The Washington Post has a writeup of a new U.N. report claiming that 18.5 million Americans live in “extreme poverty,” as well as the administration’s response that the true number is just 250,000. The issue is confusing in a lot of ways, but the underlying problem is simple: The U.N. used a ridiculous definition of “extreme poverty.”
This issue came to the fore in the U.S. owing to the book $2 a Day, which claimed that 4 percent of families with kids, or 1.5 million households, were living on incredibly little cash — though many did receive other benefits such as food stamps. That definition of extreme poverty ($2 per person in the household) is quite similar to the one the World Bank uses to measure deprivation in the Third World.
The book’s claim has been challenged. Scott Winship has argued that extreme poverty is so rare in the U.S. as to be hard to measure; Jamie Hall and Robert Rector looked at consumer spending rather than income and found that virtually no households spend less than even $4 per person per day. (Hall and Rector’s analysis is the foundation of the administration’s 250,000 stat.) But both sides of the debate accept that “extreme poverty” is, well, truly extreme. That’s what makes it different from “deep poverty” or plain old “poverty” and why you need a separate term for it.
The U.N. report claims to talk about extreme poverty, but what it actually references is the Census Bureau’s measure of “deep poverty,” or half the poverty line. That’s several times higher than $2 a day (and this measure too neglects in-kind benefits such as food stamps). The report’s own number for Americans living in “Third World conditions of absolute poverty” — which I guess is beyond “extreme poverty” in this schema? — is 5.3 million, drawn from this analysis of $4-a-day poverty.
People in deep poverty are certainly not living high on the hog, and there is a legitimate debate over the true extent of extreme poverty. But we gain nothing from conflating these terms. The report is simply wrong that 18.5 million Americans are living in extreme poverty.