
Growth Has Been Good for Decades. So Why Hasn’t Poverty Declined? - sinned
http://www.nytimes.com/2014/06/05/upshot/growth-has-been-good-for-decades-so-why-hasnt-poverty-declined.html
======
spodek
Growth describes the size of the economy. Poverty describes distribution.
While size and distribution may correlate long enough that people start to
believe they causally relate, they don't have to.

"A rising tide lifts all boats" is a nice belief and accurate for many boats
and tides, but there's no reason to believe that what holds for boats holds
for economies, any more than the behavior of dominoes held for Southeast Asian
countries.

For that matter, it doesn't hold for all boats. A big enough tide could
completely submerge a boat firmly enough anchored to the sea floor, for
example.

~~~
happyscrappy
If you can't stipulate that the poor are better off today than decades ago I
don't know what to tell you. For some reason people insist on the "things are
getting worse" narrative reality be damned.

~~~
jdlshore
The article makes a fairly compelling case that they're not better off. Do you
have anything better than an argument from incredulity?

~~~
zacharytelschow
The article simply makes the case that they aren't making more money, but it
doesn't make the case that they're not better off.

~~~
CodeMage
"Better off" than what? That should be the key question. A lot of people in
these comments seem to think that just because poor people's conditions are
better now than X years ago, that means that they're less at a disadvantage
compared to the rest. That kind of logic reminds me of this:
[http://mostlysignssomeportents.tumblr.com/post/66889970151/s...](http://mostlysignssomeportents.tumblr.com/post/66889970151/seananmcguire-
cumbersome-cucumber)

------
paul_f
Unless one defines poverty clearly, then I cannot accept this premise. For
example, the US census bureau uses 48 different poverty thresholds and does
not explain clearly where they came from.
[http://www.census.gov/hhes/www/poverty/about/overview/measur...](http://www.census.gov/hhes/www/poverty/about/overview/measure.html)

Here are some other interesting comments that should throw the entire
conversation into doubt: \- They are intended for use as a statistical
yardstick, not as a complete description of what people and families need to
live. \- Many government aid programs use a different poverty measure \-
Poverty thresholds were originally derived in 1963-1964, using: U.S.
Department of Agriculture food budgets designed for families under economic
stress. and Data about what portion of their income families spent on food.

BTW, they also admit that they do not take geography into account. Anybody see
a problem with that?

~~~
jal278
While the particular measure of _poverty_ may be in question, and in general
poverty may be a tricky intuitive concept to nail down, the entire
conversation is not thrown into doubt: We can quibble all day about the
meaning and quantification of terms, but the underlying intuitive concept is
what is important. I think we can agree that poverty in the US has not been
eradicated -- although theoretically it seems possible given increases in
productivity.

Has increased productivity and economic growth really 'trickled' down as some
would argue? It would seem not, as wages have not increased proportionally
with productivity [1]. It is at least worth thinking about the author's
conclusion: "You also have to devise strategies that make the benefits of a
stronger economy show up in the wages of the people on the edge of poverty,
who need it most desperately."

[1]
[http://economics.stanford.edu/files/Theses/Theses_2007/Sachd...](http://economics.stanford.edu/files/Theses/Theses_2007/Sachdev2007.pdf)

~~~
oldspiceman
True but a single measurable criteria is essential. It won't completely
capture 'poverty' but it's a step in the right direction. Once the first
poverty measure is completely reduced, we could examine the next. I'm amazed
that this doesn't exist.

------
api
It's interesting to me that the stagnating or declining middle class is
largely a first world issue, while in the developing world the middle class is
exploding.

The best explanation I've encountered is Peter Thiel's commentary on
horizontal vs. vertical development. We've taken an energy and industrial
system that absolutely cannot scale to seven billion people and now we're
trying to make it scale to seven billion people. The result is a kind of low-
grade, very slow malthusian event in which people in the developed world are
(relatively speaking) impoverished by exploding energy and resource costs.
What we need is vertical development -- technological development -- to create
systems that actually _will_ scale. Everybody can't drive a hydrocarbon
powered car. It can't be done.

I think this also explains why first world poverty rates are not shrinking.
The poorer you are the more price sensitive you are to things like energy
prices, so the poor are impacted by scarcity exponentially more than the
wealthy.

Note that if this is true then wealth redistribution might not help. It might
just trigger price inflation in scarce resources. Redistribute more and
they'll inflate more, and more, and more. ... But then again maybe it would
help by causing lots of investment money to chase that demand and develop
alternatives. It would cause hockey stick price signals across all the rate
limiting inputs for the economy.

