Consumerism, Poverty, and Economic Mobility

There is an article from the New York Times that points to a distinction made before. It is “Changed Life of the Poor: Better Off, but Far Behind” by Annie Lowrey. The author also includes a nifty graph that starkly portrays the data, which should definitely check out.

She begins with an observation that many on the right have brought up to question that poverty is a real issue.

“Is a family with a car in the driveway, a flat-screen television and a computer with an Internet connection poor?

“Americans — even many of the poorest — enjoy a level of material abundance unthinkable just a generation or two ago. That indisputable economic fact has become a subject of bitter political debate this year, half a century after President Lyndon B. Johnson declared a war on poverty.”

In a consumerist society, wealth is defined as access to consumer products. Is that actual wealth in any meaningful sense?

“Indeed, despite improved living standards, the poor have fallen further behind the middle class and the affluent in both income and consumption. The same global economic trends that have helped drive down the price of most goods also have limited the well-paying industrial jobs once available to a huge swath of working Americans. And the cost of many services crucial to escaping poverty — including education, health care and child care — has soared.”

From the perspective of the poor, consumer products don’t likely make them feel all that wealthy. The poor are struggling today, just as they did in the past.

“For many working poor families, the most apt description of their finances and lifestyle might be fragile. Even with a steady paycheck, keeping the bills paid becomes a high-wire act and saving an impossibility.”

Not just struggling, but living on the edge. They aren’t faced with mere poverty. They also have to fear life getting much worse, such as losing their homes and not being able to keep food on the table.

“Two broad trends account for much of the change in poor families’ consumption over the past generation: federal programs and falling prices.”

More federal programs to make being poor relatively less desperate and uncomfortable. And more access to cheap consumer crap from Walmart.

“Many crucial services, though, remain out of reach for poor families. The costs of a college education and health care have soared. Ms. Hagen-Noey, for instance, does not treat her hepatitis and other medical problems, as she does not qualify for Medicaid and cannot pay for her own insurance or care.

“Child care also remains only a small sliver of the consumption of poor families because it is simply too expensive. In many cases, it depresses the earnings of women who have no choice but to give up hours working to stay at home.

““The average annual cost for infant care in the U.S. is $6,000 or $7,000 a year,” said Professor Ziliak of the University of Kentucky. “When you look at the average income of many single mothers, that is going to end up being a quarter of it. That’s huge. That is just out of reach for many folks.””

What isn’t available to the poor is opportunity to be anything other than poor. Economic mobility has decreased these past decades. Poor people in the past were worse off in many ways, but they also had more opportunities in many ways for economic mobility (cheap housing and college education, high paying jobs with good benefits, etc). Most poor people don’t want to be poor, don’t want to rely on federal programs, and don’t want cheap consumer crap from Walmart as the only appeasement for a life of misery and desperation.

“And many poor families barely make it from paycheck to paycheck. For evidence, economists point to the fact that children living in families with food stamps eat more calories at the beginning of the month than the end of it.

“Economists pointed out that many low-income families struggled to use even the assets they had: keeping gas in the car, paying for cable and keeping the electricity on. Many families rely on expensive credit. And even if those families sold their assets, often it would only provide them with a small buffer, too. “

Owning a car was once a luxury. Now a car is a necessity and a burden. Traveling further distances to work and shopping has become more common, for the small local factory and corner store have become rare. Meanwhile, public transportation hasn’t grown with the need for it. Poor people need vehicles, even when they can barely afford to pay for gas and repairs.

Sometimes the forced choice is between a tank of gas and buying groceries. But if there isn’t a tank of gas, a person can’t get to work and might lose their job. So, basic necessities such as food get sacrificed. Skipping meals isn’t healthy, but it won’t kill you right away. People can survive on very few calories, when they have to, although most people would like more than mere survival.

“In the end, many mainstream economists argue, the lives of the poor must be looked at in light of the nation’s overall wealth and economic advancement.

““If you handpick services and goods where there has been dramatic technological progress, then the fact that poor people can consume these items in 2014 and even rich people couldn’t consume them in 1954 is hardly a meaningful distinction,” said Gary Burtless, an economist at the Brookings Institution. “That’s not telling you who is rich and who is poor, not in the way that Adam Smith and most everyone else since him thinks about poverty.””

There is the rub.

Many things have become cheaper. But the most important things have become more expensive, specifically the very things that help people get out of poverty. It costs more to not be poor than it once did.