NCPA - National Center for Policy Analysis


January 11, 1996

The "poor" among us may not be all that poor. And there may not be all that many of them, according to a study by Bruce Bartlett, recently published by the American Enterprise Institute.

  • For instance, 93 percent of Americans living below the official poverty line owned at least one color TV.

  • Sixty percent owned microwave ovens and video cassette recorders, and 72 percent owned a washing machine.

  • In most instances, ownership of these appliances by poor Americans exceeds rates of ownership among the entire general populations of industrialized European countries.

Particularly startling is the fact that per-capita spending among the lowest 20 percent of income earners in the U.S. is about double their reported income.

Bartlett advances some explanations for this seeming anomaly:

  • Subsidized housing, food stamps and other forms of welfare are not counted as income in government statistics.

  • Some people with low reported income may be supported by family members or living off reserves accumulated earlier.

  • Perhaps the "off the books" underground economy is greater than previously imagined.

  • Also, about 37 percent of low-income Americans are elderly and have accumulated assets they can draw upon.

And since economists estimate that inflation as measured by the consumer price index has been overstated by about 1.5 percent per year since 1967, only 15 million people may live below the poverty line -- rather than the 38 million listed by the government.

Source: Perspective, "There's Money In Poverty," Investor's Business Daily, January 11, 1996.


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