Editorial: Poverty measure needs an update
Americans know that plenty of their fellow citizens are struggling with poverty.
According to the federal government, that number is 47 million, based upon U.S. Census Bureau data and a formula based upon “money income thresholds” that are combined with family size and composition. That’s a big number, one we would like to think that is unacceptable to all Americans.
But is this figure accurate?
Advocates for the poor say it’s not and we’re inclined to agree for a very simple reason: The formula has not kept up with the times.
Through the work of Mollie Orshansky of the Social Security Administration, the poverty thresholds were developed in 1963-1964, and were based on the economy food plan — “the cheapest of four food plans developed by the Department of Agriculture.” This paved the way for the administration of President Lyndon Johnson to adopt Orshansky’s work as what is described as the “quasi-official definition of poverty.”
Since then the formula has been tweaked, though it has not been overhauled. Critics say the methodology is outdated and, therefore, is flawed in providing a true snapshot of our current situation.
A clearer picture seems to have been developed that takes into account changes in American life. This supplemental poverty measure includes such expenses as what you pay for out-of-pocket medical costs, child care and work-related items, as well as what government benefits you may be getting. This alternative view formula, says the Obama administration, is a more accurate indicator of how Americans are doing and just how many are struggling.
It adds an additional 3 million, thus putting the figure at closer to 50 million Americans.
By taking into account the many different factors that come into play, it not only provides a more accurate number, it also changes where poverty is located in the country.
Thus, under this method, California has the highest poverty rate because the state’s skyrocketing housing costs are included.
Because so much rides on accuracy, it’s time that Washington addresses the issue of using a more precise measure of poverty.