{"id":39461,"date":"2011-10-07T10:59:20","date_gmt":"2011-10-07T15:59:20","guid":{"rendered":"http:\/\/media.lclark.edu\/content\/hart-landsberg\/2011\/09\/11\/the-tragedy-of-child-poverty\/"},"modified":"2011-11-09T14:05:51","modified_gmt":"2011-11-09T19:05:51","slug":"how-u-s-poverty-thresholds-undercount-the-poor","status":"publish","type":"post","link":"https:\/\/thesocietypages.org\/socimages\/2011\/10\/07\/how-u-s-poverty-thresholds-undercount-the-poor\/","title":{"rendered":"How U.S. Poverty Thresholds Undercount the Poor"},"content":{"rendered":"

Children are our most important resource.\u00a0 Everyone says it, but we don\u2019t really mean it.<\/p>\n

Exhibit one: the percentage of children under the age of 18 that live in poverty. In 2007, at the peak of our previous economic expansion, the child poverty rate was 18%.\u00a0 In 2009, it hit 20%.\u00a0 The figure below provides a look at\u00a0child poverty rates in each\u00a0state<\/a>.\u00a0 New Hampshire had the lowest rate: 11%.\u00a0 Mississippi the highest rate: 31%. According to a recently released Census Bureau study, the 2010 national child poverty rate was 22%.<\/p>\n

 <\/p>\n

\"poverty.jpg\"<\/p>\n

 <\/p>\n

How Do We Measure Poverty?<\/strong><\/p>\n

Children under the age of 18 are counted as poor if they live in families with income below U.S. poverty thresholds.\u00a0 There are a\u00a0range of poverty thresholds<\/a> which are based on family size and\u00a0number of\u00a0children. \u00a0These poverty thresholds are far from generous.\u00a0\u00a0The 2009 poverty threshold\u00a0for a family of two adults and two children\u00a0was$21,756<\/a>.<\/p>\n

Sadly our poverty rates understate the seriousness of our\u00a0poverty problem, for children and adults.\u00a0 The history of how we developed and calculate our official poverty thresholds provides perhaps the clearest proof\u00a0of the inadequacy of current statistics.\u00a0\u00a0First introduced in 1965, the thresholds were based on previous work by the Department of Agriculture (DOA).\u00a0 The DOA created an \u201ceconomy\u201d food plan in the 1950s that was designed for \u201ctemporary or emergency use when funds are low.\u201d\u00a0 DOA surveys had also established that families of three or more persons spent approximately one-third of their after tax income on food.\u00a0 Our initial thresholds were set by multiplying the cost of the economy food plan (adjusted for family size) by three.<\/p>\n

From 1966 to 1969, these poverty thresholds were revised annually by the yearly change in the cost of the items contained in the economy food plan.\u00a0 After 1969, and still today, the poverty thresholds were adjusted by the rise in the consumer price index.<\/p>\n

Our poverty rates are calculated by comparing pre-tax family incomes to these thresholds.<\/p>\n

Why the Poverty Threshold is Deficient<\/strong><\/p>\n

This methodology has produced a poverty standard and estimates of poverty that are deficient for several important reasons:<\/p>\n

First, our knowledge of nutrition has significantly changed since\u00a0the 1950s.<\/p>\n

Second, families now spend approximately one-fifth of their after-tax income on food, not one-third.\u00a0 That correction alone would mean that the food budget should be multiplied by 5 rather than 3, thereby producing higher thresholds and poverty rates.<\/p>\n

Third, poverty is best thought of as a relative condition, which means that it should not be measured by comparing incomes to an unchanging standard based on the cost of a 1950\u2019s economy food plan.<\/p>\n

Fourth, poverty rates should be calculated using after-tax family income adjusted to include the value of government support programs like food stamps (which are also fluctuating and often cut in hard times), not unadjusted pre-tax family income.<\/p>\n

A Better Measure<\/strong><\/p>\n

Researchers, drawing on the work of the National Academy of Sciences Panel on Poverty and Family Assistance Economists, have developed an\u00a0alternative experimental approach to measuring poverty<\/a>. \u00a0They start with\u00a0a reference family, two adults and two children.\u00a0 Then, using Consumer Expenditure Surveys, they calculate the dollar amount of spending on food, clothing, shelter, utilities and medical care by all reference families in a given year.<\/p>\n

The poverty threshold for the reference family is set at the midpoint between the 30th<\/sup> and 35th<\/sup> percentile of the spending distribution for all families with two adults and two children.\u00a0 Small multipliers are\u00a0then used to add spending estimates for other needs, such as transportation and personal care, slightly raising the poverty threshold.\u00a0\u00a0 This threshold is adjusted for families of other compositions.<\/p>\n

The chart below shows national poverty rates for the years 1996 to 2005.\u00a0 We see that the rates produced by this experimental methodology are significantly higher than the official rates.<\/p>\n

<\/a><\/a><\/a><\/a>\"comparison.jpg\"<\/a><\/p>\n

Strikingly, while the official poverty rate is lower in 2005 than in 1996, the 2005 experimental poverty rate is the highest in the period. \u00a0The difference is largely explained by the fact that the experimental measure incorporates changes in the availability of social programs and the relative importance of non-food goods and services in family spending.<\/p>\n

Returning to the issue of child poverty, the table below highlights the difference between the two measures for specific demographic groups.\u00a0 Notice that the child poverty rate calculated using\u00a0the experimental measure is\u00a0always higher than\u00a0the official rate.\u00a0 As previously stated,\u00a0the official 2010 child poverty rate is 22 percent.\u00a0 The experimental rate would no doubt be several percentage points higher, closing in on 25 percent.<\/p>\n

<\/a><\/a><\/a><\/a><\/a>\"poverty-table.jpg\"<\/a><\/p>\n

What\u00a0can one say about a situation where between one-fifth and one-fourth of all children in the United States live in poverty? \u00a0Language like “outrageous,” “unacceptable,” and “indicator of a flawed economic system” comes to mind.\u00a0 What also comes to mind is the fact that these poverty\u00a0statistics rarely get the attention they deserve, as does the question of why that is so.<\/p>\n","protected":false},"excerpt":{"rendered":"

Children are our most important resource.\u00a0 Everyone says it, but we don’t really mean it.\u00a0 Exhibit one: the percentage of children under the age of 18 that live in\u00a0poverty.\u00a0In 2007, at the peak of our previous economic expansion, the child poverty rate was 18 percent.\u00a0 In 2009, it hit\u00a020 percent.\u00a0 The figure below provides a […]<\/p>\n","protected":false},"author":1853,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[29,36,253,304],"class_list":["post-39461","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-class","tag-economics","tag-history","tag-the-state"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/39461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/users\/1853"}],"replies":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/comments?post=39461"}],"version-history":[{"count":17,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/39461\/revisions"}],"predecessor-version":[{"id":41705,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/39461\/revisions\/41705"}],"wp:attachment":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/media?parent=39461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/categories?post=39461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/tags?post=39461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}