Thursday, November 10, 2011

"A new way of counting poverty finds Latinos to be the poorest Americans" -- Response

The Pew Hispanic Center factored in a different set of metrics in order to calculate the rate of poverty among Hispanics.

Using the Supplemental Poverty Measure (SPM), the recent survey took into account
medical expenses, tax credits and government benefits.

According to their recent findings, Latinos now make up the poorest group, along with foreign nationals and other minority groups.

This study, like all others, makes a static fallacy -- assuming that income levels are the same, when individuals climb and descend in income brackets many times throughout their lives.

In fact, the findings of the study would suggest that extended dependence on state subsidies may enable a greater degree of poverty. This conclusion has some merit, considering that subjectively individuals who receive money are less likely to spend conservatively and save prudently.

Even after factoring in the benefits received by respondents, a longitudinal measure would reflect the mobility of recent immigrants or minority families.

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