Center for Business and Economic Research - Ball State University


CBER Data Center
Projects and PublicationsEconomic IndicatorsWeekly CommentaryCommunity Asset InventoryManufacturing Scorecard

About

Commentaries are published weekly and distributed through the Indianapolis Business Journal and many other print and online publications. Disclaimer

RSS Feed

Disclaimer

The views expressed in these commentaries do not reflect those of Ball State University or the Center for Business and Economic Research.

Recent

Two Key Economic Lessons in One BillHoosiers face trade-offs and opportunity costs in the wake of SEA1.

Time to Fix Economic Development PolicyAllocating tax dollars to land development won’t cause economic growth.

The Unanticipated Effects of SB1Businesses, governments and households may all feel the effects.

The Stupidest of PoliciesThis whipsawing of tariff rates has unnerved financial markets, which on Wednesday, were toying with a liquidity crisis.

View archives

Top Tags

jobs and employment 261
economics 201
state and local government 188
education 186
economic development 171
indiana 171
budget and spending 145
taxes 144
law and public policy 142
workforce and human capital 139
Browse all tags
Reporter / Admin Login

September 26, 2011

Defining and Understanding Poverty in America

Poverty and hunger in America have been much in the news in recent months. The economic conditions make this sadly expected, but I find the intense journalistic focus has done little to help us understand the issue. How much poverty we have and how bad it is remain elusive questions. The causes of poverty are, ironically, better known.

According the United Nations there is no poverty in America. This is because everywhere but America, poverty is defined by how much you consume, not how much you earn. So, an American man who is homeless throughout all of a year, but receives ten donated meals a week, 100 nights in a shelter, one free medical exam, a flu shot and a dollar a day panhandling is comfortably above the average consumption level of residents of India and sub-Saharan Africa. If he receives Medicaid, his standard of living jumps past the average Chinese citizen, along with about a half billion more Asians. Clearly the UN has a point, but satisfying their definitions of poverty is a lamentably low bar for this great nation. 

According the official US poverty statistics, we perpetually have something between 11 percent and 16 percent of the population living in poverty.  This has not changed since the start of the War on Poverty in 1964, and this is because our definition measures income inequality—a serious matter—not hunger or want.

A number of advocates for the poor claim that half of America’s children live with food insecurity (to quote a recent news article), and some advocacy groups claim one in five American kids go hungry each year. While this seems plausible, serious and documented research informs us that obesity is a growing health risk closely linked to poverty. While it is possible to be both hungry and fat (see accompanying photograph), the fix to this surely does not lie in more public assistance. Something different, in both understanding and approach to the issue are needed.

Poverty and want in America cannot be seriously addressed until we can develop a better metric. To do so we need to structure a measure of poverty that assesses what each person consumes, not what they earn—this is the essence of a recent recommendation by the National Academy of Sciences. This is critical, and (to exemplify the problem) it is worth noting that according to official statistics the three most impoverished places in Indiana are Bloomington, West Lafayette and Muncie. These may be places of low income but are not places where hunger and desperation loom (except after my evening class).

Measuring poverty well is not enough. We also have to realize that what we have done to remedy its grip is ineffective at best. The factors that propel and keep families poor are well known: substance abuse, quitting high school and teenage pregnancy. Sadly, poverty is not the result of economic problems, which would be a relatively easy fix. The real cause of poverty is embedded in bad decisions by teenagers, where earnest and effective remedies are few.

 

Link to this commentary: https://commentaries.cberdata.org/589/defining-and-understanding-poverty-in-america

Tags: inequality and poverty


About the Author

Michael Hicks cberdirector@bsu.edu

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. Note: The views expressed here are solely those of the author, and do not represent those of funders, associations, any entity of Ball State University, or its governing body.

© Center for Business and Economic Research, Ball State University

About Ball State CBER Data Center

Ball State CBER Data Center is one-stop shop for economic data including demographics, education, health, and social capital. Our easy-to-use, visual web tools offer data collection and analysis for grant writers, economic developers, policy makers, and the general public.

Ball State CBER Data Center (cberdata.org) is a product of the Center for Business and Economic Research at Ball State University. CBER's mission is to conduct relevant and timely public policy research on a wide range of economic issues affecting the state and nation. Learn more.

Terms of Service

Center for Business and Economic Research

Ball State University • Whitinger Business Building, room 149
2000 W. University Ave.
Muncie, IN 47306-0360
Phone:
765-285-5926
Email:
cber@bsu.edu
Website:
www.bsu.edu/cber
Facebook:
www.facebook.com/BallStateCBER
Twitter:
www.twitter.com/BallStateCBER
Close