Article published October 20, 2008
STATE OF DISTRESS
Measure of poverty inaccurate, critics say
BLADE STAFF
Every year, the federal government updates its poverty threshold - now about $21,027 for a family of four, according to the latest Census data.
Families earning less than that are officially considered to be "poor" or "below the poverty line."
But many say the government's method doesn't accurately count the true number of people who are poor.
The number is based on a calculation done in the early 1960s and completely unchanged since then except for inflation, said Rebbeca M. Blank, the Robert V. Kerr senior fellow in economics at the Brookings Institution. Ms. Blank is the former dean of the Gerald R. Ford School of Public Policy at the University of Michigan and served as co-director of the National Poverty Center.
The original calculation was based on the cost of a family food budget in 1955, multiplied by three, as food used to account for about one-third of a family's expenditures, Ms. Blank explained.
The government's poverty standard has faced criticism because it only counts cash income, not taxes, and not the benefits many low-income families now receive, such as food stamps, housing vouchers, and medical assistance.The standard is also based on expenditure patterns that are completely outdated, Ms. Blank said.
The measure is benchmarked to food, which is no longer one-third of a family's expenses, but now closer to one-eighth, she said. A more accurate measure would include food, clothing, shelter, and utilities, she said.
The measure also uses a single threshold for the whole country. But housing prices and the cost of living are wildly different from rural Ohio to, say, New York City or Los Angeles. In July, New York City released its own poverty measure.
"If we are serious about fighting poverty, we also have to start getting serious about accurately measuring poverty," New York Mayor Michael Bloomberg said in a statement when he released the new measure.
"Since the mid-'60s, the economy has vastly changed. So has society and so have government benefits, but the poverty formula hasn't adjusted in response. We can't devise effective strategies for tackling poverty until we understand its full dimensions."
Ms. Blank said there is pending legislation in Congress to develop a more modern poverty measure.
- Kate Giammarise
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