How Govt. Hides the Poor: Formula for Measuring Poverty Dates to When a Loaf of Bread Cost 22 Cents

[xchrom]

http://www.alternet.org/economy/hiding-poor-govts-formula-measuring-poverty-dates-when-loaf-bread-cost-22-cents



Why is Congress still measuring poverty based on a 1963 trip to the grocery store?

To determine who is officially poor in America, the federal government compares a family’s annual cash income to a figure produced by an arcane formula that's based on the price of food in 1963, when a loaf of bread was 22 cents and a burger less than a quarter. Starting under President Lyndon Johnson, the government's official way of defining who is poor comes from calculating a minimum food budget for a family of four, tripling that figure to cover other living costs, and then indexing it annually for inflation.

The result is the federal poverty level. For 2014, that threshold was $23,850 for a family of four. Smaller families can subtract $4,060 per person. Individuals making $11,670 or less in 2014 were officially poor. Many government programs, from School Lunch to the Earned Income Tax Credit to Obamacare's subsidies, decide eligibility by comparing one’s annual cash income to the official poverty level—or to a multiple of it, say 150 percent.

Cities, states, advocates and academics have known for years that this measure of who is poor undercounts millions of Americans. They know that the 1960s-based formula ignores modern living costs, such as today's cheaper food but higher housing and other expenses. And they have developed alternative ways to track living costs that confirm poverty and economic insecurity of households just above the poverty line is far more widespread than Congress wants to admit.

[hobbit709]

1. "There's lies, damned lies, and statistics" "Figures don't lie but liars can figure"-Mark Twain

[xchrom]

2. +1

[historylovr]

3. That explains a lot.

[woo me with science]

4. K&R

[whatthehey]

5. yes that's when the formula was started, but it does not currently assume a 22c loaf

so it's not measuring a 1963 trip to the grocery store - it just started measuring trips to the grocery store in 1963. The "indexing annually for inflation" clearly mentioned will likely overestimate the price of basic bread.

This site claims to use the government CPI and shows a loaf of bread would be 1.68 now if it were 0.22 in 1963.

http://www.dollartimes.com/inflation/inflation.php?amount=0.22&year=1963

Now you can certainly pay more than $1.68 for a loaf but you can certainly pay less too. I don't recall too much in the way of fancy artisanal breads in 1963, but I confess I was young enough not to know the options in detail. My local supermarket sells whole wheat or white for $1.39