Income vs. consumption

More perspective on the economy from James Q. Wilson:

Poverty in America is certainly a serious problem, but the plight of the poor has been moderated by advances in the economy. Between 1970 and 2010, the net worth of American households more than doubled, as did the number of television sets and air-conditioning units per home. In his book “The Poverty of the Poverty Rate,” Nicholas Eberstadt shows that over the past 30 or so years, the percentage of low-income children in the United States who are underweight has gone down, the share of low-income households lacking complete plumbing facilities has declined, and the area of their homes adequately heated has gone up. The fraction of poor households with a telephone, a television set and a clothes dryer has risen sharply.

In other words, the country has become more prosperous, as measured not by income but by consumption: In constant dollars, consumption by people in the lowest quintile rose by more than 40 percent over the past four decades.

Income as measured by the federal government is not a reliable indicator of well-being, but consumption is. Though poverty is a problem, it has become less of one.

via Angry about inequality? Don’t blame the rich. – The Washington Post.

So how can consumption go up while income goes down?  One answer is debt, which is bad.  The other answer is that prices of what were once luxuries have gone down, putting them within the reach even of people with low incomes.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • http://www.caryschwarz.com saddler

    Will Rogers predicted that our country would be the first to see folks go to the poor house in an automobile.

  • http://www.caryschwarz.com saddler

    Will Rogers predicted that our country would be the first to see folks go to the poor house in an automobile.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Dysfunction is not poverty. Low income people are more likely to be dysfunctional. We call it poverty because we are uncomfortable blaming them for their own problems. But they are indeed the source of their own problems. So, why is that? It is probably organic. The rest of us can increase their consumption by giving them stuff, but we can’t make them more competent or productive. So, should we define poverty as marginally productive to unproductive?

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Dysfunction is not poverty. Low income people are more likely to be dysfunctional. We call it poverty because we are uncomfortable blaming them for their own problems. But they are indeed the source of their own problems. So, why is that? It is probably organic. The rest of us can increase their consumption by giving them stuff, but we can’t make them more competent or productive. So, should we define poverty as marginally productive to unproductive?

  • Klasie Kraalogies

    I think Will Rogers had a point. Remember, cataclysmal thinking is always the fashion, and every year is always the worst year on record, blah blah blah. But I often think that one of the most underrate Bible verses is:

    Say not, “Why were the former days better than these?” For it is not from wisdom that you ask this.

    Ecclesiastes 7:10

  • Klasie Kraalogies

    I think Will Rogers had a point. Remember, cataclysmal thinking is always the fashion, and every year is always the worst year on record, blah blah blah. But I often think that one of the most underrate Bible verses is:

    Say not, “Why were the former days better than these?” For it is not from wisdom that you ask this.

    Ecclesiastes 7:10

  • Steve Billingsley

    Klasie,

    That is absolutely spot-on. I will have to remember that.

  • Steve Billingsley

    Klasie,

    That is absolutely spot-on. I will have to remember that.

  • DonS

    “So how can consumption go up while income goes down? ”

    Another answer is that the government arbitrarily excludes most government benefits from their measure of income.

  • DonS

    “So how can consumption go up while income goes down? ”

    Another answer is that the government arbitrarily excludes most government benefits from their measure of income.

  • –helen

    The guy who goes to the poorhouse (except no such thing exists) in an automobile will have a taxpayer provided cell phone in his hand!

  • –helen

    The guy who goes to the poorhouse (except no such thing exists) in an automobile will have a taxpayer provided cell phone in his hand!


CLOSE | X

HIDE | X