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The Public Interest
Number 89, Fall 1987
Pages 3 – 19

POVERTY & WELFARE—ANOTHER LOOK

In search of the working poor
CHARLES MURRAY

 
The American debate about poverty and public policy has always been grounded in the prevailing answer to the question, “Can any American who is willing to work hard make a decent living?” From the founding of the nation until the 1960s, the consensus answer among policymakers had always been “yes” with minor qualifications. During the 1960s, the policy consensus shifted to “no” and has remained there ever since. Poverty is largely structural, the new received wisdom has held; it is caused by barriers and culs-de-sac in the economy that will inevitably trap certain populations in poverty.

In recent years, the received wisdom has been given a twist, stated most clearly and with the best data in Years of Poverty, Years of Plenty by researchers at the University of Michigan using the Panel Study of Income Dynamics (PSID)-a longitudinal data base that began with a sample of some 5,000 American families in 1968 and has been continued through annual interviews since then.[1] The authors of Years of Poverty, Years of Plenty work to their conclusions from two new empirical findings made possible by a longitudinal data base. First, if we track the total income of American families over a long period of time, we find that a large proportion of the families experience a year or more in which that income falls beneath the poverty line. Second, we find that only rarely does the income of a poor family remain beneath the poverty line every year. To illustrate, if 0 represents a year of income below the poverty line and 1 represents a year of income above the poverty line, only a few poverty profiles of a decade will read 0000000000. Much more often, the profile of a low-income family over a decade will look something like 0101011101. Furthermore, the authors could find no way of clearly distinguishing these “temporarily poor” people from the population as a whole. “They were somewhat more likely to be black or to live in families headed by a woman,” they report, “but on the whole, the main difference between them and the rest of the population was simply that they had experienced one or two particularly bad years.”

The authors portray an America in which income rises and falls rapidly and steeply for unavoidable reasons. They conclude that poverty is not the lot of a permanent underclass, but for the most part a short-term situation into which many people fall and out of which they rise again. The authors close by quoting approvingly from an earlier study of the PSID:
[W]e may have been oversold on the Protestant Ethic and have refused to see the extent to which people are the victims of their past, their environment, luck, and chance. It is after all difficult to believe that there are not some situations where individual effort matters-in seizing opportunities for better jobs, moving to new areas, or avoiding undue risks. But for public policy purposes and for arguments about the extent to which one could reduce dependency in our society by changing the behavior and attitudes of dependent members, the findings certainly do not encourage expectations that such changes would make much difference.

One key conclusion of the structural argument-that poor individuals are not responsible for their poverty-remains intact, but a new charge is added: The American economy leaves large sections of those not poor vulnerable to sudden attacks of poverty. The logical policy implication drawn from this conclusion has been that generous income supports make an appropriate buffer against a turbulent and chancy economic system; it is not good enough that people simply go out and try their best to make a living.

As I read this analysis, I suddenly realized that my own experience was fodder for the authors' quantitative case. In the late 1960s I had been making a living and supporting a family, then went to graduate school, then resumed making a living. My poverty profile from 1969 to 1978, the years used for the poverty analysis in Years of Poverty, Years of Plenty, was 1100111111. Or if one started my overall income profile at 1971 and ended it at 1978, the years that the authors use for their analysis of income mobility, I was one of the Horatio Algers who struggled all the way from poverty to the top quintile of the American income distribution. My history exemplified the numbers reported in Years of Poverty, Years of Plenty. But the interpretation drawn from those numbers was completely inapplicable to me. I had never been thrown out of work—I left the labor force voluntarily. My economic improvement following poverty reflected nothing more than a predictable income trajectory for young men with a new professional degree. Perhaps most importantly, I had never really been poor. It only looked that way. Mightn't such realities explain much of the chaos reported in Years of Poverty, Years of Plenty?

I recently had the opportunity to examine the PSID from this perspective, as reported in more technical detail elsewhere.[2] Here I summarize one of the main results of that inquiry, half hopeful and half disturbing. The hopeful half is that poverty in America is seldom the result of uncontrollable events involving the economic system. I will argue that the old wisdom—that anyone who is willing to work hard can make a decent living—has much more truth to it than has recently been acknowledged. The disturbing half is that our current popular understanding of the poverty population may be very wide of the reality. I conclude with a proposal for clarifying the situation.