Hmm... well now... maybe we _should_ drop money from helicopters...

~~~
JetSpiegel
Rich guy says "wealth redistribution" doesn't work.

Suure, let's take that at face value.

~~~
api
Actually Thiel didn't say that, but I assume given his right-libertarian views
he's against it. Peter Thiel is a mixed bag for me. He sometimes has
profoundly interesting things to say, but then he says things that strike me
as either deeply naive or disingenuous. I'm still not sure which, and no I do
not think naive and billionaire are mutually exclusive. I spent enough time in
the ivy league orbit to know that "elite naiveté" is a thing.

I'm personally both for it and against it. I'm against it in perfect world
post-violence volitional society land, but I'm for it in pragmatic real Earth
that we live on right now land.

The problem is that we _absolutely do not_ live in a volitional society, and
pretending we do often results in worse injustices than the pragmatic
approach. Our world is run by gangsters and armies with fraud and guns. It's
not that far removed from the ancient tribalism we clawed our way out of.
Wealth redistribution is an acceptable band aid that moves us in the right
fundamentally humanistic direction. It empowers the great unwashed masses to
improve their bodies and minds. Abolishing wealth redistribution amounts to a
kind of unilateral disarmament unless you can also convince all global elites
to stop using violence and deception to advance their own economic goals.

------
jlarocco
Looks like they're moving the goal posts a little bit here. "Poverty" today is
not the same as "poverty" decades ago.

The standard of living for people in poverty today is (a lot) higher than the
standard of living for people in poverty decades ago.

~~~
jonnathanson
Really depends on what indices and metrics you're looking at when you describe
"standard of living." Apples-to-apples comparisons between living standards
in, say, the 1950s and the 2010s do not involve things like the distribution
of internet access, TV sets, or microwave ovens -- consumer goods whose
general cost has come down dramatically over time, and whose distribution
reflects more of a supply-side story than a rising-economic-tide story.
Rather, apples-to-apples comparisons involve things like life expectancies,
education levels, access to clean water and adequate sustenance, health care,
and a roof over one's head. They also include economic opportunity, and the
ability to advance one's socioeconomic position.

By many of these standards, on average, poor people are generally better off
today than they used to be. By other standards, they're worse off. Upward
mobility, for instance, is more stagnant today than it has been in many
decades. Health care costs and access have been getting worse, not better --
and recent reforms are unlikely to have changed much, despite what Democrats
_or_ Republicans would tell us. (Fucked health care costs are offset, to some
degree, by advances in medicine and science, of course.) Access to food is
generally a lot better, but the quality of the calories has grown worse,
leading to health problems -- for which our health care system is inadequate.
Housing is...well, kind of a fucked situation, but has been for quite some
time; our interest rates and tax system create a lot of perverse incentives in
the housing market. That market is now pretty warped and dysfunctional, with
no return to sanity in sight.

On the balance, I think you could say that a poor person today is better off
than a poor person would have been in the 1920s. But is a poor person today
better off than he would have been in the most recent era of prolonged
stagnation, the 1970s? Very debatable.

~~~
MarkMc
I don't understand why you reject 'supply-side story' things like TV sets,
microwave ovens and internet access.

I'd certainly feel worse off if you took away my TV - or replaced it with a
1970's black-and-white version. Isn't it obvious that the cost and quality of
TVs affects people's "standard of living"?

~~~
sharemywin
So you'd trade your TV for adequate healthcare? It's not that those things
don't have value it's just compared to the real issues for someone in poverty
they don't add up to all that much.

~~~
Turing_Machine
A great deal of what we call "adequate healthcare" didn't even exist in 1970.

Cancer was essentially a death sentence back then. So was a heart attack.

No MRI. No CAT scan. No minimally-invasive surgery.

They were still performing major surgery to "treat" ulcers back then. Now we
know they're caused by bacteria and can clear them up with no surgery needed.

Really poor people in the United States do get free healthcare. It's called
"Medicaid".

------
malchow
"Growth has been good for decades, so why do we still have 10% of people who
are poorer than the remaining 90% of the people?

Debating policy based on a chart showing one clean* variable -- growth -- and
one that a faceless bureaucracy sets by fiat every year is not a brilliant
idea.

