I have strong opinions. You probably do, too. Most people have deeply felt convictions about at least some matters of public controversy. Given the right context, most are willing to express their views to others and debate their disagreements.
How do we form our opinions? When we are children, our parents, teachers and other authority figures help to shape our perceptions of how the world works — or should work. As we get older, our own experiences begin to influence our views, on issues for which those experiences are relevant. For many political or policy controversies, however, none of us is likely to have enough direct personal experience to form a strong opinion. So we end up relying on information and analysis provided to us by politicians, interest groups, authors and the news media.
Human beings aren’t computers. We don’t simply take in data and spit out conclusions. We often interpret the data according to our preconceived notions, even when we try to be open-minded and dispassionate. Nevertheless, over time the information we digest can influence how we think. It can lead us to modify or completely change our opinions.
Please allow me to demonstrate. I’m going to make a controversial claim, support it with evidence, and then ask whether the claim might change your opinion about public policy. Here’s the claim: Poverty in America has declined dramatically over the past half-century.
I know you’ve heard a different story, from both sides of the political fence. They tell you that the average poverty rate is currently in the mid-teens — little changed from where it was a decade ago, two decades ago, or even further back in time. Liberals say this stagnation in progress against poverty proves that the welfare reforms of the 1990s were wrongheaded and that governments at all levels should spend more on social programs. Conservatives say this stagnation in progress against poverty proves that such social programs are ineffective, that we already spend many billions of dollars a year and get little return.
The problem here is that the official “poverty rate” statistics are bunk. They’ve been bunk ever since they were created. The question of whether an individual or family lives below a poverty threshold can only be answered by identifying and counting all the money, goods and services received by that household — from paid work, extended family, charity, and government programs. And the question of whether poverty rates are going up, down, or sideways over time can only be answered by using a valid adjustment for changes in the real cost of goods and services.
The official poverty rate does neither of these things. If you gave everyone in the country free health care (through Medicaid, for example) and free housing (through public projects or vouchers), it wouldn’t change the measured poverty rate at all, because these programs don’t distribute cash. As for inflation, standard measures such as the Consumer Price Index are known to overstate real price changes, in part because they don’t adequately adjust for the rising quality of products (think about how much more useful a smart phone is today than a mobile or landline phone was in the past).
University of Chicago economist Bruce Meyer and Notre Dame economist James Sullivan have spent years working on alternative poverty measurements that take these factors in account. They focus on household consumption of goods and services, not reported income, and employ better inflation measures.
According to their analysis, published by the left-leaning Brookings Institution, as well as academic journals, America’s true poverty rate was about 31 percent in 1962. Today, it’s about 5 percent. The most rapid improvement came early, as the rate dropped about 14 percentage points from 1962 to 1972. But gains continued through the 1970s, 1980s, 1990s, and 2000s.
Assume for the sake of argument that Meyer and Sullivan are correct. Do these facts affect your view about the extent of poverty today, or what local, state, and federal governments ought to do about it? If not, why not?
John Hood is chairman of the John Locke Foundation.