Commentary

Walter Williams: If US Poor Were a Nation, It Would Be One of World's Richest

By Walter E. Williams | June 2, 2020 | 10:14am EDT
The American flag swirls in the wind. (Photo credit: Brett Carlsen/Getty Images)
The American flag swirls in the wind. (Photo credit: Brett Carlsen/Getty Images)

Imagine that you are an unborn spirit in heaven. God condemns you to a life of poverty but will permit you to choose the country in which you will spend your life.

Which country would you choose?

I would choose the United States of America.

A recent study by Just Facts, an excellent source of factual information, shows that after accounting for income, charity, and noncash welfare benefits such as subsidized health care, housing, food stamps, and other assistance programs, "the poorest 20 percent of Americans consume more goods and services than the national averages for all people in the world's most affluent countries." This includes the majority of countries that are members of Organization for Economic Co-operation and Development, including its European members. The Just Facts study concludes that if the U.S. "poor" were a nation, then it would be one of the world's richest.

As early as 2010, 43 percent of all poor households owned their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio. Eighty percent of poor households have air conditioning. The typical poor American has more living space than the average non-poor individual living in Paris, London, Vienna, Athens and other cities throughout Europe. Ninety-seven percent of poor households have one or more color televisions — half of which are connected to cable, satellite, or a streaming service. Some 82 percent of poor families have one or more smartphones. Eighty-nine percent own microwave ovens and more than a third have an automatic dishwasher. Most poor families have a car or truck and 43 percent own two or more vehicles.

Most surveys on U.S. poverty are deeply flawed because poor households greatly underreport both their income and noncash benefits such as health care benefits provided by Medicaid, free clinics, and the Children's Health Insurance Program, nourishment provided by food stamps, school lunches, school breakfasts, soup kitchens, food pantries, the Women, Infants & Children Program, and homeless shelters.

We hear and read stories such as "Real Wage Growth Is Actually Falling" and "Since 2000, Wage Growth Has Barely Grown." But we should not believe it. 

Ask yourself, "What is the total compensation that I receive from my employer?" If you included only your money wages, you would be off the mark anywhere between 30 percent and 38 percent. Total employee compensation includes mandated employer expenses such as Social Security and Medicare. Other employee benefits include retirement and health care benefits as well as life insurance, short-term and long-term disability insurance, vacation leave, tuition reimbursement, and bonuses. There is incentive for people to want more of their compensation in a noncash form simply because of the different tax treatment. The bottom line is that prior to the government shutdown of our economy in the wake of the coronavirus pandemic, Americans were becoming richer and richer. The question before us now is how to get back on that path.

Speaking of the COVID-19 pandemic, Just Facts has a couple of interesting takes in an article by its co-founder James D. Agresti and Dr. Andrew Glen titled "Anxiety From Reactions to COVID-19 Will Destroy At Least Seven Times More Years of Life Than Can Be Saved by Lockdowns."

Scientific surveys of U.S. residents have found that the mental health of about one-third to one-half of all adults has been substantially compromised by government reactions to the COVID-19 pandemic. There are deaths from non-psychological causes, such as government-mandated and personal decisions to delay medical care, which has postponed tumor removals, cancer screenings, heart surgeries, and treatments for other ailments that could lead to early death if not addressed in a timely manner. Interestingly and sadly enough, New York state enacted one of the strictest lockdowns in the U.S., but has 22 times the death rate of Florida, which had one of the mildest lockdowns.

As I pointed out in a recent column, intelligent decision-making requires one not only to pay attention to the benefits of an action, but to its costs, as well.

Walter E. Williams is a professor of economics at George Mason University.

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