A Better Measure of America’s Poverty Rate

Sen. Mike Lee is proposing legislation that, if instituted correctly, could more accurately reflect America’s poverty rate to better determine the impact of welfare assistance and whether it is doing the job it is supposed to do.

Lee’s proposal is called the Poverty Measurement Improvement Act. The point of it is just as the title explains: to more accurately measure household incomes to see if poverty is as bad as the data indicate.

As Lee, R-Utah, explains:

This bill would improve the data available to lawmakers by authorizing a new Census Bureau survey that would more accurately calculate income by including wages and federal means-tested benefits. This information would then be linked with individual records from the IRS and other federal agencies that administer means-tested benefit programs.

The Census Bureau calculates the official poverty rate, but the results are based on families’ pre-tax, cash income, and ignores assistance like Supplemental Nutrition Assistance Programs (SNAP) and tax credits for working families.  The result is that the Census counts the people who are being helped by these programs as still living in poverty when in fact they may be living in much better conditions.

Poverty has been a persistent and seemingly intractable problem for decades. President Lyndon Johnson launched the Great Society in 1964 with the goal of eradicating poverty. But in 1966, the poverty rate was 14.7 percent while in 2012, it was 15 percent. The lowest the poverty rate ever reached was during the Nixon administration, when it dove to 11.1 percent (1973).

In 2012, the amount spent on poverty programs was 20 times higher than when the anti-poverty programs were instituted in 1964, and during that time assistance has increased from $160 to more than $2,000 per person in real dollars.

As an aside, the number of children being raised by a single mother rose from 8 percent in 1964 to 23.7 percent in 2013 while the number of working-age men (25-54) participating in the labor force has dropped by shocking amounts.

As demographer Nick Eberstadt tells it, 7 million working-age men are currently not seeking work:

In fact, if work rates for men were only as high today as in 1965—a time when we enjoyed true “full employment”—nearly 10 million more men would have paying jobs today. Think of the difference that would make to our country.

In other words, what used to be a “nuclear household” has seemingly been nuked.  Lee noted the impact of government programs that discourage one of the most important relationships individuals have and society benefits from: families.

The core problem with our welfare system today isn’t just its bloated annual budget, but its tendency to undermine the two most dependable routes out of poverty: marriage and work.

But we can’t improve these programs until we have better data on how they are affecting working families. The Poverty Measurement Improvement Act will do just that.

Poverty researchers on both sides of the political aisle agree that government assistance helps pull people out of poverty. Accurately measuring the role of public assistance will help determine where opportunities lie to increase workforce participation, encourage stronger households, and inform the role of programs like the Earned Income Tax Credit that are used to get people into the workforce. That’s a goal to encourage, and measuring the data correctly seems like an easy starting point.

Get Out of Dodge? American Migration Slows, Homebodies Abound

Geographic mobility has always played a big part in the “American dream.” For my part, I have moved between states or countries 10 times. But you don’t have to share my apparent wanderlust to realize that picking up and moving can inflect a person’s life for the better. Especially in a hyper-competitive economy, we would intuitively expect people to be moving more and more to seize opportunities and find the best occupational fits.

I recently got curious about this topic and whether reality matched my expectations. I spent an afternoon digging into some migration data from the Census Bureau. And what I found surprised me: People today are actually moving less often than the historical norm.

Much less.

The data are astonishing. In the 1960s, roughly 20 percent of the US population moved in any given year. Since then, that fraction has been cut almost in half. Looking at the numbers another way: While the U.S. population has increased by more than 75 percent since 1960, the total number of people who move annually is roughly the same.

Curiously, those who would seem most compelled to move appear to be especially stuck. Look at Mississippi, which has one of the nation’s highest unemployment rates. One might expect to see outmigration to places such as North Dakota, where unemployment is about half as high. Yet Mississippians today are even less likely to move out of state than they were before the Great Recession.

Why the decline?

Reading through the possible explanations, one popular hypothesis was that our aging population explains a lot of this decline. Younger adults have always moved more relative to older people, and so a population in which they make up a declining share would be expected to be less mobile on average.

This is part of the story, but it doesn’t capture everything that’s going on. For example, it turns out mobility has dropped over time for all ages. In fact, since the onset of the Great Recession, the decline in mobility has actually been the most dramatic among millennials. Other factors must also be contributing. Chief suspects include a more broadly stagnant economy, a housing crisis that left many anchored to homes while they wait for values to rebound, and — especially interesting to me — a regrettable cultural shift that undersells the importance of entrepreneurial living.

Let’s talk solutions. First, we could reform our education system to better equip people with valuable skills that transcend particular organizations and localities. Reviving vocational and technical training programs via creative voucher schemes would be a good start.

Second, we can make moving easier. First and foremost, we should fine-tune welfare programs, many of which have policy quirks that can dissuade the vulnerable from relocating or from seeking employment at all. We could also experiment with small-scale programs in which the government offers relocation allowances or collects information about employment opportunities in other regions, and then rigorously assess their effectiveness.

But more than any policy tweak, we must set out to rebuild a culture that prizes dynamism and treating life as an entrepreneurial project. That starts with leaders who testify proudly to the true pillars of the American dream — courage, adventure, optimism, and a unique refusal to be tied down to our pasts.

When Alexis de Tocqueville came to our shores in the early 1800s, he didn’t find leaders who stoked — and sought to profit from — the masses’ fears of change. In fact, he found quite the opposite, noting that the American people embraced instability and churn as a source of wonder and self-improvement. Today, that sense of adventure is eroding and trepidation is taking its place.

Telling Americans they should be afraid or angry about our changing economy is exactly the wrong answer. The only acceptable response is to fight proudly and boldly for solutions. And I’m convinced that one of those solutions is to help people get out of Dodge.

This section is adapted from my latest New York Times piece.