The New York Times is out with another lengthy article in which it details figures from the Bureau of the Census that describe the number of American households with income at less than 50% above the poverty level. this is not a regular statistic from the Census Bureau; it was created at the specific request of the New York Times according to the article. what the article reports is that according to the Census, there are just under 100 million people in this category, a category that the Times calls the "Near Poor".
The truth, however, is that the whole article presents a distorted picture of American society. Many of these folks are nowhere near poor. First, the measure used does not consider wealth, only income. In other words, if a family owns its own home, that wealth is not considered. If a family has $200,000 invested in certificates of deposit at a bank at the interest rate of 0.5% (not bad these days) so that it earns $1000 per year in interest, only the earnings are considered, not the wealth. If a person has an IRA with $1 million in it but is now semi retired and living on a part time job and savings, that person is counted by the Times as near poor; the million in the IRA is ignored. There is simply no way to tell from the Times how many people fall within categories like these. Even the Times, however, admits that fully 20% of the near poor own their own homes mortgage free; that is at least 10 million households in that category.
Second, the point about American income levels has always been that the overwhelming majority (like 85%) of the folks have incomes bunched together in the middle of the range. The truth here is not that there are 100 million people who are almost destitute, but rather that the so-called poverty level is high enough that it comes relatively close to the median standard of living. In other words, the truth is that most of the poor are able to live a decent life close to that of the rest of America. the truth is not that one third of America is destitute.
Third, another important point about this group of so-called near poor is that its membership is constantly changing. Folks who lost their jobs at the start of the recession and have not found new jobs are likely members of the group. This is the case even for those people who were in the upper half of the income spectrum before the recession. Some who find work again in their field will immediately move back out of this group.
Fourth, the figures calculated in the way the Times wanted counts census households that fall in the near poor income group. I assume that the Time knows that census households include college students separate from their parents. That's right, if a student lives in an apartment near the campus and has all his or her expenses paid for by Mom and Dad, that student -- who has no income -- still counts as a household living in near poverty. that means that there are millions of additional "near poor" households under the Times' definition just from college students.
I do not mean to minimize the problem of poverty in this country. I am only pointing out that the NY Times has gotten the census bureau to put out statistics that maximize the number of people in that category. Then the Times ignores the accumulated wealth of these folks and the distortions with college students and announces that these folks are "near poor". Not quite!
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