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Does Being *Relatively* Poor Inflict Severe Psychological Damage?

Here’s a letter to the Washington Post:

Robert Samuelson reports that Pres. Obama’s wants to redefine poverty such that “People are automatically poor if they’re a given distance from the top, even if their incomes are increasing.  The idea is that they suffer psychological deprivation by being far outside the mainstream” (“Why Obama’s poverty rate measure misleads,” May 31).  And while he offers sound objections to this attempt to redefine poverty as a relative concept, Mr. Samuelson misses the most important objection: its premise of “psychological deprivation” is questionable.

Indeed, evidence that people suffer no significant “psychological deprivation by being far outside the mainstream” is found elsewhere in Mr. Samuelson’s column when he notes that, from 1989 through 2007, “three-quarters of the increase in the poverty population occurred among Hispanics – mostly immigrants.”

If being relatively poor were truly a devastating psychological experience for most people, Hispanics would remain in Latin America instead of immigrating to – and remaining in – the United States where, in their relative poverty here, they are “far outside the mainstream.”

This pattern of immigration counsels skepticism of those who assert that people care so overwhelmingly about their relative economic positions that the typical poor person would prefer that the rich be made poorer today rather than the poor have access to opportunities to grow rich tomorrow.

Donald J. Boudreaux