Understanding Poverty in America
What the Census Bureau doesn't count when reporting on the "poor."


Robert Rector

How can the government spend so much and still have such high levels of apparent poverty? The answer is that, in measuring poverty and inequality, Census ignores almost the entire welfare state. Census deems a household poor if its income falls below federally specified levels. But in its regular measurements, Census counts only around 4 percent of total welfare spending as “income.” Because of this, government spending on the poor can expand almost infinitely without having any detectable impact on official poverty or inequality.

Also missing in most Washington discussions about the poor is an acknowledgement of the behavioral causes of official poverty. For example, families with children become poor primarily because of low levels of parental work and high levels of out-of-wedlock childbearing with accompanying single parenthood.

Even in the best economic times, the typical poor family with children has, on average, only 16 hours of work per week. Little work equals little income equals more poverty. Nearly two-thirds of poor children live in single-parent homes, a condition that has been promoted by the astonishing growth of out-of-wedlock childbearing in low-income communities. When the War on Poverty began, 7 percent of American children were born outside marriage; today the number is 39 percent.

President Obama is pursuing his agenda to “spread the wealth” through massive hikes in welfare spending financed by unprecedented increases in the federal debt. Before we further expand the welfare state and pile even greater indebtedness on our children, we need a more honest assessment of current anti-poverty spending and the actual living conditions of the “poor.”

– Robert Rector is a senior research fellow at the Heritage Foundation.