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Saturday, September 02, 2006

Extreme Poverty and Extreme Stupidity

Brad DeLong hammers Mickey Kaus.

Mickey Kaus looks at this table:

Table 22. Number and Percent of People Below
50 Percent of Poverty Level: 1975 to 2005

Year Total Number Percent
2005...... 293,135 15,928 5.4
2004 14/.. 290,617 15,693 5.4
2003...... 287,699 15,264 5.3
2002...... 285,317 14,068 4.9
2001...... 281,475 13,440 4.8
2000 12/.. 278,944 12,592 4.5
1999 11/.. 276,208 12,887 4.7
1998...... 271,059 13,914 5.1
1997...... 268,480 14,594 5.4
1996...... 266,218 14,412 5.4
1995...... 263,733 13,892 5.3
1994...... 261,616 15,404 5.9
1993 10/.. 259,278 15,971 6.2
1992 9/... 256,549 15,547 6.1
1991 8/... 251,192 14,059 5.6
1990...... 248,644 12,914 5.2
1989...... 245,992 11,983 4.9
1988...... 243,530 12,676 5.2
1987 7/... 240,982 12,469 5.2
1986...... 238,554 12,677 5.3
1985...... 236,594 12,380 5.2
1984...... 233,816 12,770 5.5
1983 6/... 231,700 13,590 5.9
1982...... 229,412 12,806 5.6
1981 5/... 227,157 11,189 4.9
1980...... 225,027 9,804 4.4
1979 4/... 222,903 8,553 3.8
1978...... 215,656 7,708 3.6
1977...... 213,867 7,474 3.5
1976...... 212,303 7,016 3.3
1975...... 210,864 7,733 3.7

and catches Eric Alterman in a mistake:

Maybe Cocooning Is Easy!: Eric Alterman, in a post titled "Extreme Poverty is US," writes (quoting today's NYT poverty numbers story):

Again, moreover, "although the numbers living below the poverty line held steady between 2004 and 2005, there has been a sharp increase in those living in extreme poverty."

That's funny, because if you look at the Census numbers, they show... a jump of... well, zero from 2004 [in extreme poverty].... I contend that "zero" is not a "sharp increase."... Alterman... [is] quoting... NYT reporter Rick Lyman paraphrasing "advocates for the poor"--specifically Robert Greenstein, whose influential outfit (Center on Budget and Policy Priorities) specializes in devising esoteric measurements to suggest that good poverty news is really bad poverty news...

But what is the "good poverty news" in the Census Bureau's report? What is the "good poverty news" in this table?

Is it that there are more people in extreme poverty than in any year since 1993? Is it that the proportion of Americans in extreme poverty is greater than in any year since 1997? Is it that the extreme poverty rate is 0.9%--2,336,000 people--higher than in 2000, at the last business cycle peak?

[big snip]

Here's what Lyman reports from Bob Greenstein:

Census Reports Slight Increase in %u201905 Incomes - New York Times: advocates for the poor pointed out that, although the numbers living below the poverty line held steady between 2004 and 2005, there has been a sharp increase in those living in extreme poverty. The average person living in poverty actually earned $3,236 less than the poverty line -- $19,971 for a household of four -- in 2005, the highest such gap ever measured by the Census Bureau, said Robert Greenstein, executive director of the Center on Budget and Policy Priorities, a liberal research group. And 43 percent of the poor earned less than half of the poverty limit, Mr. Greenstein said, again the highest such percentage ever recorded.

"This is further evidence that the nation's economic recovery has had very limited reach, with many low- and medium-income families not sharing in the game," he said...

I think Brad is not nearly harsh enough.

The census BLS etc have a formal definition of "poverty" and of "extreme poverty" but that does not mean that everyone must use those words they way they do. Head count indices are very very crude and using two head counts not just one remains a very crude analysis.

The poverty gap statistic is a very useful addition to the pair poverty head count & extreme poverty head count. It is obviously not an "esoteric measurement" and, while I have great respect for the CBPP, I wouldn't guess that they were the first to come up with this obvious measurement.

I guess Kaus uses "esoteric" to mean "you can't look it up in an official document but actually have to do some arithmetic."

Since, the census does not have a copywrite or trademark on the orginary English words "extreme" and "poverty" anymore than Fox news has a trademark on "Fair" and "balanced", Alterman, Lyman, and Greenstein were not caught in an error. Their claim is perfectly reasonable. Lyman and Greenstein explain what they are saying clearly enough that Kaus's objection can only have been made in bad faith.

By the way there is extensive commentary on the effects of welfare reform based on the poverty rate (search for plumer on the blog). It is easy to get confused using the poverty rate. If the most pessimistic alarmist panicked terrified pants pissing forecaster of the effects of welfare reform (the paptppfewr) had been right, one would not expect an increase in the poverty rate, since AFDC benefits are too low to get a family over the poverty line.

Note that the extreme poverty news does not confirm the panic of the paptppfewr (me). He (I) was full of it, since the extreme poverty rate is the same as it was when welfare reform was introduced. This is a remarkable achievement given the late 90s boom, but things are not as bad as they look What has happened to the poverty gap ? I don't know and I should.

Also look at the 70's. What was St Jimmy doing to hammer the poor ? I think it is obvious that the reason for the huge increase in extreme poverty is the erosion of the real value of AFDC benefits (not indexed to inflation). In fact I would expect more action post 96 on the extremely extreme poverty rate or something, since AFDC was not enough in all states to get families over 50% of the poverty line.

Should I maybe be doing some arithmetic not dumping on Kaus ?

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