Poverty rate

The poverty rate in the United States fell to 11.8 percent in 2018 – the lowest it’s been since 2001. But this estimate significantly understates the extent of economic deprivation in the United States today. Our official poverty line hasn’t kept up with economic change. Nor has it been modified to take into account widely held views among Americans about what counts as “poor.”

A better, more modern measure of poverty would set the threshold at half of median disposable income – that is, median income after taxes and transfers, adjusted for household size, a standard commonly used in other wealthy nations. According to the Organization for Economic Cooperation and Development – which includes 34 wealthy democracies – 17.8 percent of Americans were poor according to this standard in 2017, the most recent year available for the United States.

To be sure, there is no such thing as a purely scientific measure of poverty. Poverty is a social and political concept, not merely a technical one. At its core, it is about not having enough income to afford what’s needed to live at a minimally decent level. But there’s no purely scientific way to determine what goods and services are “necessary” or what it means to live at a “minimally decent level.” Both depend in part on shared social understandings and evolve over time as mainstream living standards evolve.

At a minimum, we should set the poverty line in a way that is both transparent and also roughly consistent with the public’s evolving understanding of what is necessary for a minimally decent life. The official poverty line used by the Census Bureau fails that test. It was set in the early 1960s at three times the value of an “economy food plan” developed by the Agriculture Department.

The plan was meant for “temporary or emergency use when funds are low” and assumed “that the housewife will be a careful shopper, a skillful cook, and a good manager who will prepare all the family’s meals at home.” The decision to multiply the cost of the economy food plan by three was based on a 1955 food consumption survey showing that families spent about one-third of their income on food at that time. Since then, the measure has stayed the same, adjusted only for inflation.

No expert today would argue that multiplying by three the cost of an antiquated government food plan – one that assumes the existence of a frugal “housewife” – is a sensible way to measure poverty in 2019, even if you adjust it for inflation. However meaningful this was as a measure of poverty in the 1960s, which is debatable, it makes even less sense to apply it today to an American population in which most people were born after 1980.

The dominant framework for measuring poverty in the United States is too technocratic and too ideologically conservative.

Excerpted from: 'TheOfficial US Poverty Rate is Based on a Hopelessly

Out-of-Date Metric'.

Courtesy: Counterpunch.org