Monday, June 4, 2007

What does American Poverty Look Like?

Poverty will always be with us. But today's poor look surprisingly different than their brethren from just a generation ago. In relative terms, every wealth distribution is going to have someone who is poorer than average, although that person might be quite wealthy in absolute terms. For example, a millionaire in a room full of billionaires might be a wealth lightweight in his immediate community, but the case for calling him or her truly poor seems pretty weak.

The average person below the poverty line in the United States today owns a microwave, a color television, gets cable, and a car. None of these assets are going to be top of the line, but when they break they will get replaced - and possibly long before then.

There are actually more obese Americans living in poverty today than in the general population. Some might consider this a triumph of food distribution, but others consider it just the absence of affordable gym access. Healthy food does cost more than junk food, but a cheaper way to avoid getting fat is to simply eat less junk food.

The plight of the poor is always highlighted around the holidays, but very rarely is it contrasted with the plight of the rich in poor countries. Consider the average Latin American. Would he or she rather have more wealth than 90% of the population in his or her country or be poorer than 90% of Americans? The answer may surprise you. In terms of absolute wealth measured by purchasing power parity, the two amounts aren't even close. The poor in America are significantly wealthier than not just the vast majority of people who have ever lived, they are much better off than the relatively wealthy in poor countries.

For lots of reasons, it is always going to be difficult to be at the bottom of the ladder. Yet for poor Americans today, being poor has never been better - and the future looks fine.

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