(2006-01-11) Economist Two Poverties

The Economist compares Poverty in the US and the Third World (Con Go). American poverty statistics are misleading. For one thing, the poor rarely stay that way (Income Mobility). In 1996-99, only 2% of Americans were poor every month over the full four-year period. And life appears, by most measures, to have improved. Poor people today live longer, spend longer in education and are more likely to have jobs. Fewer live in substandard houses, more have cars, fridges, boomboxes and other necessities that were luxuries a couple of generations ago. How, then, to account for the apparent rise in poverty? It is partly a matter of definition. Some non-cash benefits, such as Food Stamps, Housing Assistance and Medicaid, are excluded from the calculation. And the raw data must be wrong. Nicholas Eberstadt of the American Enterprise Institute, a conservative think-tank, notes that while reported annual income for the poorest fifth of households in 2003 was $8,201, their reported expenditure was $18,492. Nobody can explain this vast discrepancy.