Home
/
RELIGION & LIBERTY ONLINE
/
Why Poverty Figures Can Be Misleading
Why Poverty Figures Can Be Misleading
Oct 15, 2026 2:55 AM

What if told you that between 90-100 percent of Americans are living in “healthcare poverty.” You would probably object and say that while the country certainly has a healthcare crisis, my numbers are surely inflated. After all, most people in the U.S. have access to healthcare.

In reply, I explain that while it’s true most people are able to consume healthcare services, they are still in poverty since those services are paid for at least partially by the government or private insurance. You would probably respond that I seem very confused on this issue. And you’d be right.

Yet when we hear reports that between 14 and 16 percent ofAmericans areliving in poverty, few people bother to ask, “Are they talking about consumption or e?”

The reason it matters is the same reason that most Americans are not in “healthcare poverty”: they are able to consume more goods and services than they are able to pay for with their e. As James X. Sullivan, an economics professor at Notre Dame, has explained:

“A different measure of poverty that’s based on consumption, rather than e, would not only measure poverty more accurately, but would lead to a better understanding of the effects of policy and would help lawmakers craft policies to better serve the nation’s poorest,” according to Sullivan, whose research examines the consumption, saving and borrowing behavior of poor households in the U.S., and how welfare and tax policy affects the well-being of the poor. The Census poverty measure ignores the effects of some of the most critical anti-poverty weapons, most notably the Earned e Tax Credit, Medicaid, food stamps, and housing subsidies.

e received from food stamps, for example, grew by more than $14 billion in 2009. By excluding these benefits in measuring poverty, the Census figures fail to recognize that the food stamps program lifts many people out of actual poverty,” Sullivan says. “If these programs are cut back in the future, actual poverty will rise even more.”

Using e-based numbers only also overlooks the struggles of many Americans who are tightening their belts – those who are worried about losing their jobs or facing foreclosure, or those who devote a large chunk of their paychecks to paying off medical bills. The standard of living for these people is lower than their e would suggest.

Another paper by Sullivan and co-author Bruce D. Meyer of the University of Chicago, argues that consumption offers a more robust measurement of poverty than e. When measured correctly, poverty has declined over time. From the abstract:

This paper examines changes in the extent of material deprivation in the United States from the early 1960s to 2009. We investigate how both e and consumption based poverty have changed over time and explore how these trends differ across family types. Estimates of changes in poverty over the past five decades are very sensitive to how resources are measured. A poverty measure that incorporates taxes falls noticeably more than a pre-tax e measure. Sharp differences are also evident between the patterns for e and consumption based poverty. e poverty falls more sharply than consumption poverty during the 1960s. The reverse is true for the 2000s, although in 2009 consumption poverty rises more than e poverty . . . e based poverty gaps have been rising over the last two decades while consumption based gaps have fallen. We show that how poverty is measured affects position of the poor, and that the consumption poor appear to be worse off than the e poor.

To see the stark difference it makes, look at this graph from the recentjoint report bythenew joint report from the (conservative) American Enterprise Institute and the (liberal) Brookings Institution:

AsRobert VerBruggen notes, “This [consumption-based] approach doesn’t always create low estimates; in the early 1970s, it sits right between the two other measures. But it shows dramatic improvement and a low poverty rate today. Even when the other rates are spiking, consumption poverty remains basically steady.”

Indeed, it doesn’t make sense to propose solutions for poverty and then exclude those very solutions from being considered when measuring the poverty rate, especially when the poverty-fighting initiatives have been effective.

If we’re going to have an honest and serious debate in this country about how to help the poor, we must consider the level of consumption by the poor—not just the numbers on their paycheck.

