U.S. poverty line seen as poor indicator

Steve Henn Aug 25, 2008
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U.S. poverty line seen as poor indicator

Steve Henn Aug 25, 2008
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KAI RYSSDAL: Last year the government told us that a little more than 12 percent of all Americans were officially impoverished. More than 36 million people were living at or below the poverty line. Tomorrow, the Census Bureau’s going to update the number for 2007. With the economy slowing, there’s a chance the number’s bumped up a bit. We think of government figures like this one as being pretty precise. But, as Marketplace’s Steve Henn explains, there’s actually a big debate about what that federal poverty line really measures.


STEVE HENN: In 1969, a Census Bureau economist defined poverty as the minimum a family could spend on a balanced diet for a year and multiplied that by three. If you earned less, you were poor.

Forty years later, food makes up just one-seventh of the average family budget but the poverty threshold in the United States is still calculated pretty much the same way.

Michael Laracy: The numbers that we are using no longer reflect reality.

Michael Laracy is at the Annie E Casey foundation. He says childcare, housing and transportation are all essentials for working families but the costs of these things don’t figure in the poverty rate.

Laracy: We are constantly misjudging who is poor because the number is so out of date.

The federal poverty threshold also doesn’t include food stamps or other aid programs as income. Ron Haskins at the Brookings Institution says fighting poverty that way is like groping through a cluttered room in the dark.

RON HASKINS: So when we make food stamps more generous as we did in 2002, it has no effect on the poverty rate because these things are ignored in calculating poverty.

Earlier this year New York created its own poverty line. Here’s Deputy Mayor for Health and Human Services Linda Gibbs:

Linda Gibbs: We wanted a measure that would tell us whether or not what we were doing actually worked or not.

New York’s poverty threshold counts aid programs and housing. When the city recalculated its poverty line, the rate ticked up slightly, fell for families with kids, but poverty among seniors increased.

Gibbs says these results are already affecting policy debates.

In Washington, I’m Steve Henn for Marketplace.

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