How should we determine who is eligible for government programs?  If we misjudge eligibility we risk placing the vulnerable at even greater risk.  The problem is that judging eligibility is challenging – especially in older, retired populations who are diverse and have a variety of income sources and expenses.  The thoughts below might make you rethink who are the rich and the poor in our society?

Identifying the rich

Status symbols – those things we judge others and ourselves by.  The house at the good address, the fancy car, fashionable clothes and exciting vacations are some of the traditional criteria used when we to the mental tally of other people’s income and net worth.  We all do this to some degree or another.  It’s the foundation of ‘keeping up with Joneses’.  The reality is that another person’s apparent wealth or humble economic means cannot be assessed through observation.  The Millionaire Next Door (published in 1996) by Thomas J. Stanley and William D. Danko highlighted that those of seemingly modest means based on outside appearances are sometimes the wealthiest among us.  In this day and age of low interest rates and unprecedented household debt levels this concept of millionaires living modestly is probably even more likely to be true.  These modest millionaires have stayed away from the debt treadmill and they don’t have the status symbols to show for it.

Identifying the poor

Identifying the poor is also difficult based on outside appearances.  An opinion piece published in The Globe and Mail by Margaret Wente (December 20, 2011) titled “The poor are doing better than you think” suggested that the poor were wrongly identified because they had amenities such as air conditioning, DVDs, televisions and home computers.  The article goes on to explain the poor of today own goods that thirty years ago were not owned by most affluent families.  The conclusion is that these goods found in lower income homes demonstrate that the poor are not as poorly off as we might have thought.  But this is entirely wrong.

The reality is that ownership of specific goods cannot be compared across three decades.  Prior luxuries become current necessities.  For example, a home computer is a necessity for many school-aged children.  Some might suggest options such as using the local public library for homework but this isn’t workable for any duration of time.  A new study from the Joseph Rowntree Foundation1 on poverty in the UK supports the notions that the possession of goods is not a proper indicator of socio-economic status.  Some explanations of seemingly ‘high’ living by lower income homes include the timing of the items purchase (for example, purchased before the family entered poverty due to unemployment).   The study also noted that possession does not describe the quality, age or condition of the item.

1.           Emanuele Ferragina, Mark Tomlinson and Robert Walker.  Poverty, Participation and Choice.  May 28, 2013.