Focusing on adults on their own who try to work

The discussion focuses on the American labor market as a way of escaping poverty. I assume that people 65 and over are not expected in the normal course of events to be in the labor market. (I discuss the physically disabled below.) Otherwise, I assume that any person of working age does in fact have the choice of the labor market open to him or her. So while in one sense this discussion ignores a dominant source of poverty (the female-headed household where the woman is not in the labor market), in another sense the findings are at least pertinent to that population. The labor market is not an attractive short-term option to many such women (in some cases for very sound reasons), but the evidence about the labor market suggests that it is probably an excellent long-term one.

The data base I originally drew from the PSID consists of all persons in the PSID who in 1970 were either the head of household (excluding full-time students) or the spouse of a head of household and were between the ages of 20 and 64 inclusive-in other words, “adults on their own.” The follow-up period is the subsequent ten-year period 1971-1980. In the following discussion, I will sometimes omit the adjective “working-aged” for purposes of convenience, but it always applies.

To represent each subject's poverty profile over the years 1970- 80 in an easily scanned summary, the income for each of those eleven years was converted to a number ranging from “0,” representing an income below the poverty line, to “9,” representing an income of more than three times the poverty line. Each number from 1 to 9 represents an increment of 25 percent of the poverty line (e.g., “3” represents an income ranging from 151-175 percent of the poverty line). In effect, people with an income denoted by “9” are in the middle class (three times the poverty line for an average family of four in 1986 represented an income of more than $33,600).

Using this framework, I examined specific subpopulations of interest, in each case looking for patterns in case-by-case reconstructions. Three important notes about the presentation are that (1) all income figures are given in 1987 purchasing power, (2) all percentages refer to national proportions, using the PSID weighting system, and (3) the sketches used as illustrations are based on actual cases in public-use data tapes but have been converted to unrecognizable composites in compliance with the PSID's promises of confidentiality to its respondents.

The question: Given that a person is poor but in a household that is participating in the labor market, what happens over the next ten years?



The curious case of education

The obvious first way of disaggregating the dynamics was to examine poverty among populations with varying educational levels, and the attempt to do so brought forth the first notable finding. As of 1970, there was such a small problem of poverty among people with a basic education that it is difficult to analyze how it occurs and how it is escaped. Even with 4,702 cases in the data base, there is a scarcity of data. For example, one interesting source of patterns was thought to be college graduates. What happens to them after a spell of poverty? The answer is that poverty strikes so seldom that, among the 604 cases of working-aged adults in the PSID who were poor in 1970, only six, representing a national proportion of nine-tenths of one percent of the working-aged college graduates, were poor in 1970. None sank below the poverty line in 1980. One of the six, a person not in the labor market, experienced significant poverty in the intervening years. Only one other case exhibited even a single year of subsequent temporary poverty.

More surprisingly, the same obstacle-too few cases-impeded an analysis of poverty among that archetypical American family wage earner, the white high-school-educated male. The 604 cases of poor people in 1970 again included just six such cases, representing three-tenths of one percent of all such white males between the ages of 20 and 64. The situation is only slightly different for white women who had a high school degree or were married to someone with a high school degree. Only eighteen cases, representing 1.3 percent of that population, were poor in 1970. Of these women, only ten had worked at all in that year, and only two had worked more than fifteen weeks.

The small proportions of college and high school graduates who are involved in the analysis convey how easy it is to lose track of the poverty problem in our preoccupation with the people who are poor. Poverty does not strike throughout the American population like the flu; it is tightly concentrated. Even within populations we have become accustomed to thinking of as having serious economic problems with job insecurity (blue-collar workers with just a high school education, for example), the incidence of actual poverty (as distinguished from other kinds of economic problems) was extremely low, even during an economically lackluster decade.

This general observation applies most dramatically to the black population. In 1970, the Bureau of the Census showed that 30 percent of the black population was living below the poverty line. The PSID for that year showed 22 percent of working-aged black adults below the poverty line. These are extremely large proportions, as befits the central role that black poverty has played in the poverty debate. Contrast those figures with this one: Of working-aged black men in the PSID who had just a high school education, only 5 percent were poor. Even among black women, only 10 percent of those with a high school education were below the poverty line. I hasten to add that the black male figure should be interpreted as “married black males with a high school education,” for the PSID carries only a few single black males in that category. Nonetheless, such findings (which have been reached by others with census data on the incomes of black married couples and black full-time workers) bear emphasizing. For many years now, the severe black poverty problem has had little to do with blacks with a basic education, married blacks, or blacks who remained continuously in the labor market. If in 1970 the black poverty rate had equaled that experienced by blacks who had finished high school, it would have been more than a percentage point lower than the overall poverty rate among American whites.

The more general statement is that poverty among the working-aged in 1970 was a phenomenon among people with less than a high school education, who constituted a remarkable 75 percent of working- aged adults below the poverty line.[3] That most poor people are ill-educated does not mean that most ill-educated people are poor. On the contrary, 90 percent of them were not poor in 1970, 90 percent were not poor in 1980, and 84 percent were not poor in either year. But three out of four people who were poor came from that group.



The curious case of disability

Another obvious dimension for analyzing poverty among the working-aged is physical disability. Disability itself is closely associated with poverty: 36 percent of the poor in 1970 reported that the head of household suffered a disability that affected both the kind and amount of work he or she could do. Among those poor who were not disabled, to what extent is subsequent poverty a function of subsequent health misfortunes? The answer is that, among those who had no disability in 1970 and had been in the labor market, 13 percent were reporting a major disability by 1980. This argues for the importance of disability in formulating policy toward the poor, and must be remembered as a qualifier when assessing the reliability of the labor market. If you are poor and in the labor market, these data say, there is a one-in-eight chance that you will be impeded from remaining in the labor market over the next decade because of physical handicap.

But once again, an obvious question produced curious results. Almost nine out of ten persons who were both poor and disabled in 1970 (88 percent) also happened to come from that same ill-educated population that dominated the ranks of the poor. A variety of hypotheses explain why this might be so. For example, the ill-educated and poor tend to work at manual labor, and manual labor tends to produce physical ailments. Or they received inferior health care. Or the reason they got less than a high school education was related to mental or emotional deficiencies that also tend to produce (or not to prevent) physical disabilities. Or they said they were disabled to avoid the responsibilities of work or to get disability benefits.

Whatever the combination of explanations might be (and some good empirical work on the subject is needed), the initial concentration of physical disability among the ill-educated is compounded by what happened between 1970 and 1980. Of those among the poor who did not have a disability in 1970 but had acquired one by 1980, 81 percent of the newly disabled persons had less than a high school education. The net result is that the person with a high school degree or more who was physically disabled and poor in 1970 was rare (0.3 percent of adults with high school education or better), and the educated, poor, able-bodied person in 1970 who left the labor market because of a physical disability over the course of the decade was even rarer. As I discuss the dynamics of subsequent poverty among those who stayed in the labor market, the bare statement about disability is that of those who were able-bodied and in the labor market in 1970, almost 13 percent were reporting a major disability in 1980. The more complete statement is that this form of misfortune remains a curiously selective affliction of the ill-educated, and that something more complicated than the hand of fate is involved.




Trying to understand subsequent poverty among working people

The preceding discussion establishes that whenever we talk about working-aged people below the poverty line we are talking about an extremely small minority of the American population, and that this small minority is itself systematically concentrated among a particular sub-group. For most purposes, the case for the labor market is already made. We may try to imagine, for example, setting up goals for an economic system that was being devised from scratch. Only the most optimistic would set standards of success as demanding as those reflected in the numbers just presented. But there remains the periodic, temporary poverty that Years of Poverty, Years of Plenty emphasized, which was the initial subject of my inquiry. The conclusion I take from a reconstruction of cases in the PSID is that an unknown but large portion of people listed as being “below the poverty line” are not living in poverty. What appears to be “temporary poverty” is often no such thing, and the precipitous ups and downs are often statistical rather than a reflection of real changes in quality of life.



The Mississippi fallacy

How can one hypothesize that large numbers of people below the poverty line are not really poor, when (it is widely argued) the current poverty line is far too low? Three general factors are at work. Let me preface them by noting a general problem that has deformed our image of the poor.

When staff members from CBS News or the New York Times Magazine or a congressional investigating committee want to do a feature on poor people, they do not sample randomly from the population below the poverty line. Since their topic is real poverty, not official poverty, they quite sensibly search out people who fit the description of people who really are “living in poverty,” and any Human Services Department in almost any county can readily give them a few vivid examples. Thus when poverty among the aged appears on the television screen, it tends to consist of a single elderly woman isolated in a tiny room in a big city. A poor child is an ill-clad waif playing amidst trash heaps. A poor rural person lives in a tar-paper shack—peculiarly often in Mississippi (hence the label for the fallacy). These people are indeed “typically” poor in the conceptual sense of impoverishment—misery is an essential part of our understanding of what genuine poverty should mean.

But we tend to reify poverty on the basis of such images, and then assume that the poverty index identifies the same population—a logical leap that no one familiar with the problems of measuring poverty would make. Real, unquestioned poverty exists in the United States and in the cases of the PSID, and nothing that I am about to say is intended to belittle that reality. But when cases are pulled from the pool of people whose only qualification is that they are below the official poverty line, a much different distribution of portraits emerges.

The following cases are presented as illustrations. I continue to focus on the working-aged and the question of ability to make a decent living. Remember that all dollar figures are given in terms of 1987 purchasing power.



People in small towns and rural areas

The poverty profile for Mr. and Mrs. A is 00001011330. This husband and wife were in their mid-thirties in 1970. He had a grade school education; she finished junior high. That opening year, he worked full time, she worked 1,200 hours, and still they brought in an income of only $7,000. Mr. and Mrs. A had two years in the late 1970s when they escaped near-poverty, but that was a brief respite. They both worked in 1980, but they were once again poor.

Mr. and Mrs. A seem to be a classic case of the working poor: They plugged away, almost got out of poverty, had a few better years, but slid back into poverty even though they continued to work. Now consider part two of the profile, remembering that they both lived throughout this period in a rural area (meaning a town of fewer than 10,000 people or the countryside itself).

Following that first year in which they made only $7,000, Mr. and Mrs. A are shown by the poverty index as being constantly in poverty or near-poverty for the next seven years. But during those same years they brought home an average income of $16,000 (excluding the more prosperous years of 1978-79). In 1980, when they were again shown as having fallen into poverty, they made $14,000. Mr. A owned three working vehicles, including two trucks that he used as part of his business. Mr. and Mrs. A also owned their own home free and clear, a five-room house that the PSID interviewer gave the highest ratings for neatness and condition.

The case illustrates many of the ways in which reality can diverge from the image of poverty, but the one I want to stress here is that the income brought in by this “poor” family was not being spent in a large city but in rural America. These are very different worlds, and yet the definition of the poverty line is precisely the same for the people in both.[4] It is perhaps the most egregious of the several computational inadequacies of the poverty index. As anyone who has lived in both a small town and a city can testify, the differences in the costs of enjoying “a decent existence” are great.

A few of these differences are measurable in dollars. In Denison, Iowa, for example, a town of 6,700 chosen because it happens to represent the national average for housing rental in small towns, the median monthly rent for a residence in 1980 was $290 (in 1987 dollars). In Manhattan, the equivalent median was $367. This represents a 27 percent difference in one of the key costs of living. Apart from that, the housing costs in Denison and Manhattan are likely to be different because people in small towns, including low-income people, own their own homes more frequently than people in big cities. Married couples (who in 1970 constituted 71 percent of the small-town and rural poor) own their own homes more frequently than single people (who constituted 56 percent of the large-city poor). A couple that in a small town has earned Mr. and Mrs. A's income for thirty years is likely to be paying no mortgage, while a couple earning the same income in Manhattan will probably still have to worry about rent.

But these adjustments and similar adjustments in food and other basic costs are still measured in dollars, and dollars fail to capture the real difference between Manhattan and Denison in the cost of living a decent life. What the average rent does not tell you is how big the rooms are, whether there is a yard for the children to play in, what the place looks like and smells like and how many rats inhabit it. Perhaps even more importantly, the average rent does not tell you what the street outside the front door is like, what the neighbors are like, what the schools are like, and whether you can safely go for a stroll after nightfall.

Among the entire population of the working-aged who were poor in 1970, 30 percent were living in towns of fewer than 10,000 people and another 15 percent were living in small towns (not parts of metropolitan areas) of 10,000-25,000 people.



Poor people with many children

The case of Mr. and Mrs. A could be repeated here as well: They had four children, which is one reason why their real income could be substantial and yet leave them in near-official poverty. Let us add to that a very different kind of sketch involving children:

Ms. B has a poverty profile of 01022100101. She lives in an inner-city neighborhood, making between $10,000 and $13,000 a year. She remained in or near poverty because she had five children. Four of these children were already of working age in 1970 (ages 18-23) and the fifth was 15. At least three of the five were living with her at any one time throughout the decade. But none of the children worked regularly; indeed, they almost never worked. In addition, one of the daughters had a child of her own who was added to the household.

