The Long Blog About The Slow Road To A Realistic Poverty Measure

May 16, 2011 § Leave a comment

How do we define basic need?  Supposing we differ in our answers can we agree that it’s a far cry from needs in 1960? There’s really no argument on that point is there? Yet, the threshold defining poverty is based on the 60’s-a time where women mostly stayed at home and single parents were uncommon.  Life changed but  poverty threshold measurements didn’t.

Poverty “thresholds” are used to count people in poverty, they’re statisitcal measures; abstracts. Poverty “guidelines,” based on the thresholds, affect quality of life.  They’re used to qualify families and individuals for public assistance.  Over the years, our increasingly antiquated measurements impacted guidelines causing the poor to try harder and harder to make 1960 standards fit into 1970, 1980, and 1990 budgets.  The thresholds also failed our government because, as methods of poverty relief  became less and less cash based (ie-food stamps, tax breaks, energy assistance), the simplistic old meaurement system was unable to capture programmatic effectiveness.  Were programs making a difference? Was everyone in poverty getting poverty relief?  Our measurements weren’t telling us.

Congress called for a review in the 90’s.  The National Academy of Sciences (NAS) evaluated and reported on needed changes in 1995. They suggested assessing basic need through a method of bundling  food, clothing, shelter, and utility prices and adding a mulitiplier that would adjust for the cost of  household supplies, personal care, and non work related transportation. They called for the  factoring in of geographic price variations. It was a sophisticated advance over the existing  threshold that used only a bundle of food times the multiple of 3 (based on the 60’s notion that food was 1/3rd of a household budget) to determine need.

NAS also recommended adjusting the income tests determining degree of need. They proposed adding  net earnings plus in-kind public assistance received (food stamps etc)  and subtracting the costs of commuting, childcare, and medical expense.  They concluded that “the proposed measure, compared with the current measure showed a lower poverty rate for people in families on public assistance and a higher poverty rate for people in working families.”  Current income tests analyze only gross income and other monies such as interest income with no consideration for in kind assistance or the costs of working life so many people who struggle are not qualifying for financial help. 

No action was taken on the recommendations from NAS.  And, though US Census grew more concerned about accurately measuring the number of poor in America and implemented experimental poverty measures, the movement for change died in George W Bush’s administration.  A recent Washington Post article about this history writes, “Although the poverty measurement is largely of interest to academics today, it has the potential to alter our perceptions of who is poor, how persistent a problem poverty is and whether policies should be reordered.”  I’d add that it has the potential to help alot of people whose 21st century needs aren’t being detected by a 20th century tool. It’s not an intellectual matter to people whose lives depend on it’s accuracy.

President Obama’s Adminstration has done a few things to help poverty but including funding to update the thresholds was one of the quietest and most meaningful acts he’s taken to help  poor and low income Americans.  The Supplemental Poverty Measure  won’t impact guidelines soon but it will give government good data on the success rate of poverty relief programs so it can emphasize distribution of assistance that really matters. In the long run this is the first step in better supporting fnancially vulnerable populations.  Thank you President Obama.

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