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The Truth About Poverty

The Census Bureau just released their annual report on poverty, and Vox took a close look at the details, revealing information that may come as a surprise to many people.

Some people like to paint the poor as shiftless, lazy freeloaders, who refuse to work or otherwise make bad choices. But the numbers say otherwise. Of the people whose incomes fall below the poverty line, 68.6% are children (24.2%), elderly (27.7%), or disabled (15.7%). So the (super)majority of the poor are completely outside the job market (unless you are in favor of bringing back child labor).

An additional 19.2% are students (5.7%), caretakers (7%), or were involuntarily unemployed (e.g., laid off) for at least part of the year (6.5%). And another 4.9% are fully employed, but their wages are lower than the poverty level. That leaves just 5.4% in the “other” category. Why these last people are not earning a living is not specified, but even if nearly all of them are lazy freeloaders, that’s still just around 5% of the total poor, which corresponds to close to 1% of the US population.

The second interesting fact is that our “welfare state”, which is actually pretty weak compared to other industrialized nations, still manages to pull quite a few people out of poverty. Most successful is our Social Security program, which manages to reduce the poverty rate among the elderly from 43.7% to only 10%. Less effective are our programs for the disabled (blind, deaf, crippled, etc.) where government programs reduce their poverty rate from 49.9% to 30.7%. Even with government assistance, a third of all blind people live in poverty.

Increasing programs even a small amount can reduce our poverty rates even more. Canada – under a conservative government no less – recently expanded their benefits for children and saw a significant reduction in poverty.

So does this mean I’m advocating for a socialist welfare state, where everyone is guaranteed an income above the poverty line? Not at all. I think things can swing too far in the other direction. I lived in England during the 80s (the height of their dalliance with socialism), and I met people who had simply decided to leave their jobs and go on the dole, for no particular reason other than they didn’t feel like working for a while. But people like that are no reason to demonize the vast majority of the poor, who currently have no alternatives.

There is a reasonable middle ground. At the very least, we should be able to eradicate poverty among the elderly, children, and disabled populations – those people who are outside the labor market entirely. Having senior citizens, children, or seriously disabled people starving or homeless is obscene. Unemployment insurance should help people temporarily unemployed. The minimum wage should keep track of inflation, and I would eliminate the exemption for restaurant waitstaff. We should also have a discussion about financial aid for students, and assistance to help with care for the elderly and disabled (healthy people shouldn’t have to quit their jobs in order to care for an elderly parent or disabled child).

Then, after we establish a real working social safety net for these people – who are legitimately poor – then we can do something about any remaining freeloaders we keep hearing about.

So how do we pay for all this? There are plenty of ways. We could switch to a single-payer healthcare system. Every single-payer health insurance system in the world is less expensive than the current American health insurance system. Even with Obamacare saving us money while insuring more people, a single payer system would save us around $5 trillion.

Don’t like that? There are plenty of other ways to save money. Like reducing corporate welfare, the $217 billion we spend on subsidies and tax breaks to big corporations. Speaking of freeloaders, how about taxing inheritance fairly so we aren’t subsidizing lazy rich kids? Or avoid starting any new stupid wars, like the one in Iraq that cost us over $2 trillion and will cost an additional $4 trillion over the next four decades. And that’s not counting what it is costing us to fight terrorism (like the radical Islamist militants who were reinvigorated by the war in Iraq).



  1. ebdoug wrote:

    Being a flaming liberal, I ask myself “what child or even what blade of grass chose to be born?”

    Friday, September 18, 2015 at 4:26 am | Permalink
  2. David Freeman wrote:

    Very well said IK! I wish I could memorize this for when I need to counter someone’s right wing talking points.
    I’d like to add to your excellent list of ways to “pay for all this”. Sometimes spending money can save money. Maintaining infrastructure is much cheaper in the long run than waiting for it to break. Money spent on infrastructure will also create jobs pulling people out of poverty and on to the tax roles. Increased energy efficiency and expanding renewable energy will likewise reduce poverty. Most importantly, IMHO, addressing climate change aggressively will reduce the future economy crushing costs of dying seas, warming climate, desertification and worsening ‘natural’ disasters.
    Great post and thanks for your years of quality blogging.

    Friday, September 18, 2015 at 9:08 am | Permalink
  3. Jim M wrote:

    Very surprisingly, I challenge one paragraph here:

    “I lived in England during the 80s (the height of their dalliance with socialism), and I met people who had simply decided to leave their jobs and go on the dole, for no particular reason other than they didn’t feel like working for a while.”

    The 1980’s followed the height of UK socialism and was characterized by the rise of what we in the US call “Neo Conservatives” under Thatcher. Describing it as a dalliance, especially given the abject failures of what has followed, is condescending.

    In the UK then, as in the US, folks who simply leave their job are ineligible for unemployment benefits.

