Inequality statistics warrant closer inspection

A phrase often attributed to former British Prime Minister Benjamin Disraeli reads, “There are three kinds of lies: lies, damned lies and statistics.” I hate to be cliché, but I think this quote is a perfect example of a situation of which I have become aware.

An article in the Sept. 29 edition of the Daily Skiff titled “Contrary to idea, inequality exists” included the line, “the poverty rate has climbed to its highest point in 15 years, with an astounding 43.6 million Americans in 2009 (a rate of 14.3 percent) living below the poverty line of $22,050 for a family of four.”

This statistic is misleading.

First of all, if we look at the big picture of poverty, back in 1959 around 22 percent of Americans were in poverty. Getting it down to 14.3 percent is an astonishing feat for our country. Just because we get a blip doesn’t mean we are losing our middle class and we have an inequality “crisis.”

Second, these statistics don’t take into account in-kind transfers or things like Medicare, Medicaid, subsidized housing and the like. When you look at these statistics, the lives of those living below the poverty line have greatly improved.

Third, luck can also play a trick on these statistics. What we are essentially measuring is the worst year for a poor guy versus the best year for a rich guy. This means that those who appear to be very rich only stay like that for a short time, while those with bad luck tend to get better in the future.

Lastly, the fact that these numbers are even looked at as shocking shows how wealthy we truly are here. The poverty line is $22,050, but I bet a starving family in Africa or India would love to have even half of that. Many poor people in America have things people in other countries only dream of, like color televisions, microwave ovens and even air conditioning. While this is by no means the high life, it’s still important to look around at the rest of the world and see what you truly have. In our country, our poor people are fat. When in human history and in what country have the poorest of the poor had an obesity problem?

What’s even worse is this: what evidence does this person have to say that economic mobility is declining? The truth is that Americans are incredibly mobile. In the 1970s and 1980s for example, almost half of those in the bottom 20 percent of the income bracket had moved up by the end of the decade, according to the book “The Economics of Public Issues.”

Government policy may not be helping either. The war on drugs takes a particularly hard hit on the poor. Many impoverished people are locked up on felony drug charges. Once they get out of jail they find it hard to get a job that pays well, making it even harder to get out of poverty.

Poverty is something that can, and should, be addressed in America. Some wealth distribution, with certain incentives of course, should occur along with getting rid of public policy that kills opportunities for the poor. But to say that there is rise in poverty during a recession without taking into account what those statistics really mean misleads readers into thinking the problem is worse than it is.

Michael Lauck is a junior economics major from Houston.