Poverty

Don't Believe Bernie Sanders' Claims About Child Poverty in America

New research shows that income surveys erroneously categorized some households as extremely poor actually had "net worth in the millions" of dollars.

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Claims that millions of Americans are mired in extreme poverty, barely surviving on $2 or $4 a day, are false, according to a new working paper from the National Bureau of Economic Research.

The paper, released June 3, is by Bruce Meyer, Derek Wu, and Victoria Mooers of the Harris School of Public Policy at the University of Chicago and by Carla Medalia of the U.S. Census Bureau. Some households that income surveys erroneously categorized as extremely poor actually had "net worth in the millions" of dollars, the authors found.

The discrepancy between what people tell government survey-takers that they earn and how much money these same respondents actually make or have may seem like an arcane statistical argument. But the new research comes at a moment when poverty is an issue in the presidential campaign. The academic quarrel about the scope and severity of the poverty problem could find its way into the campaign and shape voters' views.

On Sunday, a Democratic presidential candidate, Bernie Sanders, published a New York Times opinion piece claiming that "millions of workers earn starvation wages" and that "today our rate of childhood poverty is among the highest of any developed country in the world."

As is often the case, the politicians are parroting the professors. The new NBER paper takes aim at a Nobel laureate in economics, Angus Deaton, who claimed that 5.3 million Americans in 2015 were living on less than $4 a day. It also criticizes work by a professor at Johns Hopkins, Kathryn Edin, and by a professor at the University of Michigan, H. Luke Shaefer. Edin and Shaefer are authors of a book, "$2.00 a Day: Living on Almost Nothing in America," that claimed about 3 million children lived in households with incomes of $2 a day or less.

"We find that 92% of the households categorized as extreme poor based on survey-reported cash income are misclassified," Meyer and his coauthors write. "Many of the households included in survey-reported extreme poverty appear to be better off than the average American household based on numerous indicators of material well-being."

Rather than millions of extremely poor American children, Meyer and his co-authors found the 285,000 households in "extreme poverty" were either single individuals or "households with multiple childless individuals."

They write, "this result likes in stark contrast to the focus in academic and policy circles on the plight of extreme poor households with children."

They write that "the errors in the income level exaggerate the level of extreme poverty."

The paper is titled "The Use and Misuse of Income Data and Extreme Poverty in the United States." To research it, the authors checked the income data reported by participants to survey-takers against administrative records from the Internal Revenue Service, the Social Security Administration, and state agencies.

It's difficult to be poor even at income levels above $4 a day. And if extreme poverty is rare for American children, it's the result in part of both government programs and voluntary, family- or community-based assistance. Whatever the imperfections in terms of unintended consequences, these programs do important work in helping ameliorate the circumstances of those, especially children, suffering from poverty.

To win public support for new programs to lift people out of poverty or to ease the plight of those who have fallen into it, though, exaggerating the problem may be counterproductive. It erodes credibility. If a politician or professor can't be trusted to describe the problem, why would they be trusted about a solution?

And, as the authors of this new study point out, more accurate data can help prevent miscast blame. It's unlikely, for example, that the time limits and work requirements of the 1996 welfare reform are responsible for any increase in extreme poverty, because the federal welfare program affected by that reform, Aid to Families With Dependent Children or Temporary Assistance for Needy Families, is aimed at families rather than at childless singles.

No one's claiming that poor people do not exist. But to help them out, it'd be useful to have an accurate picture of the situation rather than an exaggerated one.

Maybe Senator Sanders will ask The New York Times to run a correction to his op-ed piece.

Ira Stoll is editor of FutureOfCapitalism.com and author of JFK, Conservative.

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  1. Don’t Believe Bernie Sanders Claims About Child Poverty in America

    FTFY

  2. “The new NBER paper takes aim at a Nobel laureate in economics, Angus Deaton, who claimed that 5.3 million Americans in 2015 were living on less than $4 a day.”

    This statistic should have raised a red flag right away. 2015 was during the Obama years, and everyone knows he personally created the strongest economy in American history. No way that many people could have been that desperate.

