Posted on October 11, 2004

The Changing Face of Poverty

Robert J. Samuelson, Newsweek, Oct. 18

This is an issue that Bush and Kerry don’t want to talk about because it touches a politically explosive subject: immigration

The census bureau’s annual figures on family incomes and poverty were bound to become familiar factoids in the Bush-Kerry combat. The numbers seem to confirm what many people feel: the middle class is squeezed; poverty’s worsening. In 2003 the median household income dropped for the fourth consecutive year, to $43,318; the official poverty rate rose for the third year, to 12.5 percent of the population; and the number of people without health insurance increased for the third year to 45 million, or 16 percent of the population. But the debate you’re hearing is not the real deal. What ought to be the debate is shunned by both candidates because it touches a politically explosive subject: immigration.

The Census statistics are both better and worse than advertised. They’re better because the middle class isn’t vanishing. Many middle-class families achieved large income gains in the 1990s and — despite the recession and halting recovery — have kept those gains. They’re worse because the increase in poverty in recent decades stems mainly from immigration. Until our leaders acknowledge the connection between immigration and poverty, we’ll be hamstrung in dealing with either.

Let’s examine the Census numbers. They certainly don’t indicate that, over any reasonable period, middle-class living standards have stagnated. Mostly, the middle class is getting richer. Consider: in 2003, 44 percent of U.S. households had before-tax incomes exceeding $50,000; about 15 percent had incomes of more than $100,000 (they’re also included in the 44 percent). In 1990 the comparable figures were 40 percent and 10 percent. In 1980 they were 35 percent and 6 percent. All comparisons are adjusted for inflation.

True, the median household income has dropped since 1999 and is up only slightly since 1990. That’s usually taken as an indicator of what’s happened to a typical family. It isn’t. The median income is the midpoint of incomes; half of households are above, half below. The median household was once imagined as a family of Mom, Dad and two kids. But “typical” no longer exists. There are more singles, childless couples and retirees. Smaller households tend to have lower incomes. They drag down the overall median. So do more poor immigrant households.

A slightly better approach is to examine the incomes of households of similar sizes: all with, say, two people. In 2003 those households had a median income of $46,964, off about $900 from the peak year (1999) but up almost 10 percent from 1990. For four-person households, the median income in 2003 was $64,374, off about $2,200 from its peak but still up about 14 percent from 1990. Though unemployment and less overtime have temporarily dented incomes, the basic trend is up.

Now look at poverty. For 2003, the Census Bureau estimated that 35.9 million Americans had incomes below the poverty line; that was about $12,000 for a two-person household and $19,000 for a four-person household. Since 2000, poverty has risen among most racial and ethnic groups. Again, that’s the recession and its after-math. But over longer periods, Hispanics account for most of the increase in poverty. Compared with 1990, there were actually 700,000 fewer non-Hispanic whites in poverty last year. Among blacks, the drop since 1990 is between 700,000 and 1 million, and the poverty rate — though still appallingly high — has declined from 32 percent to 24 percent. (The poverty rate measures the percentage of a group that is in poverty.) Meanwhile, the number of poor Hispanics is up by 3 million since 1990. The health-insurance story is similar. Last year 13 million Hispanics lacked insurance. They’re 60 percent of the rise since 1990.

To state the obvious: not all Hispanics are immigrants, and not all immigrants are Hispanic. Still, there’s no mystery here. If more poor and unskilled people enter the country — and have children — there will be more poverty. (The Census figures cover both legal and illegal immigrants; estimates of illegals range upward from 7 million.) About 33 percent of all immigrants (not just Hispanics) lack a high-school education. The rate among native-born Americans is about 13 percent. Now, this poverty may or may not be temporary. Some immigrants succeed quickly; others do not. But if the poverty persists — and is compounded by more immigration — then it will create mounting political and social problems. One possibility: a growing competition for government benefits between the poor and baby-boom retirees.

You haven’t heard much in this campaign about these problems — and you won’t. To raise them is to seem racist; that’s a heavy burden for politicians or journalists. Politicians also risk alienating Hispanic voters. Worse, there’s the hard question: what to do? President George W. Bush and various Democrats have offered immigration plans that propose different ways of legalizing today’s illegal immigrants. That’s fine as long as the future inflow of illegal and poorer immigrants can be controlled. That would require stiffer measures than either party has endorsed. These are tough problems; our leaders give them the silent treatment. This is understandable, but it won’t make them go away.