As ever, Adam Smith, writing in 1776, had the right idea. Here is how he
defined poverty: “By [poverty] I understand, not only the [lack of]
commodities which are indispensably necessary for the support of life, but
whatever the custom of the country renders it indecent for creditable people,
even of the lowest order, to be without. A linen shirt, for example, is,
strictly speaking, not a necessary of life. . .But in the present times,
through the greater part of Europe, a creditable day-labourer would be ashamed
to appear in public without a linen shirt. . .Custom, in the same manner, has
rendered leather shoes a necessary of life in England. The poorest creditable
person of either sex would be ashamed to appear in public without them. .
.Under necessaries, therefore, I comprehend, not only those things which
nature, but those things which the established rules of decency have rendered
necessary to the lowest rank of people.”

* The growth variable isn't clean, either. Much of the alleged growth is in transfers, government, and credit.

------
zwieback
Like many commenters I have the same question about what "poverty" really
means. I asked an economist doing social policy, and the response was
basically that the definition of poverty is not an economic question but a
political one. Which would explain why we are talking about this issue so much
without any real progress.

Without a doubt, today's definition of poverty would be very different from
the one used in the 1950s but the fundamental question is whether we should
have an absolute metric or a relative one.

~~~
TheOtherHobbes
I think the fundamental question is whether or not people in poverty can
afford to buy food to eat.

Not 'nice food' but 'food', period.

The answer is usually - and increasingly - a very simple 'no.'

Here are stats from one food bank org:

[http://www.trusselltrust.org/stats](http://www.trusselltrust.org/stats)

Or how about being too poor to heat your home? At least 15% of households are
in fuel poverty:

[http://www.opportunitystudies.org/repository/File/fuel%20pov...](http://www.opportunitystudies.org/repository/File/fuel%20poverty.pdf)

Aside from the humanitarian questions, which should be self-evident, the
reality is that poverty is a criminal waste of potential. At least some of
those worrying about food and heat have - had - the potential to be inventors
and entrepreneurs.

That's not going to be possible while the culture they live in keeps them
poor.

------
fragsworth
We are building incredible new technologies at an astounding rate, resulting
in less demand for work that can be automated. So people who do "automatable"
work can't make much money anymore.

Growth appears to be good, but all the profits are going to the owners and
employees of these relatively small technology companies.

This is also probably a major part of the reason why the wealth disparity is
increasing.

~~~
lucb1e
> people who do "automatable" work can't make much money anymore.

I tend to think of it "don't _have_ to do that work anymore". They can focus
on other things, but basically the work is done for us. So the machines are
creating wealth and in the end people will have to work less and less.

I'm not sure this is the right example, but wasn't it revolutionary of the
Ford motors factory to introduce 8-hour work days in the early 1900s? Didn't
people work much longer before then, if I remember correctly? And isn't Sweden
implementing a 6-hour work day right now?

I think we are making great progress with taking work out of people's hands.
The people who used to make cars, which is now largely automated, could do
other things that are in greater demand, while on the whole humanity has to
expend less work for the same wealth.

This is just the way I look at things, but of course I may be too young and
naive to really understand it.

~~~
malyk
The machines are creating wealth for the owners of the machines which isn't
being (re)distributed to the former workers at all.

That's the crux of the problem. Maybe there will be another revolution in jobs
that need to be done that these people will be able to take up, but until that
time we are sentencing a huge number of people to live in poverty. We need to
find a way to help those people until this new class of jobs people imagine
will appear actually become reality.

~~~
lucb1e
> The machines are creating wealth for the owners of the machines which isn't
> being (re)distributed to the former workers at all.

Isn't it? You're right in that I have yet to hear someone laying off staff and
then paying them because machines do all the work, but on the whole I do think
everyone profits. At least in the Netherlands you get money during the time
that you are looking for employment.

> we are sentencing a huge number of people to live in poverty

Last I heard we are still free to start our own farms and live off of those,
but it seems people rather like having things like cars, power, the Internet
and other luxuries of the past few decades. And most people living in
"poverty", as you say, have all of the above.

Those won't be the best cars or the fastest connections to the Internet, but I
never heard about a "huge" number of people being laid off and then having to
go without all of that. You'd think they'd be in the streets rioting against
the machines if it was that bad.

~~~
davidcbc
"Free" to start our own farms?

Where are they getting the land? Where are they getting the crops and
equipment needed? Where are they getting the general knowledge of how to even
grow a farm that can sustain a family?

------
nilkn
Isn't it simply possible that what constitutes poverty has changed over time?
If poverty is defined as, say, the bottom tenth of the population income-wise,
then poverty will _never_ decrease, by definition.

~~~
Symmetry
It's not just possible, that's how the US government statistics work. Poverty
is defined in relation to the distribution of pre-tax, pre-benefits income. So
barring a radical change in the distribution of income, neither government
anti-poverty programs or general economic growth can reduce poverty by
definition. Why was this definition pushed by the same people pushing anti-
poverty programs? I really have no idea.

