after a divorce or being widowed, people have adjusted, and are mostly about as happy as they were before the terrible event. But after two years of unemployment, people are still miserable. And even after they get another job, a prolonged spell of unemployment often has permanent effects on future earning power, and risk for things like depression. We should weight the losses of the people who are out of work much higher than the gains to the people who get an income boost...


      Read the whole thing at http://www.thedailybeast.com/articles/2013/02/14/what-to-think-about-the-minimum-wage.html

      Delete
  6. Megan McArdle may be no conservatve, as she is more of a radical Koched-up libertarian Corporatist.

    jawbone

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