From the census bureau:
Living Conditions of the Poor in AmericaConsumption by Poor Families. Since the Census Bureau dramatically undercounts the actual incomes of the poor, it should be no surprise to find that the U.S. Department of Labor routinely reports that poor families spend $2.40 for every $1.00 of their reported income. If public housing benefits are added to the tally, the ratio of consumption to income rises to $2.60 for every $1.00. In other words, the “income” figures that the Census Bureau uses to calculate poverty dramatically undercount the economic resources available to lower-income households.
Amenities. Because the official Census poverty report undercounts welfare income, it fails to provide meaningful information about the actual living conditions of less affluent Americans. The government’s own data show that the actual living conditions of the more than 45 million people deemed “poor” by the Census Bureau differ greatly from popular conceptions of poverty. Consider these facts taken from various government reports:
- Eighty percent of poor households have air conditioning. By contrast, at the beginning of the War on Poverty, only about 12 percent of the entire U.S. population enjoyed air conditioning.
- Nearly three-quarters have a car or truck; 31 percent have two or more cars or trucks.
- Nearly two-thirds have cable or satellite television.
- Two-thirds have at least one DVD player, and a quarter have two or more.
- Half have a personal computer; one in seven has two or more computers.
- More than half of poor families with children have a video game system such as an Xbox or PlayStation.
- Forty-three percent have Internet access.
- Forty percent have a wide-screen plasma or LCD TV.
- A quarter have a digital video recorder system such as a TIVO.
- Ninety-two percent of poor households have a microwave.
Overall, 100 million individuals—nearly one in three Americans—received benefits from at least one of these programs. Federal and state governments spent $943 billion in 2013 on these programs at an average cost of $9,000 per recipient.
Today, government spends 16 times more, adjusting for inflation, on means-tested welfare or anti-poverty programs than it did when the War on Poverty started. But as welfare spending soared, the decline in poverty came to a grinding halt. As Chart 2 shows, the more the government spent, the less progress against poverty was made.
How can this paradox be explained? How can government spend $9,000 per recipient and have no apparent impact on poverty?