------
AnimalMuppet
Somewhere around a _billion_ people have been lifted out of poverty in the
past 30 years or so. (Citing from memory, don't have a source handy, but it's
about that number). It's amazing how good that is.

But they weren't in the US.

So why hasn't US poverty declined? The same reason it _has_ declined other
places: globalization.

~~~
dragonwriter
Actually, "globalization" isn't the reason, the reason is "two different
definitions of poverty".

------
opendais
I think the underlying problem is the bottom end of the US labor market only
has two ladders up and they pulled out from under them:

Manufacturing

Education to get a better job [I don't mean college. I mean something like a
trade school to become a plumber or the like].

The kind of blue collar manufacturing jobs they could get is largely done in
other countries and imported to the US. There simply aren't enough of these in
the US to employ a larger percentage of the population.

Education has gotten too expensive and given these are likely people who could
never graduate college...it is very high risk for them as well, even at a
trade school.

I think we really need to get people to go from High School to a Trade School
to a Job. Because otherwise, I don't see a way to really shrink the poverty
level without raising the minimum wage which is politically unreliable [e.g.
We might raise it for 2-3 years, but in 6-8 we will ignore it for a decade
again]

~~~
kbenson
_given these are likely people who could never graduate college_

I don't think that's a given at all. IMO, whether a large portion of the
populace thinks they could graduate, would want to go to college, or feels
they have the option to go to college does not imply whether they actually
could finish if they desired.

~~~
opendais
Do you honestly want to argue 51% of the people in poverty can pass a college
level Math or English class? As well as afford the time away from working to
gradate?

I don't think that is true.

[http://www.duck9.com/College-Student-Drop-Out-
Rates.htm](http://www.duck9.com/College-Student-Drop-Out-Rates.htm) Over 50%
are from financial or academic disqualification reasons...

[http://nces.ed.gov/fastfacts/display.asp?id=40](http://nces.ed.gov/fastfacts/display.asp?id=40)
We are talking about 50-60% graduation rates in 6 years for the people
colleges already accept.

I think poverty would make it hard enough that rate would drop significantly.

~~~
kbenson
I'm arguing that very many of them have the potential to, and that it's
outside factors (such as finances, motivations, and determination) that make
the difference in a lot of cases.

It's possible I misread the intent of your original comment and we aren't in
disagreement on this.

------
lifeofanalysis
This analysis is an opinion without proper analysis. There could be many other
structural reasons. For instance, my gut says that the poverty is increasing
even though the growth is good because the balance of trade for the USA has
worsened significantly ever since the global trade took off [1] right around
1975, just at the beginning of the "decline" that this article talks about. So
if someone in China is willing to do your job for $2/day, your wages are going
to go down even as the investors benefit from increases in profits of the
businesses manufacturing more in China. I wish the author had done at least a
tiny bit of analysis, rather than spouting opinions based on inanities like
"the tide lifts all boats". In this case, the boats of the poor are slowly
sinking to the level of global wages for any given job.

[1] [http://www.tradingeconomics.com/charts/united-states-
balance...](http://www.tradingeconomics.com/charts/united-states-balance-of-
trade.png?s=ustbtot&d1=19500101&d2=20141231)

------
JohnDoe365
Simple answer: Growth was primarily for the already rich, leaving those in
poverty behind.

It's not necessarily that the underprivileged got poorer, it's more that they
didn't grow, which results in a virtual gap still widening.

------
outside1234
A rising boat in the economy also raises the bar in terms of costs. Just think
of what has happened in San Francisco - huge increase in wealth also has lead
to a huge increase in costs.

~~~
zacharytelschow
A policy of essentially not allowing new construction in SF has led to a huge
increase in costs. This topic has been hammered on repeatedly.

------
NoPiece
Growth is only one of hundreds of factors that affect poverty. Looking at only
one factor without considering others is misleading. Poverty rates have been
steady in the face of the disintegration of the family unit - perhaps growth
is what is keeping it from skyrocketing? Unless you know what poverty would
have been with no growth or negative growth, you can't measure and make the
assumption that growth isn't positively impacting poverty.

------
sharemywin
This article is comparing apples to orgies(it was in my spell check so I went
with it). Since most of the growth in the US economy over the last few decades
has been from globalization you would need to look a poverty levels for the
areas we outsourced most of the manufacturing jobs to.

------
wnevets
Just have to wait longer for the trickle down to reach everyone else.

