Tag Archives: absolute poverty

Americans in poverty have electronics, showing how ubiquitous they are

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This article is intended to suggest that Americans in poverty don’t have it that bad because of the items they have in their home. I would argue for a different interpretation: this shows how common and relatively cheap these consumer goods are.

American poverty just ain’t what it used to be. A new report from the Census Bureau found that 80.9% of households considered poverty stricken have cell phones along with their landline phones, and 58.2% have computers. 96.1% of those in “poverty” have televisions, and 83% have some sort of DVR.

The percentage owning refrigerators? 97.8%

Gas or electric stoves? 96.6%.

Microwaves? 93.2%

Air conditioning? Over 83%.

Washer? 68.7%

Dryer? 65.3%

Having these items is simply part of modern living. The adoption rate for new devices rises much more quickly today than it did a century ago. Take cell phones as an example. Here is one description about how quickly they spread in the United States:

Just a quick note for your next PowerPoint deck on megatrends: more than 90 percent of adults now have a cell phone, according to the Pew Research Center’s Internet & American Life Project. For people under the age of 44, that number is closer to 97 percent.

Pew calls the cell phone the fastest-adopted device in history. These things are subject to some variability because of when we start the clock, but the cellphone adoption rate is certainly up there with the radio and color TV, and far faster than computers or landline telephones.

Additionally, there is an important difference between absolute poverty and relative poverty. Sure, poverty in the United States doesn’t look like the most desperate poverty in the world but that doesn’t mean there aren’t clear differences and disadvantages between those with lower incomes and wealth than those with more.

Deciding who is really rich

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As the American government considers changes to the tax brackets, James Surowiecki of the New Yorker says this involves an important question: how much money does one have to make to be rich?

While the administration has suggested being rich starts at $200,000 income per year, Surowiecki describes why it is not so simple:

Judging from surveys of how Americans describe themselves, most of the privileged don’t feel all that privileged. Why is that? One reason is the American mythology of middle-classness. Another is geography: in a place like Manhattan, where the average apartment sells for nine hundred thousand dollars, your money doesn’t go as far. And then there’s a larger truth about how wealth is getting concentrated in this country. As the economists Thomas Piketty and Emmanuel Saez have documented, people who earn a few hundred thousand dollars a year have done much worse than people at the very top of the ladder.

Indeed, wealth and income is often relative: if you made $150,000 a year but lived in a neighborhood and mainly associated with people who made around $1,000,000 a year, you might feel poor. The same concept is used to describe various levels of poverty: the relative poverty of the United States versus the absolute poverty experienced in Third World nations. Americans are notorious for feeling like they are middle-class, even if they clearly are not.

At the same time, I find it slightly difficult to believe that $200,000 doesn’t make one rich. Of course, one has choices about how to spend that money. Making $200,000 in Manhattan is not the same as the making that money in Nebraska. However, it should cover all of one’s expenses. Those making over $200,000 are still part of a small and elite group: according to the Census Bureau, in 2006 3.5% of American households made over $200,000 a year.

Surowiecki suggests the solution is to create separate tax brackets for the rich and “super-rich.” If the tax rates are changed, this seems reasonable to me – though it complicates the tax code.