Category: Poverty

lego-people“Can you explain that important economic concept using Legos?”

Apparently, someone must have said that to Richard Reeves, an economist at the Brookings Institution economist, because he’s made a brief video using Legos to visualize social mobility.

There are two reasons I really appreciate this video. First, I love to see important economic issues explained in an accessible and entertaining manner. Second, as I’ve repeatedly said to anyone who will listen, social mobility — specifically getting people out of poverty — is infinitely more important than focusing income inequality, a topic that gets far too much attention nowadays.

The one drawback to the video is that it’s far too pessimistic. Yes, social mobility is still a huge problem. But the video makes clear, that social mobility is possible for almost all people. That has not been true for most of human history and it is not true in most parts of the world today.

Also, I am far less concerned with whether a person can go from the bottom quintile to the top as I am with going from the bottom quintile to the middle. Like many Americans, I was born in the bottom quintile and worked my way to the middle quintiles. The fact that I’m unlikely to ever join the top quintile is of absolutely no importance to may life. None at all. What we should care about is whether people can get out of poverty and flourish economically, not whether they can join Beyonce and Jay-Z in the billionaire’s club.

But those quibbles aside, I’m grateful this video is helping to spread the message about the importance of social mobility.

girl bitting appleThe opening paragraphs of latest issue of Stanford University’s Pathways magazine contains an eye-opening claim: in any given month of 2011, 1.65 million U.S. households with children were living on less than $2 per person, per day.

That sounds horrific, and it is: horrifically misleading.

Once you dig deeper you find that what they mean is “households living on $2 or less in cash income per person per day.” The reason it is misleading is because, as a savvy economist might say, you don’t eat income.

What we mean (or should mean) when we say “living on” is consumption. In economics, consumption is the use of goods and services by households.

For at least the first few years of our lives (i.e., when we’re children), most of us have no incomes at all. So how do we keep from starving? Because what we “live on” (our share of consumption) is paid for by someone else’s income, usually our parents. Americans in extreme poverty are also able to consume using someone else’s income: their fellow taxpayers. This is why the poor can have near zero income and still have access to many of the goods and services, such as housing and food, required for survival.

As Jordan Weissmann notes, the Stanford article “ignored all non-cash safety net benefits.”

Earlier this month, I wrote a two part article for the Library of Law & Liberty, critiquing the uncritical condemnation of income inequality by world religious leaders.

In part 1, I pointed out that “while the Pope, the Patriarch, the Dalai Lama, and others are right about the increase in [global income] inequality, they are wrong to conclude that this causes global poverty—the latter is demonstrably on the decline. And that, I would add, is a good thing.”

F. A. Hayek

In part 2, drawing on the work of F. A. Hayek, I noted, “As societies learn to use their resources ‘more effectively and for new purposes,’ the cost of manufacturing luxury goods decreases, making them affordable to new markets of the middle class and, eventually, even for the poor.” I continue, “Such inequality not only accompanies the very economic progress that lifts the poor out of poverty, it is one essential factor that makes that progress possible.”

We may add to this two more ways in which focusing solely on income inequality can be misleading from article in the Wall Street Journal yesterday by Nicholas Eberstadt: increased equality in lifespan and education. He writes,

Given the close correspondence between life expectancy and the Gini index for age at death, we can be confident that the world-wide explosion in life expectancy over the past century has been accompanied by a monumental narrowing of world-wide differences in length of life. When a population’s life expectancy rises from 30 to 70, the Gini index drops by almost two-thirds—from well over 0.5 to well under 0.2.

This survival revolution—and the narrowing of inequalities in humanity’s life chances—is an epochal advance in the human condition. Since healthy life expectancy seems to track closely with overall life expectancy, a revolutionary reduction in health inequality may also have occurred over the past century. Improvements in global mortality for the poor have contributed to the very “economic inequality” so many now decry. This is another reason such measures can be deceiving.

The spread and distribution of education has had a similar impact. In 1950 roughly half of the world’s adults—and the overwhelming majority of the men and women from low-income regions—had never been exposed to schooling. By 2010 unschooled men and women 15 and older account for a mere one-seventh of the world’s adults, and about one-in-six from developing areas. (more…)

union-jack-flag-great-britain-x-nature-with-uk-for-2685143At the height of power, circa 1922, the British Empire was the largest empire in history, covering one-fifth of the world’s population and almost a quarter of the earth’s total land area. Yet almost one hundred years later, Great Britain is not so great, having lost much of its previous economic and political dominance. In fact, if Great Britain were to join the United States, it’d be poorer than any of the other 50 states — including our poorest state, Mississippi.

Fraser Nelson discovered that fact by using a “fairly straightforward calculation” (see the end of this article for an explanation, and what Nelson missed). The result, as Nelson explains, is that all but one income group in America is better off than the same group in Britain:

Bruton_Church,_WilliamsburgThis summer I made a visit to Colonial Williamsburg in Virginia, and on a tour of churches, I heard a fascinating explanation of how society functioned when the church was the place where the poor had their material needs met, not the government. The Bruton Parish Church in Williamsburg is one example.

According to church records, Burton Parish formed in 1674 following the merger of several colonial parishes originating as far back as 1633. As a Church of England congregation, this Anglican parish church was the center of life and culture. For example, during the era of the American Revolution men like George Washington, Thomas Jefferson, and Patrick Henry attended the church. Not only did prominent people in politics attend the parish church, the church also served the central location for providing social services for the poor.

In 17th and 18th century Williamsburg, Virginia helping the poor was assumed, as a social norm, to be the responsibility of the church, not the state. In the Bruton Parish, the vestrymen, in addition to managing the affairs of he parish, were responsible for all poverty related social services. In the Anglican church, the vestry was established as a committee elected in local congregations to work with the wardens of the church to meet various needs. During the colonial era, if a person did not have adequate housing, adequate food or clothing, if women were widowed and children were orphaned, and so on, it was simply an assumption that the church would meet the needs of those on the margins locally and personally.

police-povertyI’m about to make a prediction that is incontrovertible — a claim that cannot be controverted because (a) I am absolutely right in my prediction, and (b) because I will be long dead before my rightness can be proven.

Here’s what I predict: By the year 2114 social scientists will have established with 90 percent confidence that the “root cause” of the majority of the social maladies we experienced in the early twenty-first century (i.e., right now) were attributable to family structure, family dynamics, or family culture.

A trend in that direction appears to already be underway. Consider, for example, research recently published in the British Journal of Psychiatry that studied more than half a million children born in Sweden between 1989 and 1993. The results of the study showed that children of parents in the lowest income quintile experienced an increased risk of being convicted of violent criminality and substance abuse compared with peers in the highest quintile. No real surprise there. What was unexpected was the conclusion: “There were no associations between childhood family income and subsequent violent criminality and substance misuse once we had adjusted for unobserved familial risk factors.”

Blog author: jcarter
Thursday, August 21, 2014

7figuresFeeding America is a nationwide network of 200 member food banks, the largest domestic hunger-relief charity in the United States. The Feeding America network of food banks provides food assistance to an estimated 46.5 million Americans in need each year, including 12 million children and 7 million seniors.

The report “Hunger in America” is Feeding America’s series of quadrennial studies that provide comprehensive demographic profiles of people seeking food assistance through the charitable sector.

Here are seven figures you should know from the latest report: