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The fact that this causes poverty is simply tautological. Poverty is defined as a lack of market income + certain cash benefits. Once a person is unable to work

The fact that this causes poverty is simply tautological. Poverty is defined as a lack of market income + certain cash benefits. Once a person is unable to work they will become poor regardless of transfer programs or how high their consumption is. The way to fix this is to measure poverty by consumption rather than income, but this is unpopular since it would reveal how little poverty really exists (eliminating an axe that politicians love to grind). http://freakonomics.com/2011/09/14/whats-the-best-way-to-measure-poverty-income-or-consumption/ http://freakonomics.com/2011/09/14/whats-the-best-way-to-mea...

makomk 11y ago
Hang on a moment - according to the fine print, their income figures includes "the net return on housing equity". Why the hell would you include that in a supposedly consumption-based measure of poverty? It's not actual income that you can use to buy anything, the only way to access it is by selling your home which you need to live in.
- yummyfajitas 11y ago
  The alternate income measures include net return on housing equity, not the consumption measure. Net return on housing equity is income that you can use to buy stuff with - for example, housing in a cheaper location + other stuff. Living in an expensive locale is a consumption choice.
  - makomk 11y ago
    The expensive areas are expensive because that's where all the jobs, services, good schools etc are. Counting an increase in the cost of those areas as a reduction in poverty is bizarre and perverse - it means that you're counting people as better off because it costs more to access jobs and education.
    - yummyfajitas 11y ago
      Suppose the good jobs and services left while the schools went to crap (aka Detroit). Wouldn't people be worse off? Would this be a reduction in poverty? When someone's home equity has appreciated, they are now living in a more valuable place than they were to start, but they don't have to pay for this. That's income.
      - makomk 11y ago
        Yes, they would be worse off. Now suppose the good jobs and services left from a huge swathe of the country and continued to do so, forcing people to move to a smaller number of more expensive urban areas if they wanted work. Since there's only a limited amount of land area, this would force up prices in those urban areas, making people worse off in real terms as they were forced to pour more of their income into a smaller house and had less to spend on everything else, but would show up as a decrease in poverty as their expensive house got more expensive. (And of course schools and services will cost more to run.) This is pretty much what's been happening worldwide, from what I've seen. The idea of treating appreciation in home equity as income is broken, because it means that this kind of mass urbanization and consolidation appears to be an increase in income when in fact it causes a reduction in real income.
coldtea 11y ago
>The fact that this causes poverty is simply tautological. Poverty is defined as a lack of market income + certain cash benefits. Once a person is unable to work they will become poor regardless of transfer programs or how high their consumption is. Not in any place were welfare covers those costs. There are people unable to work for life (e.g. severily injured) that still get a special pension instead of getting thrown to the streets to be homeless. And we're not talking about "unable to work forever" either. I've had hard working friends in the united states who blew all their pension savings because of some urgent need for a few months of hospital care or some surgery. This should just not happen (and it doesn't in other places in the West). >The way to fix this is to measure poverty by consumption rather than income, but this is unpopular since it would reveal how little poverty really exists How about you try lowering your personal consumption to the levels you find acceptable for the "non poor", and tell us how it feels? Or, try working 2 jobs to support a child as a single mother, and tell us all about the great cushy living these people have... http://www.amazon.com/Nickel-Dimed-Not-Getting-America/dp/0312626681 http://www.amazon.com/Nickel-Dimed-Not-Getting-America/dp/03... This idea, that poverty is some absolute value, and we should be thankful that we don't have to eat from garbage bins or live in caves really needs the Ole Yeller treatment...
- yummyfajitas 11y ago
  The US has welfare which covers the things you describe - this is excluded from the poverty measure. You could provide $1MM/year in in-kind benefits (servants, an estate, you name it) but you wouldn't decrease poverty (as defined by the US govt) at all. I have lowered my personal consumption to US poverty levels (<$20k/year) while living in homeless shelter like conditions (minus the homeless people, aka youth hostels). In fact i enjoy it so much that I'm checking into one tonight; hello Singapore! The idea that poverty is not some absolute value is kind of crazy - if we solve all this kid's current problems but give other people flying cars and robots (maintaining his relative position), will he still be unable to finish school? Also, why do you bring up a highly non-representative example (a person working full time) to personify poverty? Why not choose a far more representative person, like someone not working at all or even seeking work?http://www.epi.org/publication/poor-people-work-a-majority-of-poor-people-who-can-work-do/ http://www.epi.org/publication/poor-people-work-a-majority-o... http://www.bls.gov/opub/reports/cps/a-profile-of-the-working-poor-2013.pdf http://www.bls.gov/opub/reports/cps/a-profile-of-the-working...

makomk 11y ago

Hang on a moment - according to the fine print, their income figures includes "the net return on housing equity". Why the hell would you include that in a supposedly consumption-based measure of poverty? It's not actual income that you can use to buy anything, the only way to access it is by selling your home which you need to live in.

yummyfajitas 11y ago
The alternate income measures include net return on housing equity, not the consumption measure. Net return on housing equity is income that you can use to buy stuff with - for example, housing in a cheaper location + other stuff. Living in an expensive locale is a consumption choice.
- makomk 11y ago
  The expensive areas are expensive because that's where all the jobs, services, good schools etc are. Counting an increase in the cost of those areas as a reduction in poverty is bizarre and perverse - it means that you're counting people as better off because it costs more to access jobs and education.
  - yummyfajitas 11y ago
    Suppose the good jobs and services left while the schools went to crap (aka Detroit). Wouldn't people be worse off? Would this be a reduction in poverty? When someone's home equity has appreciated, they are now living in a more valuable place than they were to start, but they don't have to pay for this. That's income.
    - makomk 11y ago
      Yes, they would be worse off. Now suppose the good jobs and services left from a huge swathe of the country and continued to do so, forcing people to move to a smaller number of more expensive urban areas if they wanted work. Since there's only a limited amount of land area, this would force up prices in those urban areas, making people worse off in real terms as they were forced to pour more of their income into a smaller house and had less to spend on everything else, but would show up as a decrease in poverty as their expensive house got more expensive. (And of course schools and services will cost more to run.) This is pretty much what's been happening worldwide, from what I've seen. The idea of treating appreciation in home equity as income is broken, because it means that this kind of mass urbanization and consolidation appears to be an increase in income when in fact it causes a reduction in real income.

coldtea 11y ago

>The fact that this causes poverty is simply tautological. Poverty is defined as a lack of market income + certain cash benefits. Once a person is unable to work they will become poor regardless of transfer programs or how high their consumption is. Not in any place were welfare covers those costs. There are people unable to work for life (e.g. severily injured) that still get a special pension instead of getting thrown to the streets to be homeless. And we're not talking about "unable to work forever" either. I've had hard working friends in the united states who blew all their pension savings because of some urgent need for a few months of hospital care or some surgery. This should just not happen (and it doesn't in other places in the West). >The way to fix this is to measure poverty by consumption rather than income, but this is unpopular since it would reveal how little poverty really exists How about you try lowering your personal consumption to the levels you find acceptable for the "non poor", and tell us how it feels? Or, try working 2 jobs to support a child as a single mother, and tell us all about the great cushy living these people have... http://www.amazon.com/Nickel-Dimed-Not-Getting-America/dp/0312626681 http://www.amazon.com/Nickel-Dimed-Not-Getting-America/dp/03... This idea, that poverty is some absolute value, and we should be thankful that we don't have to eat from garbage bins or live in caves really needs the Ole Yeller treatment...

yummyfajitas 11y ago
The US has welfare which covers the things you describe - this is excluded from the poverty measure. You could provide $1MM/year in in-kind benefits (servants, an estate, you name it) but you wouldn't decrease poverty (as defined by the US govt) at all. I have lowered my personal consumption to US poverty levels (<$20k/year) while living in homeless shelter like conditions (minus the homeless people, aka youth hostels). In fact i enjoy it so much that I'm checking into one tonight; hello Singapore! The idea that poverty is not some absolute value is kind of crazy - if we solve all this kid's current problems but give other people flying cars and robots (maintaining his relative position), will he still be unable to finish school? Also, why do you bring up a highly non-representative example (a person working full time) to personify poverty? Why not choose a far more representative person, like someone not working at all or even seeking work?http://www.epi.org/publication/poor-people-work-a-majority-of-poor-people-who-can-work-do/ http://www.epi.org/publication/poor-people-work-a-majority-o... http://www.bls.gov/opub/reports/cps/a-profile-of-the-working-poor-2013.pdf http://www.bls.gov/opub/reports/cps/a-profile-of-the-working...