What Does It Mean to be Poor?

Business writer Megan McArdle reflects on the question by examining whether poverty is measured by consumption or by income [bold added].

When you look at what people are consuming, you don't see the gross material deprivation that really used to characterize being poor, like lack of hot water, regularly having no food in the house, shivering yourself to sleep in the cold, or wearing patched (or worse, unpatched) clothes. Younger poor people quite frequently have things that older non-poor people consider nonessential luxuries, like cable or satellite television, expensive sneakers, and high-end cellular phones.

Every middle-class person knows someone who is technically "poor" as measured by income, but who drives a better car, wears nicer clothes, or has a more exciting night life than one's own. It's tempting to subscribe to the viewpoint that success or failure in life is their own fault:

...poor people are not so much lacking in money, as lacking in the self-discipline to spend their money wisely. This view is reinforced by the fact that a lot of immigrants do arrive here with even less than the native poor, often don't qualify for supplemental benefits that cushion the deprivation of the native poor, and nonetheless after a generation or two end up quite prosperous.

And yet we also know hard-working individuals of character who have fallen on hard times through no "fault" of their own. The catalyst that began the descent could be a divorce, the loss of a job, caring for a sick parent, the death of a breadwinner, or poor health. It seems impossible to craft a wise poverty program that will address each of the "eight million stories in the naked city".

Megan McArdle thinks that people often remain poor because they are trapped in bad neighborhoods:

People with impulse control problems, mental illness, drug and alcohol addictions, are very, very disproportionately likely to end up poor.....So even though these people remain a minority in poor neighborhoods, poor neighborhoods nonetheless have a lot more of them than more affluent communities...

More importantly, poor people have to put up with it, because they have a limited number of other neighborhoods to choose from, most of which have the same constellation of problems. If a gang moves into a middle class neighborhood and starts terrorizing the residents, either the cops take care of it, or the middle class people move. If it happens in a poor neighborhood, well, where are you going to go?

It's hard to see how we will ever have enough resources to make most bad neighborhoods safe, especially given local government budget constraints.

One more thought: poverty is more about the future than the present. When I was going to graduate school, debts exceeded my assets, and I had no income. Yet no one then would have thought to call me poor. Roll that same financial profile forward 40 years however, when productive years are largely in the past, and that would be a snapshot of an impoverished person by anyone's definition.

So here's what we're left with. Poverty is more about personal behavior, secure neighborhoods, values, and probable futures. If those all are aligned, money will take care of itself. © 2012 Stephen Yuen