Monday, January 29, 2007

Addressing absolute poverty rather than relative poverty

Nathan Smith has an interesting essay at TCS contrasting Bush's State of the Union speech with Senator James Webb's Democratic answer.
While the president is interested in dealing with specific aspects of poverty and deprivation, he is not interested in the position of poor people relative to others. Senator Webb is. "When I graduated from college," remarks Senator Webb, "the average corporate CEO made 20 times what the average worker did; today, it¹s nearly 400 times." Or again, "Wages and salaries for our workers are at all-time lows as a percentage of national wealth." In each case, the statistic he cites is a ratio: the average worker's wages compared to those of the CEO; wages and salaries compared to national wealth. That the average worker is much wealthier in absolute terms than he was thirty years ago does not seem to interest Webb much: what matters is that his relative wealth has decreased.
Whether you agree or not that Bush's policy suggestions are the best ways to deal with the problems of the poor, Smith makes a strong case that those are whom Bush is targeting, even the poor abroad with his push for AIDS and malaria drugs for those in other countries experiencing epidemics from these diseases. Webb, however, focused on the contrast between the rich and others in our own country.
President Bush seeks to inspire altruism by encouraging Americans to compare themselves with those who have less:
"American foreign policy is more than a matter of war and diplomacy. Our work in the world is also based on a timeless truth: To whom much is given, much is required. We hear the call to take on the challenges of hunger and poverty and disease."
Sen. Webb, by contrast, encourages Americans to compare themselves to those who have more, and feel envy. Although Sen. Webb borrows John Edwards' "two nations" theme ("it's almost like we were living in two different countries"), unlike Edwards, Webb makes no mention of helping the poor. Sen. Webb's message is that "the middle class of this country, our historic backbone and our best hope for a strong society in the future, is losing its place at the table."
Webb made a strong play for those who are resentful that they don't make as much as rich CEO's. Personally, I don't care how much the CEO's make if I'm doing okay. And having studied the Gilded Age, I don't see any comparison between the condition of the poor today with those today whom Webb said were suffering under new robber barons. Has he ever seen pictures of the lives of the poor back then? Has he ever read descriptions? The comparison is ludicrous. Compare the pictures and descriptions from Jacob Riis and Lewis Hines that I linked to with this description of the average poor person in America today.
Most of America's "poor" live in material conditions that would be judged as comfortable or well-off just a few generations ago. Today, the expenditures per person of the lowest-income one-fifth (or quintile) of households equal those of the median American household in the early 1970s, after adjusting for inflation.

The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:
-Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

-Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.

-The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

-Nearly three-quarters of poor households own a car; 30 percent own two or more cars.

-Ninety-seven percent of poor households have a color television; over half own two or more color televisions.

-Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

-Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.
As a group, America's poor are far from being chronically undernourished. The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children and, in most cases, is well above recommended norms.
If we're talking absolute conditions of living, the poor today are relatively rich to the poor of a generation or two ago. It is just in the contrast to those who are truly wealthy, hmmm, think John Edwards in his new digs, that we can feel the lack. But unlike Senator Webb, it doesn't bother me, except for the hypocrisy, that Senator Edwards and his family have a house with 28,200 sq. feet of living space. I'm more concerned about my absolute situation than my relative situation compared to the CEOs that he is so worried about.

Link from Michael Barone who points out,
An effective CEO can increase a company's market cap hugely (see Jack Welch) and so is worth the money. Question for Jim Webb: Assuming it's true that the ratio of National Basketball Association player pay to NBA fan pay has increased vastly over the last 40 years (I would think it has but haven't bothered to look up the numbers), does this mean that NBA fans are worse off?