See also:What Christians Should Know About Consumption

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Ukraine’s Holodomor: A Genocide Lost in the Pages of History
Seventy years ago this November, a new word entered the lexicon which would contextualize and put a name to the mass killings of minority groups that had gone on for centuries: genocide. The Polish-Jewish lawyer who coined the word, Raphael Lemkin, used it for the first time in his book, Axis Rule in Occupied Europe, published in November 1944. Lemkin had been deeply troubled with mass killing and the lack of legal framework for adjudication of its perpetrators from a...
Is Winning the Only Point of Voting?
Winner. In an otherwise excellent post yesterday on how, of all things, politics in our (basically) two-party system actually brings together Americans like nothing else, Joe Carter ends with this addendum: Addendum: Casting a “protest vote” for third-party candidates is essentially casting a vote for the party you like the least. For example, say you prefer the Democrats to the Republicans but choose to vote for the Green Party candidate. Since the Green candidate will not win, you vote effectively...
Should Would-Be Entrepreneurs Major In Music?
One would think that the road to success for entrepreneurs would start with a business major. After all, you have to know marketing and business strategies and accounting and all that stuff, right? Panos Panay gives some thoughtful rebuttal to that idea. He is a successful entrepreneur, having created Sonicbids, a platform where musicians and bands can book gigs, promote themselves and basically act as their own managers. He is also the founding manager of Berklee Institute for Creative Entrepreneurship....
#DitchtheDivide: Religious and Economic Liberty in and Age of Expanding Government
The Acton Institute will hold the second of five conferences in the international series, “One and Indivisible? The Relationship Between Religious and Economic Freedom” in Washington on Nov. 10. These events are designed to explore the concept of expanding government in the Western World and its impact on religious liberties and freedoms. The Washington conference, titled “The Relationship Between Religious and Economic Liberty in an Age of Expanding Government,” will examine how the Christian conception of religious liberty limits the...
How Four States Voted to Hurt Low-Skilled Workers
Last night the election results revealed wins for Republicans in almost every state. But in four states where the GOP gained ground — Alaska, Arkansas, Nebraska, and South Dakota — the poor and unskilled suffered a loss. In each of those states, voters passed ballot measures that will increase the government-mandated minimum wage. Beginning in 2015, the wage in South Dakota will increase to $8.50 an hour. In 2016, Alaska’s wage will be $9.75 an hour and $9 an hour...
Why ‘Anti-Sharia’ Legislation Can Restrict Religious Liberty for Christians
On Tuesday, voters in Alabama passed a ballot measurethat, among other things, forbids courts, arbitrators, and administrative agencies from applying or “enforcing a foreign law if doing so would violate any state law or a right guaranteed by the Constitution of this state or of the United States.” Such measures (other states have passed similar laws) are often dubbed “anti-Sharia” measures since preventingthe encroachment of Sharia is usually their primary objective. Sharia is the moral code and religious law of...
My Take: Why Evangelicals Oppose Immigration Amnesty
The Bible teaches wise e, not blanket amnesty. Biblical teaching would give first consideration to foreigners applying e to America as blessing, and lawfully (there are four million who’ve applied and are waiting). I believe blanket amnesty of many millions more is unwise. Amnesty is unkind to nearly 20 million Americans who are currently looking but cannot find a job. Wisdom and kindness would bring millions of jobs to America before petition for scarce jobs. Biblical wisdom would protect Americans...
United by Our Differences: Electoral Politics in an Age of Choice
I can choose between 350 channels on my television, 170 stations on my satellite radio, 10,000 books at my local bookstore, and millions of websites on the Internet. But on my ballot I have only two real choices. I can vote for a Democrat or I can vote for a Republican. In an age when even ice es in 31 flavors, having only two choices in electoral politics seems anachronistic. But the limitation has an ironically beneficial effect. For as...
‘What else is there to aspire to be?’
The BBC visited Baton Rouge, specifically the most violent part of Baton Rouge. The reporter asked people who live there what they would change about America. It’s an insightful little piece of journalism. Several people mentioned the need for God and prayer. One young man who owns his own business credits his success with having a father who lived with him and raised him – something he says most of his peers didn’t have. One man, showing off his scars...
Video: Robert Murphy on The Importance of Sound Money
On Tuesday, Acton ed economist and author Robert P. Murphy to the Acton Building’s Mark Murray Auditorium as part of the 2014 Acton Lecture Series. He spoke on the topic of The Importance of Sound Money, providing a solid lesson in the history of currency in the United States and other major countries, and an overview of the problems that have resulted from our government’s abandonment of sound monetary policy. Murphy’s presentation is available for viewing below. ...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved