Poverty in America is no dishwasher

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Source: What does it mean to be poor today? – CapX.

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Has family poverty halved over the last 20 years?

net of housing costs family poverty

According to Brian Perry, the the expert at the Ministry of Social Development writing in last year’s Social Report:

The primary measure is the proportion of people in households with equivalised disposable income net-of-housing-costs below a threshold set at 50 percent of the 2007 household disposable income median – and held fixed in real terms (the 2007 anchored or constant value measure, CV-07).

This measure shows whether the incomes of low-income households are rising or falling in real terms, irrespective of what is happening to the incomes of the rest of the population.

The two other measures use fully relative thresholds set at 50 and 60 percent of the current year’s household disposable income median net-of-housing-costs (REL 50/60). These measures reflect how low-income households are faring relative to middle-income households.

Diffusion of consumer durables to poor American households since 1984

We do not have air-conditioning. Do not know many people who do but New Zealand does have a temperate climate. But if you are down and out in America you still have air-conditioning.

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Sources: The Economic Condition of Poor Americans (and the rest of us) Continues to Improve – Coordination Problem and Well-Being – Extended Measures of Well-being: Living Conditions in the United States, 2011 – People and Households – U.S. Census Bureau.

In the 2000s, dishwashers, air conditioning and microwaves were still diffusing rapidly in poor households in addition to the usual digital goods.

To make it even worse, despite the ravages of the 1996 US federal welfare reforms and a top 1% who apparently kept for themselves 90% of all income gains since the 1970s, air-conditioning in poor houses increased by 50% or so between 1994 and 2004.

Imagine how many more poor households would have dishwashers, air-conditioning, microwaves and digital goods but for the top 1%. Not that many actually because most of them already have those consumer durables despite their income not increasing for several decades.

I always puzzle over these who claim that incomes of ordinary families have not increased since the 1970s because that implies you can only buy the same basket of goods and same quality of goods as in the 1970s. That is what no real income growth means. You cannot buy more than before.

Fast Car – Tracy Chapman: the trap of intergenerational poverty

Poverty in America after 20 years of welfare reform

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Source: Did Welfare Reform Increase Extreme Poverty in the United States?

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Source: Did Welfare Reform Increase Extreme Poverty in the United States?

Doug Allen on same-sex divorce

Doug Allen argues that marriage is an institution designed and evolved to regulate incentive problems that arise between a man and a woman over the life cycle of procreation.

The real problem with same-sex marriage is same-sex divorce according to Allen. Marriage includes a set of exit provisions in terms of the possible grounds for divorce, rules for splitting property, alimony and child support rules, and custody rules. Allen also argues that:

  1. Many institutional rules within marriage are designed to restrict males from exploiting the specific investments women must make upfront in child bearing;
  2. Since same-sex marriages are not based as often on procreation, these restrictions are likely to be objected to and challenged in courts and legislatures;
  3. To the extent divorce laws are changed, they may hurt heterosexual marriages, and women in particular; and
  4. Given that same-sex relationships are often made up of two financially independent individuals, there will be litigation and political pressures for even easier divorce laws since the problem of financial dependency will be reduced.

Alterations in divorce laws to deal with issues of same-sex divorce necessarily apply to heterosexuals, and these new laws may not be optimal for heterosexuals, making marriage a more fragile institution for them. The actual outcomes of no-fault divorce laws, as an example, could hardly have been more different than what was expected and intended. The most obvious outcome was large increases in divorce rates.

No fault divorce laws influenced the rate at which women entered the workforce, the amount of hours worked in a week, the incidence of spousal abuse, the feminisation of poverty, and the age at which people married. No-fault divorce influenced a series of other laws related to spousal and child support, child custody, joint parenting, and the definition of marital property.

Marriage may provide a poor match for the incentive problems that arise in the relationships of gay and lesbian couples. Doug Allen is also of the view that putting all three relationships under the same law could lead to a sub-optimal law for all three types of marriages.

Allen in summary argues that marriage is an economically efficient institution moulded around the long-term interdependencies of child-rearing heterosexuals. He argues that homosexuals wishing to marry would be better served by a separate, gay-specific form of marriage.

I forgot to mention second wives clubs which lobby for limits the length of time of alimony to the first wife. The British 2nd Wives club in their legal advice page starts with these points:

  • Do you need to disclose your income or assets to an ex-wife?
  • Should your income be taken into account when assessing child maintenance?
  • Should child maintenance change when you and your husband have children of your own?

2nd wives clubs are natural allies for higher income gay divorcees wanting to pay less alimony. Nothing I have sent here is an argument against same-sex marriage willing as long as you are willing to live with the fact that it may have a few unintended consequences.