Until Walmart Sells Childcare and College Diplomas, Poor People Will Still Be Poor

Poor people, you may be aware, own televisions. This has been used as evidence that they're not, you know, poor-poor — but as a piece in Thursday's Times explains, ever-cheaper one-time costs pale next to ongoing life expenses.

Poor people, you may be aware, own televisions. This has regularly been used as evidence that they're not, you know, poor-poor — but as a piece in Thursday's New York Times explains, ever-cheaper one-time costs pale next to ongoing life expenses.

The New York Times

There are really two points in the story by Annie Lowery. First, that the cost of things like electronics and cell phones have dropped consistently over the past decade. Lowery describes the "Walmart effect": "Since the 1980s, for instance, the real price of a midrange color television has plummeted about tenfold … . Similarly, the effective price of clothing, bicycles, small appliances, processed foods — virtually anything produced in a factory — has followed a downward trajectory." Included in the story is a graph showing how prices have shifted over the past decade. The biggest drop in prices relative to inflation is for televisions. The biggest increase is college tuition.

Leading to Lowery's second point. The cost of things like food, child care, and college education have increased dramatically — and even low-price expenses can be prohibitive if they're recurring. Lowery spoke with a Walmart employee and mother in Maryland, Tiffany Beroid, who "said she works part time, rather than full time, because she and her husband could not otherwise afford child care. … 'Child care was costing probably $350 a week,' said Ms. Beroid, who makes $10.70 an hour. 'I would love to be in full-time work, if I could make enough to cover child care payments.'"

In 2011, the conservative Heritage Foundation began a discussion of poverty that was predicated, in part, on the prevalence of amenities like electronics and cars among the poor. "In discussions about poverty, however, misunderstanding and exaggeration are commonplace," it wrote, then presenting a 2005 graph showing how many households owned various things. Nearly everyone owns a fridge and a TV; 80 percent of people at that pointed owned a VCR and DVD player. That refrain — This is poverty? — was quickly picked up by other conservatives and used as an argument against spending on social programs.

The progressive Center for American Progress rebutted, using an argument that mirrors Lowery's second reported point. If all of those poor households needed to, they could probably sell their fridges for a few hundred dollars, or probably less. But then what? That would barely buy enough food to fill the refrigerator they no longer owned. Selling her used TV isn't going to solve the problem Tiffany Beroid has with finding child care.

What's more, over the course of the decade in which TV prices have (relatively) dropped and child care costs have risen, incomes have stayed flat — particularly among the lowest wage-earners. "[D]espite improved living standards," Lowery writes, "the poor have fallen further behind the middle class and the affluent in both income and consumption." In part, you can blame Walmart: "The same global economic trends that have helped drive down the price of most goods also have limited the well-paying industrial jobs once available to a huge swath of working Americans."

Intractable poverty is a tricky issue, and the role the government can and should play in addressing it is an interesting policy question. Poor people having big televisions is not an indicator that they aren't poor. A better indicator is if a mother is home with her child watching that TV in the middle of the day because childcare costs are more than her income can bear.