    On the other hand I wouldn’t be surprised if 5, 10, or even 50 million Americans are living on less than $4 per day during the #DrumpfRecession.

      1. Admittedly I don’t explain economic issues as well as Palin’s Buttplug does.

        1. You recovered with an A+ for extra credit.

    1. It’s true. I personally have lost over a trillion dollars in the stock market due to the tax bill alone. And the body count from the tax bill has surpassed the entire population of the US.

  3. Wait. What?
    A socialist lied to get elected?
    Next thing, you will tell me the sun rises in the east.

  4. Some households that income surveys erroneously categorized as extremely poor actually had “net worth in the millions” of dollars, the authors found.

    Once Bernie gets his social programs in place, a million dollars will be worth about 4 dollars, so it all works out.

  5. Claims that millions of Americans are mired in extreme poverty, barely surviving on $2 or $4 a day, are false, according to a new working paper from the National Bureau of Economic Research.

    I don’t need a high falutin’ “paper” to know that’s utterly false.

    1. You can earn more than that selling your blood… so I’m gonna have to agree.

    2. From what I can find, a single person can get more than $4/day in food stamps. If anyone is living on < $4/day, it's a choice they make.

    3. $2 a day? $750 a year? Begging on the street is far more lucrative than that. Even minimum wage will give you $14,500. A number so far above their line that it seems absurd.

      To get that level, you would have to be essentially completely unemployed.

  6. “Maybe Senator Sanders will ask The New York Times to run a correction to his op-ed piece.”

    I’m guessing no. Has he ever done that before? Not a rhetorical question…

  7. Bernie Sanders – Choice of shoes and deodorant are to blame for children starving

    https://www.youtube.com/watch?v=G8hAJ2IdNDE

    1. Sanders: “It was a good thing there were bread lines in Soviet Russian because that meant people were getting food.”

      See where this is going? The government, and only the government will provide. Something about from each according to his ability….to each according to their needs.

  8. “To win public support for new programs to lift people out of poverty or to ease the plight of those who have fallen into it, though, exaggerating the problem may be counterproductive. It erodes credibility. If a politician or professor can’t be trusted to describe the problem, why would they be trusted about a solution?”

    Seriously? Credibility? What has anybody among our political leadership done – ever – that leads you to think that any of them understand the concept of credibility? Or give a shit about it?

  9. So;

    “millions of workers earn starvation wages”

    is just another manufactured problem for the liberals to save us from.

  10. LOL

    You average more than that by getting on literally any given welfare program… Of which there are many. I’ve seen estimates that unemployed people on welfare can make anything from $30 something grand a year up to almost $70K a year just from various welfare programs, the higher end of that being people who have kids.

    So, I doubt ANYBODY makes it on a couple bucks a day given those freebies. But even if they did they could literally go pan handle for like an hour and get more than that pretty much anywhere in America.

    Such a bunch of nonsense.

    1. Yet it somehow passed peer review. I wonder if I can get a paper published about how brown cows make chocolate milk.

  11. “If a politician or professor can’t be trusted to describe the problem…”

    Aren’t you adorable?

  12. And if extreme poverty is rare for American children, it’s the result in part of both government programs and voluntary, family- or community-based assistance

    I call BS. We have low extreme poverty because we are a rich country. We are a rich country because for most of our history we’ve had mostly free markets.

    Bernie wants to change that to garner greater rewards for being a politician. We need to oppose that so that greater rewards go to those providing the best services to a truly free market.

  13. Comrade Bernie employs hyperbole as a tool to extort more money from the American workers so he can launch his “Grand People’s Revolution” in which we will all be his slaves, and he and his cronies will make a ton of money just like his pals in Cuba have done down through the decades and his best buds in Venezuela are doing now.
    Socialism for Comrade Bernie and his acolytes is not for them. Socialism is for the masses, and capitalism is for the ruling elitist filth running (and ruining) their countries.

  14. If Bernie tells me the Sun is setting, I still look out a west-facing window to confirm it.

  15. […] Don’t Believe Bernie Sanders’ Claims About Child Poverty in America Ira Stoll, Reason […]

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