Heritage Foundation Blames Poverty On ... Air Conditioning

Thursday's U.S. Census Bureau report on poverty and income [1], which showed the poverty rate increasing from 12.5 percent in 2007 to 13.2 percent 2008 and the median household income falling during that period by an historic 3.6 percent, was a devastating indictment of the past decade of conservative economic policy, and so understandably the right did not want to talk about it. Instead, we saw commentary like that of the Heritage Foundation's Robert Rector, who wrote in the National Review Online [2] that "very few of the 30 million plus individuals defined as 'living in poverty' by the government are actually poor."

How does he know? Well, for one thing, poor people have air conditioners.

"Eighty-four percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning," he wrote, citing this along with other facts in his indictment of what he called President Obama's "agenda to 'spread the wealth' through massive hikes in welfare spending financed by unprecedented increases in the federal debt."

There is so much wrong with using statistics such as this to characterize people in poverty as moochers who are living high on the hog with other people's hard-earned money in their air-conditioned, "three-bedroom house with one-and-a-half baths, a garage, and a porch or patio," watching cable on "two or more color televisions" that you can't contain it in one article or blog post.

But air conditioners is as good a place to start as any. And there is some simple math that puts to rest the idea that poor people having access to air conditioning is that big a deal.

In just a few moments of online searching, I found a 1968 advertisement for air conditioners [3] that ran in the St. Petersburg Times. The ad highlights a 6,000 BTU air conditioner (the type of unit that would cool a medium-sized room) on sale for $118.

Today, a 6,000-BTU air conditioner sells for $169 at Best Buy and $179 at Kmart. But smart shoppers know that air conditioners of roughly that size can be had for as little as $99 during peak sales season for air conditioners. But smart shoppers also know that $118 in 1968 is the equivalent of $722.92 today. (You can use the CPI calculator at the Minneapolis Federal Reserve [4] to run the numbers yourself.) In other words, while the consumer price index has increased 612 percent since 1968, the cost of an air conditioner, in 1968 dollars, is literally about one-sixth of what it was when, as Rector notes, "only 36 percent of the public enjoyed air conditioning."

Rector doesn't say, by the way, how many of these air-conditioned people in poverty have air conditioners as a result of renting apartments that are equipped with them, have hand-me-downs from a friend or second-hand store, or have 20-year-old units that should have been replaced years ago.

But there's at least one parable in this that Rector misses, and lies at the heart of an economy that is failing to sustain a decent standard of living for too many of its people.

Back in 1968, U.S. workers made most of the air conditioners and other appliances that were flowing into the consumer economy. Today, all of the consumer brands you see at the major home improvement and department stores are made overseas. That's a small example of a well-documented trend throughout our economy. We get cheap consumer goods, but at the cost of a lost industrial base that is able to employ people and provide a path out of poverty to self-sufficiency. Back in 1970, there were 17.8 million manufacturing jobs. That number fell to 17.3 million in 2000 and has plummeted since, to 13.4 million in 2008.

Couple that with the economic policies of the past decade that resulted in higher poverty and lower median income for working-age households at the end of the 2001-2007 economic expansion than at its start, and you have the sorry state of affairs we have today, with median incomes continuing to fall.

Conservatives like Rector would like to keep the conversation about poverty focused on whether people have cable or are having a child out of wedlock, rather than on the structural economic changes unleashed by their own policies that are deepening economic hardship and are making it harder for people to be self-sufficient. It would be good for these conservatives to get out of their own air-conditioned rooms and get a real sense of the damage their ideology has wrought.