Thread: More Importation of Poverty

Robert Samuelson's column, cited below, is printed below Mr. Edwards' blog.

More Importation of Poverty
By James R. Edwards Jr., May 31, 2010

Robert Samuelson, in his weekly column in the Washington Post, highlights a key factor in why U.S. poverty rates seem not to improve. Jesus warned that the poor will always be there. But after concerted efforts and giant leaps over more than half a century, surely America is doing better than the statistics show.

Samuelson's column, titled "Why Obama's poverty rate measure misleads," primarily addresses a questionable poverty calculation the administration has proposed. However, he cites "the apparent lack of progress" in reducing poverty as "misleading," with one reason being that "it ignores immigration." He writes:

First, it ignores immigration, which has increased reported poverty. Many immigrants are poor and low-skilled. From 1989 to 2007, about three-quarters of the increase in the poverty population occurred among Hispanics – mostly immigrants, their children and grandchildren. The poverty rate for blacks fell during this period, though it was still much too high (24.5 percent in 2007). Poverty "experts" don't dwell on immigration, because it implies that more restrictive policies might reduce U.S. poverty.

The United States had for most of our history a strong policy of rejecting immigrants unable or unwilling to be self-reliant. Those who gained admittance but later went on the public dole faced deportation. In other words, the storied "poor, huddled masses" and "wretched refuse" largely didn't get admitted into the United States, and those immigrants who did had to be self-sufficient. This common-sense, tough-love approach is known as "public charge doctrine." But it became a victim of political correctness, judicial activism, and welfare statism.

The Clinton administration fought reforms that would have more fully restored public charge doctrine. In 1996, the GOP Congress would have required visa sponsors to earn at least 200 percent of the official poverty level. The status quo at the time was 100 percent of poverty income to be an immigrant sponsor – woefully inadequate. The Clintonites strong-armed lawmakers into accepting minimum sponsorship income of 125 percent of the federal poverty level.

Fast-forward to today. The newly enacted health law makes those earning 133 percent of the federal poverty level eligible for the welfare program Medicaid. That means immigrant sponsors can be poor enough to be on Medicaid (and other welfare programs Samuelson names, including the Earned Income Tax Credit, which is an outright redistribution-of-wealth program), yet "wealthy" enough to sponsor others for visas.

There is something extremely wrong with this picture. It shows how the combination of chain migration, lax visa sponsorship and public charge laws, and a welfare state guarantee the continued importation of the world's poorest. This puts America on a permanent treadmill of importing poverty while decrying how our antipoverty efforts haven't raised the economic boats of the underclass.

http://www.cis.org/edwards/importing-poverty

Links within the original are available by clicking on the source link above.

Why Obama's poverty rate measure misleads
By Robert J. Samuelson
Monday, May 31, 2010

Who is poor in America? This is not an easy question to answer, and the Obama administration would make it harder. It's hard because there's no conclusive definition of poverty. Low income matters, though how low is unclear. Poverty is also a mind-set that fosters self-defeating behavior -- bad work habits, family breakdown, out-of-wedlock births and addictions. Finally, poverty results from lousy luck: accidents, job losses, disability.

Despite poverty's messiness, we've tended to measure progress against it by a single statistic, the federal poverty line. It was originally designed in the early 1960s by Mollie Orshansky, an analyst at the Social Security Administration, and became part of Lyndon Johnson's War on Poverty. She took the Agriculture Department's estimated cost for a bare-bones -- but adequate -- diet and multiplied it by three. That figure is adjusted annually for inflation. In 2008, the poverty threshold was $21,834 for a four-member family with two children under 18.

By this measure, we haven't made much progress. Except for recessions, when the poverty rate can rise to 15 percent, it has stayed in a narrow range for decades. In 2007 -- the peak of the last business cycle -- the poverty rate was 12.5 percent; one out of eight Americans was "poor." In 1969, another business cycle peak, the poverty rate was 12.1 percent. But the apparent lack of progress is misleading for two reasons.

First, it ignores immigration, which has increased reported poverty. Many immigrants are poor and low-skilled. From 1989 to 2007, about three-quarters of the increase in the poverty population occurred among Hispanics -- mostly immigrants, their children and grandchildren. The poverty rate for blacks fell during this period, though it was still much too high (24.5 percent in 2007). Poverty "experts" don't dwell on immigration, because it implies that more restrictive policies might reduce U.S. poverty.

Second, the poor's material well-being has improved. The official poverty measure obscures this by counting only pre-tax cash income and ignoring other sources of support. These include the earned-income tax credit (a rebate to low-income workers), food stamps, health insurance (Medicaid), and housing and energy subsidies. Spending by poor households from all sources may be double their reported income, reports a study by Nicholas Eberstadt of the American Enterprise Institute. Although many poor live hand-to-mouth, they've participated in rising living standards. In 2005, 91 percent had microwaves, 79 percent air conditioning and 48 percent cellphones.

The existing poverty line could be improved by adding some income sources and subtracting some expenses (example: child care). Unfortunately, the administration's proposal for a "supplemental poverty measure" in 2011 -- to complement, not replace, the existing poverty line -- goes beyond these changes. The new poverty number would compound public confusion. It also raises questions about whether the statistic is tailored to favor a political agenda.

The "supplemental measure" ties the poverty threshold to what the poorest third of Americans spend on food, housing, clothes and utilities. The actual threshold -- not yet calculated -- will almost certainly be higher than today's poverty line. Moreover, the new definition has strange consequences. Suppose that all Americans doubled their incomes tomorrow, and suppose that their spending on food, clothing, housing and utilities also doubled. That would seem to signify less poverty -- but not by the new poverty measure. It wouldn't decline, because the poverty threshold would go up as spending went up. Many Americans would find this weird: People get richer but "poverty" stays stuck.

What produces this outcome is a different view of poverty. The present concept is an absolute one: The poverty threshold reflects the amount estimated to meet basic needs. By contrast, the supplemental measure embraces a relative notion of poverty: People are automatically poor if they're a given distance from the top, even if their incomes are increasing. The idea is that they suffer psychological deprivation by being far outside the mainstream. The math of this relative definition makes it hard for people at the bottom ever to escape "poverty."

The new indicator is a "propaganda device" to promote income redistribution by showing that poverty is stubborn or increasing, says the Heritage Foundation's Robert Rector. He has a point. The Census Bureau has estimated statistics similar to the administration's proposal. In 2008, the traditional poverty rate was 13.2 percent; estimates of the new statistic range up to 17 percent. The new poverty statistic exceeds the old, and the gap grows larger over time.

To paraphrase the late Sen. Daniel Patrick Moynihan: The administration is defining poverty up. It's legitimate to debate how much we should aid the poor or try to reduce economic inequality. But the debate should not be skewed by misleading statistics that not one American in 100,000 could possibly understand. Government statistics should strive for political neutrality. This one fails.

http://www.washingtonpost.com/wp-dyn/co ... 03296.html