Commentary: What is poverty and who are the poor is a moving target. Take, for example, a new study released by the United Way that claims that nearly 51 million households don’t earn enough to fund a monthly budget that includes housing, food, health care, transportation and a cell phone.
Cell phone? Really, you are poor if you can’t afford a cell phone. Many reading this column will say yes, a cell phone is essential to quality of life in 21st century America; many of you, like me, will balk at this.
This is not a new issue. In a real sense, poverty is a moving target. A generation ago, the issue was not cell phones, but color TVs; before that, a land line telephone. It is often remarked that the material wellbeing of the poor in America exceeds that of the middle income in many developing countries, or that of a nobility like duke or a count at the time of the Norman Conquest in 1066. Yet being poor in the United States of today, not able to have a cell phone, is not pleasant.
Economists have long distinguished between relative poverty, which is defined relative to material stands of a given society, and absolute poverty, which is a condition of severe deprivation where a household lacks sufficient resources to meet basic needs. Relative poverty changes with time; absolute poverty is the same in the Neolithic as it is today.
The natural tendency of people is to care about those who are more similar to them. So it is relative poverty that we care about. Most people have a cell phone; I can’t afford a cell phone, then I’m living in poverty.
Most of us are aware of absolute poverty—that there are people who literally are so poor that they can’t keep body and soul together. But these people are not living among us in the United States, so we don’t care. Sociologists will tell you that poverty is determined by what is customary, not by absolute need.
In fact, great strides have been made in eliminating absolute poverty. In 2000, the United Nation adopted the Millennium Goals, one of which was to reduce the population living in absolute poverty in half to 17%, by 2015.
Currently, the World Bank defines absolute poverty as an income below $2 per day. As of 2013, 11% of the population lives in absolute poverty, thereby, exceeding the Millennium Goal.
This success is primarily explained by the adoption of capitalism and the consequent increase in material wealth by China and India. These behemoths have transformed from countries characterized by extreme poverty to countries with large middle classes. There are costs to this progress, not the least of which is Global Warming.
Back in the United States, progress toward eliminating relative poverty remains and will remains like running on a treadmill. You make expend a lot of energy but never make any progress. As long as human nature is such that we determine our status by comparing ourselves to others, relative poverty will be with us. And human nature does not change.
Christopher A. Erickson, Ph.D., is a professor of economics at NMSU. He teaches undergraduate courses in economic development in which different concepts of poverty are a topic. The opinions expressed may not be shared by the regents and administration of NMSU. Chris can be reached at chrerick@nmsu.edu.