Rich and Poor

Our federal government classified me as poor when I moved to Maine in August, 1977. My family of four was “under the poverty line” according to their way of measuring things. I had just taken a job as Director of Special Education for Maine School Administrative District #72 in Fryeburg at an annual salary of $9200. With four individuals to feed, clothe, and house, our federal government said I was poor and eligible for lots of programs which we didn’t use. That our daughter, Annie, was still in utero portended deeper “poverty” when she was to be born in December. Then our son, Ryan, came along five years later when my salary was still about the same. As a family of six, we must have gone from poor to very poor in the eyes of government.

 

Rather than take assistance from taxpayers, I chose to take on additional work. For most of my teaching career, I carried two or three part-time jobs as a caretaker, a writer, and a ski instructor — working all four simultaneously during several of those years. After all the kids were in school, my wife took on various part time jobs as well. She waitressed, cleaned houses, and drove a school bus before going back to school herself to become a therapist. She’s been doing that for almost twenty years, the last five or so part time. Each of us now works the equivalent of a half time job — roughly twenty hours a week. Now our federal government considers me rich because our combined household income is in the top quintile according the census statistics. I don’t worry about bills because my wife and I made it a priority to pay them off some time ago.

Ours is a common story. The “poor” don’t remain poor unless they stay on government programs. If they work, they often become “rich.”

Angus Deaton

Why tell you all this? Because it was announced last week that Princeton University’s Angus Deaton was awarded the Nobel Prize for Economics, in part because of his work measuring poverty. I didn’t expect to agree with Deaton on much considering the Nobel committee awarded a previous economics prize to Paul Krugman, but I looked him up anyway and found his observations quite reasonable. The first thing I came to was a 2003 essay he wrote called “Measuring Poverty.” In it, Deaton writes:

“Everyone has some idea what poverty is, and most people have little difficulty answering the question, ‘Do you consider yourself poor?’ although some people need a moment or two to think about it. Nor do people find it hard to answer the same question about their neighbors or other people that they know. Yet these simple ideas turn out to be hard to extend to countries, and harder still to the world as a whole.”

International agencies like the United Nations and the World Bank work mainly to mitigate poverty rather than spur economic development. Doing so, they allow local people to self-identify according to Deaton and that’s a problem, he says: 

“…It is not possible to push this local poverty identification too far. If the sums to be distributed are large enough, they become worth misappropriating, and there is an incentive for people to identify their friends and relatives (or themselves) as poor. Similarly, some NGOs have discovered that, if they use the poverty identification to enroll people into employment or training schemes, then after a few visits everyone is reported to be poor.”

I would point out here that in local school districts there is a similar phenomenon — applications for free and reduced lunches sent to each family each September are not vetted. I’ve asked people in at least three Maine districts and none vet the applications. They don’t check to see if families fudge their income/assets because the district qualifies for lots of additional federal and state aid based on percentage “qualifying” for free or reduced lunch.

When I was teaching economics, we found it necessary to define poverty. Students and I agreed that one is poor if he lacks sufficient funds to purchase food, clothing, shelter, and medical care to sustain life. We also agreed that someone is rich if he has enough for those basic needs — and some left over. He’s a little rich if he has a little left, and very rich if he has a lot left.

There’s another definition on which my wife and I agree: We’re rich, not just because we have everything we need and some left over, but also because we have everything we want — everything that money can buy, at least. Some may say our wants are modest and maybe they are, but they’re ours. They were established during lean times when our family was young and they haven’t changed much. We learned to live on less and haven’t forgotten how. We learned to be happy with what we have, and that became the habit of a lifetime.