Wealth creation helps the poor

"As the rich get richer, the poor get richer."

That may sound like a ridiculous overstatement but it's true in the sense that nations that create wealth redefine what it means to be poor. Being poor in a wealthy nation is radically different than being poor in a developing one. The above statement also challenges the zero-sum myth: "As the rich get richer, the poor get poorer," which has so tainted the understanding of economic imaginations of those in the West.

In a new study titled "Air Conditioning, Cable TV, and an Xbox: What Is Poverty in the United States Today?," Robert Rector and Rachel Sheffield of The Heritage Foundation demonstrate that the federal government's definition of "poor" differs from what most Americans imagine it to be in reality.

For example, according to the most recent data (2005), the authors point out:

"[T]he typical poor household, as defined by the government, had air conditioning and a car. For entertainment, the household had two color televisions, cable or satellite TV, a DVD player, and a VCR. In the kitchen, it had a refrigerator, an oven and stove, and a microwave. Other household conveniences included a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker. The family was able to obtain medical care when needed. Their home was not overcrowded and was in good repair. By its own report, the family was not hungry and had sufficient funds during the past year to meet all essential needs."

In fact, to be more specific, 99.6 percent of individuals the federal government defines as "poor" have refrigerators, 97.7 percent have televisions, 78.3 percent live in homes with air-conditioning, and 62 percent live in homes with washing machines. These percentages are only possible in a nation as wealthy as the United States; it certainly is not the case in Sudan.

It is important to keep in mind that "the poor" does not represent a static population of individuals over time. In the real world, individuals cycle in and out of poverty in the same way they move in and out of social classes. One of the great tragedies of our current recession is that many people are worse off than they were five years ago regardless of class. Many lower-middle-class, working-class, and poor individuals have experienced the recession in worse ways than others because they lacked the economic cushion to weather the storm. But when the economy recovers, many of the individuals currently defined as poor by government standards will likely move out of poverty and regain their standing as middle-class.

Interestingly Rector and Sheffield also point out how liberal and progressive Christians like Ron Sider are misleading the church because of insufficient economic distinctions and rhetoric detached from real facts:

"Sider begins his book [Just Generosity: A New Vision for Overcoming Poverty in America] with a chapter entitled 'What Does Poverty Look Like?' in which he informs his readers, 'In 2005, in the United States, 37 million people lived in poverty in the richest society in human history.' He asks, 'Who are the poor? Where do they live?' and proceeds to answer these questions with a lengthy description of the home of Mrs. Onita Skyles, a 68-year-old widow."

The widow in Sider's example is experiencing abject poverty, and he proceeds to use her to define what poverty means in America. "Sider is seriously misleading when he implies that such living conditions are representative of 37 million poor people," note Rector and Sheffield. "In fact, the situations he presents are not at all representative of the poor in America. The described conditions are very unusual and probably found in no more than one in 500 households."

Political liberals and progressive Christians are vulnerable to accepting zero-sum ideology without taking the time to test those theories against real data and facts. The argument here is not that American poverty is "OK"; the point is to highlight the fact that making public policy decisions about "helping the poor" and "ending poverty" in America needs to take into account how "the poor" actually live in reality. Otherwise we will continue to miss the mark and not help the truly disadvantaged. Our public policy needs to be directed toward people who are truly suffering and stuck in cycles of poverty so that we create the conditions that allow for the possibility of sustainable economic mobility.