The poverty index is pegged to the number of people in the household. This makes sense: Children cost money, hence a flat “poverty income” is unrealistic. But it can also lead to nonsensical results. For example, it is possible for a person to have an income of $5,500 and be classified as “not in poverty,” then over a period of years increase his income to $22,000—quadruple his real income—and in the poverty statistics be shown as one of those people who has slid from “not in poverty” to “in poverty.”

Three points are to be made about poverty and number of children. One again has to do with the insensitivity of the poverty index to the difference between living in different types of communities. In the inner city, the marginal cost of a child is probably as great as or greater than the index suggests. Few low-income people in a city have an apartment with extra space in which new children (or aged parents or indigent siblings) can be put without crowding the others. But it happens quite often in rural areas that a family with a low income lives in a house with extra rooms, or one in which a new child means nothing worse than converting a one-child bedroom into a two-child bedroom. Hardly anyone in a city has the option of holding down the family's food costs by starting a garden in the back yard, or buying food directly from the farmer; many people in small towns and rural areas have such options (and exercise them).

The failure of the poverty index to take differential cost of living into account also gives the large family in a small town an increasingly larger “discretionary surplus” as family size increases. Suppose (to use a simplified calculation  for purposes of illustration) that the cost of a standard food basket is 25 percent higher in Manhattan than in Denison, that in Manhattan it costs $2,000 to feed a couple and $500 to feed each marginal child, and that a standard “food index” is based on the Manhattan costs. The “food index” thereby gives a two-person family in Denison a $400 bulge (money that the Denison family can spend on something else). But when there are six children, the food index has grown to $5,000-and the bulge has grown to $1,000, money that the family in Manhattan is spending on food but the family in Denison (which eats just as well) is devoting to other needs (which are also less expensive in Denison than they would be in Manhattan), and so on. The more children, the greater the discrepancy between the purchasing power of a poverty- level income in the big city and that in the small town.

The second point involves the child as a “revealed preference,” in the language of some economists. If a family was making $13,100 last year, barely above the poverty line, then this year gets a raise to $14,100 and a new baby as well, the odds are good (one would like I to think the odds are high) that the couple is celebrating both the raise and the baby, even as a researcher is marking them down as having fallen into poverty (because the poverty threshold with the extra child has risen to $14,969). Let us say that the next year they get another $1,000 raise and again are above the poverty line. Their poverty profile for the three years has been 101: they were “temporarily poor.” But they chose to be poor—or more accurately, they chose to have a child, and unbeknownst to them became poor. Compare their psychological position to that of another family who had been making $13,100, didn't have a new baby, and got a $1,000 pay cut to $12,100, which remained there for still a third year. The way that the poverty thresholds happen to fall, they did not retreat (statistically) into poverty-their poverty profile for the three years is 111-but they are also very likely (with good reason) to feel as if they are going backwards, failing, and living more poorly in the second two years than they did during the first year.

The third, related point involves the explicability of poverty and the role of the economic and social system. The case of Ms. B is apt. A single adult who makes an income of $10,000 (for example) has it within her capacity to live a life that is not “impoverished.” Low-income, yes; impoverished, no. Ms. B will be able to do it in the Denisons of America much more easily than in its Manhattans, but she can do it. In that sense, it is incorrect to say that a working person who brings home an income of $10,000 but nonetheless is beneath the poverty line “cannot make a decent living.”

The question rather is what society considers to be a reasonable family wage. Should any working person acting as the sole provider be able to support a spouse above the poverty line? A spouse and a child? A spouse and two children? Should he be able to do it at the age of 18? Should he have to expect to wait until he has “gotten settled” (a quaint, bygone concept) and is able to support a family? All these are questions that will be answered differently by different people. But (at some number of children that I will not try to specify) we should stop confusing the poverty of people who have continued to have children with the poverty of people who “cannot make a decent living” by working. And when Ms. B's children continue to live in the house year after year without contributing significantly to the family's coffers, the system is not failing. Ms. B is making choices—one may or may not think them wise, but they are recognizably her choices.

Among working-aged people below the poverty line in 1970, 34 percent had four or more children in the house. Of these, more than half had six or more.