    As you correctly point out, judging the vast majority based on some individual personal observations is unlikely to be a good basis to draw accurate conclusions. If your intention was to highlight how this is is not a good basis to make a decision, more emphasis on why that is the case would have been helpful!

    Lastly, on a philosophical note, I challenge the automatic assumption that it’s bad for people who may be trapped in unhappy, unsuitable or abusive workplaces to have the option to escape, rethink and regroup. If this sounds like a concept that would doom society and the economy to failure, we need to stop and re-evaluate what the fundamental purpose of our society is. The pursuit of fulfillment over the course of a lifetime, enslavement to a means of survival and the whims of those who hold power over us, or a sensible balance of the two? Check out for an important perspective.

    Thanks for all you do and for helping keep us sane!

    Friday, September 18, 2015 at 9:32 am | Permalink
  4. wildwood wrote:

    Great article. I copied it and saved it to my computer so I have those facts at hand the next time I need them.

    Friday, September 18, 2015 at 10:05 am | Permalink
  5. Iron Knee wrote:

    Jim M, I did gloss over quite a few things in that paragraph in the interest of keeping the post to a sane length. I used England as an example only because I had first-hand experience there. I was there when Thatcher was dismantling their welfare state and the pendulum may indeed have swung way too far in the other direction.

    I still claim that if you look at countries that went fully socialist (Russia, Cuba, China, etc.), it is hard to not judge them as failures.

    Does that mean that there are no advantages at all to socialism (including a guaranteed income)? Of course not. I love Cuba and socialism contributed to their amazing wealth of arts and music. I know outstanding artists and musicians in the US who struggle to survive. It is a terrible idea to judge art and music only by how much money it makes.

    But who judges what art is good and what is not worth supporting? Many socialist countries did a terrible job of supporting the arts.

    There are some interesting compromises that work. Portland has a law where 1% of the cost of any new buildings downtown must be spent on public art, but the owner of the building gets to decide what art to spend it on. Canada (for a long time) had a very active government system for supporting the arts, but unfortunately it has been largely dismantled. Support for the arts and music in the US is now a joke.

    Anyway, there are lots of possible discussions here, but I just wanted to focus on a (moderate) solution to poverty in this country.

    And I don’t think I support a Basic Income Guarantee, although I do support universal basic health care and a few similar ideas (like free public transportation).

    Friday, September 18, 2015 at 10:21 am | Permalink
  6. LINK wrote:

    I’ve lived in several countries, including the US and the UK, and I now live in Norway. Norway is considered the most socialist country in Europe and does have the sort of safety nets that allow people to not work, should they choose. I don’t know and haven’t met anyone here who chooses to live on benefits. In fact, the only people I know who don’t work are stay-at-home parents.

    What I do find is that intelligent people have considered a wider variety of jobs because they can be assured of having a living wage whatever they want to do, and they can get the education they need for free.

    Friday, September 18, 2015 at 10:47 am | Permalink
  7. PATIOTSGT wrote:

    I couple things to add to the discussion.

    On the elderly, many may fall below the poverty line, but may not be living in poverty. My mother (father past away) for example lives in a retirement community. When my parents moved there they sold their home and bought a place there for cash and can remain there until death with no chance of being kicked out. She earns SS and a small pension left over from my father. The 2 together fall below the poverty line, but she has 24/7 care available, 3 meals a day, endless activities, free transport around town and even money for some trips. She is not poor, but having grown up during the Great Depression, thinks she lives very well.

    I am all for having a temporary social safety net to take care of those who fall on bad times or bad luck. I am for providing help for those who are born or become disabled. I am for those who by no fault of their own lose their job.

    Inside the statistics when I went to the sight are several things that we can fix with some social engineering. For instance, the poverty rate for people without a HS diploma is 28.9% while those with a HS diploma is only 14.2%. Wow, what a difference we could make just in that area if we put an emphasis on that issue. Also, the difference between 2 parent families in poverty 6.2% vs single female households at 30.6% is just huge. We should put even more emphasis on that social issue.

    I agree that there are places to get money for those that really need it, like the recently spent 500 million to train 54 Syrian freedom fighters of which only 5 remain.

    Our gov’t wastes more “little money” like this every year then the public would like to know about. And IK I agree about the corporate welfare, we should eliminate it, but won’t as long as politicians take donations.

    Friday, September 18, 2015 at 12:42 pm | Permalink
  8. wildwood wrote:

    Adding to poverty is our ridiculous “war” on drugs. Millions incarcerated who can’t fill out a job application without admitting they have been in jail. And for many, their only crime might have been having some pot around. We need to change that for non violent offenders in most cases. I also thing non violent offenders should be allowed to register to vote once they’ve served their time.

    And then there is the enormous expense of keeping them in jail. That money would be better used elsewhere.

    Friday, September 18, 2015 at 3:14 pm | Permalink