Who Says 60 Million Americans Live on $7 a Day?

The Los Angeles Times is running a series of editorials called American Values and the Next President, the sixth installment of which is a piece entitled "Domestic Tranquility." Reading through a section under the heading "Poverty," I came across this line - which I found hard to believe: "In our America, 60 million people survive on $7 a day."

That means that one in five people in the U.S. live on less that $2,555 a year.

The Los Angeles Times linked to its source, The Global Research Center - a Canada-based website whose "writers, scholars, journalists, and activists research and report on globalization" - where writer William Shanley boldly asserts that "a 2004 analysis of data by the U.S. Census reports that 60 million Americans now live on less than $7 per day." In addition to the fact that 2004 is no longer "now," this alleged statistic is a radical departure from these pertinent statistics from the U.S. Census Bureau in 2004:

  • There were 37 million people in poverty in 2004

  • There were 7.9 million families in poverty in 2004

  • Poverty for a family of 4 in 2004 meant having an income of $19,307

  • Poverty for a family of 3 in 2004 meant having an income of $15,067

  • Poverty for a family of 2 in 2004 meant having an income of $12,334

  • Poverty for unrelated individuals meant having an income of $9,645

If there are a total of 37 million people in America living in poverty, how could there be 60 million people living on $2,555 a year?

I called the Los Angeles Times and reached Jim Newton, editorial page editor, in his office. I asked Newton about the line in "Domestic Tranquility," the one that says, "In our America, 60 million people survive on $7 a day."

"That is an interesting and controversial statistic," Newton said. He referred me to William Shanley's article and called it "the source."

"How comfortable are you with that source and his facts?" I asked Newton. I explained that the premise of the piece I was writing for Pajamas Media is that this "statistic" appeared to be cooked, bogus - flat out wrong.

"I was the editor on the piece," Newton said. "But Lisa Richardson wrote it." Newton gave me Lisa Richardson's phone number.

I called Lisa Richardson and left her a message. While I was waiting to hear back, I reread "Domestic Tranquility," specifically the part of the article where the editors opine about what poverty in America means to them today. "No less than James Madison, the Constitution's principal author, saw the dangers inherent in a society that treasured equality but practiced inequity."

No doubt, if one-fifth of America was making in a year what 15 Los Angeles City Council members reportedly make in five days, then James Madison would roll over in his grave and shout inequity. But what is also inequitable is a newspaper presenting phony facts under the guise of those facts being simply controversial.

To find out more, I read up on the Los Angeles Times' source, William Shanley, at his webpage. Shanley says he is a "writer and media producer" whose favorite activities include "amusement parks, beachcombing, and hot tubbing." His cause is "life enhancement" and his political leaning is "very liberal." He also has this to say about himself in his profile: "William Brandon Shanley, iconoclast, dreamer of dreams, hatcher of schemes, shatterer of graven images and neocon socio-war-mongering-psychopaths!"

Was his statistic - 60 million Americans living on $7 a day - a William Brandon Shanley-hatched "scheme"? I called William Shanley at his home in Connecticut to find out. (Fact checkers take note: I was able to locate William Shanley's home phone number in about the same amount of time it took me to get the 2004 poverty facts and figures from the U.S. Census Bureau - seven minutes per fact). No answer, but I left Shanley a message.

In the meantime, I Googled Shanley's line, "Americans live on $7 a day" to see where he might have gotten his information. Based on his web info, he did not seem like the type of quantitative data analyst that one might hope to see conducting such research at the Times. The first link from Google sent me to the World Socialist Web Site. This headline screamed out at me:

60 million Americans living on less than $7 a day

US income figures show staggering rise in social inequality

By Jerry White

12 December 2006

The World Socialist Web Site article predated Shanley's article by five months. Shanley may or may not have used it as a source. But unlike Shanley, the World Socialist Web Site reporter credited his source - which turned out to be the New York Times. "According to the [New York] Times analysis, this means the poorest 60 million Americans have reported incomes of less than $7 a day!" writes Jerry White. This figure comes from a November 28, 2006, article written in the New York Times entitled "'04 Income in U.S. Was Below 2000 Level."

Here is the problem: for starters, the New York Times reporter, David Cay Johnston, does not use data from the U.S. Census Bureau to come to his conclusion. Instead, the facts and figures in his piece refer to "the total income Americans reported to the tax collector" - i.e., the IRS. But far more important is that the New York Times' figure does not come from actual IRS data, but from "analysis of the IRS data by the New York Times."

To understand exactly what "analysis of the IRS data" might mean, I interviewed a professor at a University of California campus who, as a department chair, "specializes in quantitative analysis." This professor blogs under the pen name Engram at Back Talk (he asked to remain anonymous; his information was fact checked for this article). Engram has written "Misleading Income Statistics, Courtesy of the New York Times," in which he argues convincingly why analysis of IRS data by the New York Times is suspect. According to Engram, he has also conversed with New York Times reporter David Cay Johnston about this.

I asked Engram whether I should believe this New York Times "analysis" which postulates that "60 million Americans live on $7 a day" - which is based on data that is not sourced. Here is what Engram said:

"That number is exasperating and misleading. When analyzing IRS data, you have to ask, are you talking about pre-tax or after-tax? Are you talking about average income or median income? The average Joe does not understand, and David Cay Johnston might not understand, that there are many sources of income data that must not be overlooked when coming up with this kind of a figure. For example, in reporting to the IRS, people often leave out welfare benefits or food stamp benefits, benefits that dramatically alter their supposedly living on $7 a day. There are also benefits that an employer might provide. You need to take into account all sources of income. You cannot just take a figure and jump to a conclusion. It is not seeking the truth. It is jumping to a number to support a conclusion that you started off with already."

In the Los Angeles Times piece "Domestic Tranquility," the editorial board writes "In our America, 60 million people survive on $7 a day." But really, they should have written, "In the America according to William Shanley..." or "In the America according to the World Socialist Web Site..." or "In the America according to the analysts at the New York Times, 60 million people survive on $7 a day."

But that is not James Madison's America, now is it?

Lisa Richardson of the Los Angeles Times did not return calls. David Cay Johnston of the New York Times did not return email. William Shanley later called me back and explained, "No, I did not look at the U.S. Census Bureau figures. I used the World Socialist Web Site as my source. They source the New York Times. Certainly, no one questions this as an official source." He later called back to amend his statement: "You are right. In my piece, I said it was [information from] the U.S. Census Bureau. It was from the IRS."

Annie Jacobsen writes about aviation security and homeland security for a variety of newspapers, magazines and blogs. She is the author of the book, Terror in The Skies, Why 9/11 Could Happen Again.