From Fox News Latino:
While Latinos are gaining in political clout, they are also falling down the economic ladder, new Census numbers show.
This is a misleading topline in that it suggests a change over time, when the main story here is really about an important change in methodology.
The official "poverty line" was dreamed up in the early 1960s (?), but was quickly criticized for not including government transfer payments. A half century later, the feds have finally gotten around to announcing poverty rates inclusive of certain welfare payments (but not including stuff like public schools, emergency rooms, policing, etc.) Also, living expenses are counted, too.
Economists long have criticized the official poverty rate as inadequate. Based on a half-century-old government formula, the official rate continues to assume the average family spends one-third of its income on food. Those costs have actually shrunk to a much smaller share, more like one-seventh.
The official formula also fails to account for other expenses such as out-of-pocket medical care, child care and commuting, and it does not consider noncash government aid, such as food stamps and tax credits, when calculating income.
Under the new, alternative methodology:
Latinos poverty rates climbed to 28 percent after the census reconfigured its algorithm to take into account medical costs and government programs. The Hispanic poverty level rose after the government took into account safety-net programs such as food stamps and housing, which have lower participation among immigrants and non-English speakers.
Especially among illegal immigrants. The Gingrich House of the mid-1990s had the opportunity to actually do something to restrict immigration, but they punted on the larger question. On a lesser question, fortunately, they did take constructive action, restricting welfare for illegal aliens. I suspect that this has had a positive impact on the quality of illegal aliens and their likelihood to turn into welfare sponges.
... The numbers released Wednesday by the Census Bureau are part of a newly developed supplemental poverty measure. Devised a year ago, this measure provides a fuller picture of poverty that the government believes can be used to assess safety-net programs by factoring in living expenses and taxpayer-provided benefits that the official formula leaves out.
Based on the revised formula, the number of poor people exceeded the 49 million, or 16 percent of the population, who were living below the poverty line in 2010. That came as more people in the slowly improving economy picked up low-wage jobs last year but still struggled to pay living expenses. The revised poverty rate of 16.1 percent also is higher than the record 46.2 million, or 15 percent, that the government's official estimate reported in September.
Due to medical expenses, higher living costs and limited immigrant access to government programs, people 65 or older, Hispanics and urbanites were more likely to be struggling economically under the alternative formula. Also spiking higher in 2011 was poverty among full-time and part-time workers.
The portrait of poverty broken down by state notably changed. California tops the list, hurt by high housing costs, large numbers of immigrants as well as less generous tax credits and food stamp programs to buoy low-income families. It is followed by the District of Columbia, Arizona, Florida and Georgia.In the official census tally, it was rural states that were more likely to be near the top of the list, led by Mississippi, New Mexico, Arizona and Louisiana.
Under the new calculations that include cost of living (but not cost of homeownership) and some government benefits:
Hispanics and Asians also saw much higher rates of poverty, 28 percent and 16.9 percent, respectively, compared with rates of 25.4 percent and 12.3 percent under the official formula. In contrast, African-Americans saw a modest decrease in poverty, from 27.8 percent under the official rate to 25.7 percent based on the revised numbers. Among non-Hispanic whites, poverty rose from 9.9 percent to 11 percent.
We still need an official calculation of middleclassness, which would involve the cost of buying a home in a decent public school district.
iSteve readers will be shocked SHOCKED to learn that when cost of living is entered into the equation, it turns out that immigrant-heavy states lead the True Poverty list.
Yet, the idea that California, home to the vast wealth generating industries of Silicon Valley and Hollywood, leads America in poverty ought to be a wake-up call to the conventional wisdom.
When Esquire sent Tom Wolfe to California in 1963-64 to write about the local hot rod scene, he found the opposite of what the government is reporting today. Michael Anton writes in City Journal in "Tom Wolfe's California:"
... the core insights on which Wolfe built his career—the devolution of style to the masses, status as a replacement for social class, the “happiness explosion” in postwar America—all first came to him in California. ...
That piece—“The Kandy-Kolored Tangerine-Flake Streamline Baby”—represents the first time that Wolfe truly understood and was able to formulate the big idea that would transform him from an above-average feature writer into the premier cultural chronicler of our age. Those inhabiting the custom car scene were not rich, certainly not upper-class, and not prominent— indeed, they were almost invisible to society at large. Wolfe described his initial attempt to write the story as a cheap dismissal: “Don’t worry, these people are nothing.” He realized in California that he had been wrong. These people were something, and very influential within their own circles, which were far larger than anyone on the outside had hitherto noticed. ...
“Practically every style recorded in art history is the result of the same thing—a lot of attention to form plus the money to make monuments to it,” Wolfe wrote in the introduction to his first book. “But throughout history, everywhere this kind of thing took place, China, Egypt, France under the Bourbons, every place, it has been something the aristocracy was responsible for. What has happened in the United States since World War II, however, has broken that pattern. The war created money. It made massive infusions of money into every level of society. Suddenly classes of people whose styles of life had been practically invisible had the money to build monuments to their own styles.” If Wolfe’s oeuvre has an overarching theme, this is it.
Well, 1963 was a long time ago in California. (Here's Benjamin Schwarz of The Atlantic on what has been lost in California.)