Thomas Sowell

The elderly are not the only people whose standard of living is grossly understated by those who cite statistics on earnings or income.

Those statistics do not include income received by low-income people as transfer payments from the government, such as welfare checks, much less various in-kind transfers, such as subsidized housing and subsidized medical care.

As of 2001, about 78 percent of the economic resources used by people in the bottom 20 percent of income recipients were in the form of either cash transfers or in-kind transfers.

To judge the standard of living of low-income people by income statistics is to leave out more than three-quarters of the economic resources used by them.

It is understandable that those who have either a political or an ideological vested interest in exaggerating the numbers of "the poor" would use statistics that greatly understate the standard of living of low-income people, as well as that of the elderly.

But that is all the more reason for the rest of us to be aware of what statistics do and do not mean -- and beware of those who want us to believe the worst, whether for their own political advantage or because that fits their ideological vision.


Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

Creators Syndicate