Older people who retire early

Mrs. C's profile is 99999993100. Mrs. C, aged 55 in 1980, was widowed during the 1970s. In the two years after Mr. C's death, her income plunged from the $47,000-$50,000 range to below the poverty level, less than $4,000 per year, where it remained through 1980.

To this point I have been discussing subsequent poverty among those who were poor in 1970. Mrs. C's story, and the third perspective from which temporary poverty must be reassessed, involves those who are poor, able-bodied, and making no visible effort to escape their poverty.

According to the numbers, Mrs. C looks like a case study in how poverty has become feminized. She was married to a man with a middle-class income who died and left her without an income. She went from prosperity to poverty. But it turns out that Mrs. C has a college degree and used to work as an accountant. (Her own labor income in 1970 was $27,000.) She continued to work for one year after her husband died, then stopped. As of 1980 she was living in a small town, listed no disability, received no welfare or social security income, and, despite being only 55 years old, termed herself “retired.” She continued to live in the paid-off family home in this small town, and, as far as one can tell from the variables in the PSID, continued to live the same life she had lived when her husband was alive.

Two aspects of life in one's fifties and thereafter make such outcomes not only possible but also fairly common. One is that the requirements for income drop sharply when the children are through school, the house is paid for, the car still works, and one has acquired all the sofas, lawn mowers, neckties, and toaster ovens—the material infrastructure of daily life—that one needs. The second is the accumulation of assets. A widow has a modest stock portfolio, for example; she sells a hundred shares of something when she needs extra cash, the portfolio grows enough to offset her occasional sales, and she keeps this up until she dies. The money from the hundred shares never gets reported as income.

The correction of such errors does not lie in improving the adjustment for cost-of-living for the elderly. I could also draw a composite from the PSID whose age, marital situation, and 1980 income are identical to Mrs. C's, but who is frequently ill, has no medical insurance, no inheritance, must rent an apartment in a large city, and is living in desperate poverty. There is no way to construct an across-the-board cost-of-living adjustment that will discriminate between the comfortable and the destitute.

Among those who were poor in 1980, not disabled, and had reached the 55-64 age bracket (that is, were still below the normal retirement age), 24 percent listed themselves as retired and 26 percent listed themselves as housewives not in the labor market. Of this group, 78 percent had not been poor in 1970. Thirty-eight percent had been making more than three times the poverty threshold in 1970.




Betting on the labor market

Can any American who is willing to work hard make a decent living? Even if we adopt a loose definition of “working poor,” including not just people who worked nearly full-time but those who worked at all in 1970, the numbers suggest how difficult it is to remain in the labor market and nonetheless continue to be poor. These are the summary numbers:

Of the population of working-aged adults in 1970, 95 percent were not poor. In almost half of the remaining cases, the head of household either was not in the labor market or had a substantial physical disability. This leaves 2.7 percent of working-aged adults who could be classified as living in “working poor households,” if we use an inclusive definition that accepts anyone in a household where the head of household worked at least one hour in the preceding year and was not substantially disabled. Of these:
What happens to a population of able-bodied working poor persons during their subsequent working years? Of those who had worked, or were the spouse of someone who worked, and were of working age (under 65) throughout the follow-up period, by 1980:
Among the still-poor 15 percent-those members of the working-aged population who had been able-bodied working poor in both 1970 and 1980, and were still in the labor market and poor in 1980 (who represent three-tenths of one percent of the total working- aged population):
These last percentages are based on only thirty-six cases out of the original 4,702, so the percentages must be assumed to be unstable.




Making sense of the numbers

Poverty is the elephant of social policy, with social scientists playing the role of the groping blind men. We each describe a different appendage without really contradicting one another. In this case, I have asked a specific question regarding people who are in the labor market and reached the conclusion, using the same data base that was used to portray the America of Years of Poverty, Years of Plenty, that it is extremely rare for a person to get into the labor market, stick with it, and remain poor. It is quite common for the rare person who is both working and poor not only to escape poverty but to reach the median income range or higher within a few years and remain there securely. Suppose, however, I had made just one different assumption, that people who are not in the labor market are discouraged workers, out of the labor market only because they know there are no jobs (or only “dead-end” jobs). Presto: The portrait can be made to flip completely, and the nation becomes once more a country with structural poverty woven inextricably throughout the economy.

