By: Tim Worstall
March 3, 2016

The idea that half of all American children are in poverty or near being in poverty is not one that we’d really be comfortable entertaining. It would show that our society isn’t taking care of the most vulnerable people within it for example. And that’s what a new report now tells us: that half of American children are either in or near being in poverty. Thus this is a terrible indictment of how society is organised.

Or, you know, perhaps not? Because it does rather depend upon what we define as poverty and even more perhaps upon what we define as near poverty. And the definition actually used here is one that means that pretty much inevitably we’re going to be defining half American children as being in poverty or near it. On the basis that the definition of what is “near poverty” is also really very close indeed to median household income. And, for those who don’t get Garrison Keillor’s joke, median income is where we expect half the households in the country to have an income higher than and half lower than. Thus if children were equally distributed across households (they’re not) and we define near poverty as being median income, then by definition half of all children will be in near poverty.

And that is exactly what this new report does:

Nearly half of children in the United States live dangerously close to the poverty line, according to new research from the National Center for Children in Poverty (NCCP) at Columbia University’sMailman School of Public Health. Basic Facts about Low-Income Children, the center’s annual series of profiles on child poverty in America, illustrates the severity of economic instability and poverty conditions faced by more than 31 million children throughout the United States. Using the latest data from the American Community Survey, NCCP researchers found that while the total number of children in the U.S. has remained about the same since 2008, more children today are likely to live in families barely able to afford their most basic needs.

Sounds terrible if not even spooky, doesn’t it?

However, perhaps the first thing we should say about these numbers are that they are working from market incomes. In more detail, that’s any cash income from whatever work might be done in those households, plus cash welfare and social security. What these numbers do not include is the impact of the things that we do to reduce poverty as it is actually experienced. The effects of Medicaid, SNAP, the EITC, free school meals, Section 8 vouchers, in fact the whole plethora of some 80 poverty reduction programs (other than straight cash welfare payments) are entirely ignored here. So it’s not in fact true that near half of American children are living in poverty or near it. What is true is that if we didn’t have a benefits and welfare system then near half of American children would be living in what this report describes as poverty or near poverty. Those two are really not the same thing at all. Which, given that we spend some $800 billion a year or so on those poverty reduction programs is probably a good thing.

To read the complete article, visit Forbes.com.