What the Census Should Say
Yesterday, the Census Bureau released the poverty numbers for 2005, reporting no statistically significant change in the national level of poverty. As the Census report states, "After four years of consecutive increases, the poverty rate stabilized at 12.6 percent in 2005 - higher than the most recent low of 11.3 percent in 2000."
However, as the Center on Budget and Policy Priorities points out, while poverty may have stagnated and median income rose slightly in 2005, that poverty rate is still higher and the median income still lower than at the end of the 2001 recession. In other words, the ground we lost on alleviating poverty during the recession has not been made up during the recovery. Or as CBPP puts it, "For the first time on record, poverty was higher in the fourth year of an economic recovery, and median income was lower, than when the last recession hit bottom and the recovery began."
But no one needs the Census to tell us what we already know - that poverty persists in America - and we already know what the Census doesn't tell us - that our government does not accurately measure poverty.
The federal poverty line (FPL) is a threshold that was calculated by Mollie Orshansky, an official in the Social Security Administration in 1963. Orshanksy took the Department of Agriculture's lowest food plan for an American family - one that was "designed for temporary or emergency use when funds are low" - and multiplied it by three. Orshanksy chose this formula because a 1955 government study reported that families spend approximately one-third of their after-tax income on food. Orshanksy's poverty threshold was never intended to become a national standard, but it has.
Aside from being adjusted for inflation - using the Consumer Price Index - the Orshansky standard has gone unchanged to this day, despite the fact that the cost of food makes up closer to one-fifth, not one-third, of a family's after-tax income. While the proportion spent on food has decreased significantly since the standard was created, the proportion of income spent on costs like housing, childcare, and transportation have increased dramatically.
The FPL is used by various public and private services to determine who is eligible for their programs like food stamps and the national school lunch programs and Head Start.
But the federal poverty line does not drive policy per se. Many programs recognize a more realistic income threshold by adopting superpercentages of the FPL. Illinois, like most states, sets the eligibility for state-funded children's health insurance at 200% of the FPL. Also, when a program pegs its eligibility to the poverty line, it ensures that like the FPL, it will be adjusted to the cost of living every year.
The real problem with the poverty line being too low is that it allows the general public, and the politicians who answer to the public, to underestimate poverty. The FPL is an inaccurate proxy for the nation's general understanding of the reality and scope of poverty.
If official poverty goes down, (or even stays the same, as the Census reported yesterday) we brag about it without any notion of what life is really like for people below the threshold, let alone whether we've actually made any progress in ending unequal opportunity and reducing human suffering
It would be nice to reform the poverty line, but the political capital and the bureaucratic transaction costs make it impractical. Besides, the more pressing issue, and the one that could have a lasting impact, would be to reform the public understanding of poverty, itself.
There is a consensus in the United States that the abject poverty of the developing world will not be tolerated in this nation. The question is what level of poverty is unacceptable in America if it is present, but not as dire. In short, where do we, as Americans, draw the line?
There seems to be a solid consensus that people who live at 200% of the FPL have many of the same problems of those who live below it. The problem is that politicians are only held accountable for those at 100% of the FPL, simply because that is the one yardstick the public uses to understand poverty in this country.
That is why we must focus on transforming the public understanding of real poverty. The criteria should be unabashedly popular and not mathematical. It should be determined by what most people think are the necessary things to have a minimally decent standard of living: food, clothes, housing, healthcare, and education - to name more than a few. That would be the "new" poverty level in public and political discourse.
The way American citizens and their representatives understand poverty masks the reality and scope of the hardship. We must move beyond a simple, outdated mathematical formula, by creating a genuine national understanding of what is the acceptable minimum for living in America.