The sort of analytic ping-pong represented by these contradictory descriptions of the numbers must somehow be diverted into a more productive dialogue. The policy implications of the different interpretations are too important, and too contradictory, to be based on the shadowy quantitative sketches available to us. By the same token, however, qualitative summaries of case-histories leave far too much room for selective interpretation in such politically-charged topics, no matter how pure the good faith of the investigator. What is needed first is not more analysis, but better data.

Let me suggest a proposal, and not an impossibly expensive or of time-consuming one. Suppose that someone took a nationally representative sample such as the PSID and identified in that pool all the persons who were officially below the poverty line. Suppose that a team of interviewers armed with an interview protocol based on open-ended conversation (many established techniques are available) went out and tape-recorded interviews with an appropriately selected sample of a few hundred poor people, who were asked the kinds of questions that the numbers cannot answer. Let me emphasize that I am not advocating ethnographic research, but rather using low- income people as accurate reporters of qualitative information about themselves. In addition to the conversational interview, the research team would collect the standard close-ended items about income, occupation, and demographics. Then suppose that the verbatim transcripts of these interviews, including all of the interviewer's questions and comments, cleansed only of material that would compromise the subjects' anonymity, were made available for scholarly use in the same way that the PSID is available.

Based on my reading of the PSID, I am predicting that such a data base will force major revisions in the received policy wisdom. We will have to slash the accepted count of poor people, if by “poor people” we mean “people without the material resources to live a decent existence.” A more specific prediction is that the estimates of rural and small-town poverty among whites will drop sharply. It will be found that year-to-year income shifts seldom mean much—that the trajectory of “standard of living” is far smoother than the year-to-year income figures suggest. What about the disabled? No one knows what the figures concerning them really mean; this will be an opportunity to find out.

The overarching revision in the received wisdom will be in the image of the poor as victims. Some are victims, without question. But a great many people below the poverty line (I will go out on a limb and predict a majority) will be seen as living lives that they choose to live. The most numerous will be people who reveal that they don't consider themselves to be living impoverished lives, even though their income puts them below the federal poverty line. But the PSID data also indicate that most of those who do consider themselves to be poor have an option open to them for increasing their income-the labor market-that they are not using, or are using only sporadically. In still other cases, idiosyncratic decisions (like Ms. B's choice to let her adult, idle children live with her) will be at work.

No data will be able to resolve the question of personal responsibility versus environment or genes. But as matters stand, the policy debate is founded on images of people who are poor for reasons like the following: because they cannot work or cannot find work, because they work at jobs that never allow them to rise above the minimum wage, because they are plunged into poverty by unforeseeable disasters. These images, I am arguing, cannot withstand a rich qualitative data base about the officially poor. In any event, two undoubted goods will come from amassing such a data base. One will be to provide the policy debate with a frame of reference that we will come closer to arguing about people rather than abstractions. The other will be to remind social scientists and politicians alike of how little poverty has to do with income.






Footnotes

1. Greg J. Duncan with Richard D. Coe, Mary E. Corcoran, Martha S. Hill, Saul D. Hoffman, and James N. Morgan, Years of Poverty, Years of Plenty: The Changing Fortunes of American Workers and Families (Ann Arbor, Michigan: Institute for Social Research, 1984).

2. Charles Murray and Deborah Laren, According to Age: Longitudinal Profiles of AFDC Recipients and the Poor by Age Group (Washington, D.C.: American Enterprise Institute, September 1986), from which material in this article has been adapted. I am grateful to Greg Duncan, co-director of the PSID and lead author of Years of Poverty, Years of Plenty, for his encouragement and many substantive contributions throughout the effort.

3 In subsequent years, Current Population Survey (CPS) data show that the proportion of people getting high school degrees has risen sharply, making possible indirect analyses of what caused the relationship between a high school degree and low poverty in 1970. (Was it self-selection? Education? Credentialing?) The short answer (again using CPS data) is that the proportion of persons with less than a high school education who are not in poverty (about 80 percent by the CPS's method of counting) remained fairly constant from 1975-1985, declining very slightly overall, while the percentage of the poor who come from the group fell rapidly. The implication is that it is about as easy as ever for the ill-educated to make a living above the poverty line, but that the persons now drawn into the high school degree pool are not acquiring the same level of protection against poverty that a high school degree used to represent-a combination of trends with intriguing implications that are too complicated to explore here.

4. Until 1980, thresholds for farm families were 85 percent of the threshold for non-farm families. There has never been an adjustment for people living in small towns or in the countryside who are not farmers.