Poor people do not need tricky equations to let them know if they are poor

[dajoki]

NYT
http://www.nytimes.com/2006/02/18/national/18poverty.html?th&emc=th

Report on Impact of Federal Benefits on Curbing Poverty Reignites a Debate

By ERIK ECKHOLM
Published: February 18, 2006

A brief report this week from the Census Bureau, highlighting how welfare programs and tax credits affect incomes among the poor, has fanned the politically charged debate on poverty in the United States and how best to measure it, with conservatives offering praise and liberals saying it underplays the extent of deprivation.

The report, "The Effects of Government Taxes and Transfers on Income and Poverty: 2004," found that when noncash benefits like food stamps and housing subsidies were considered, as well as tax credits given to low-income workers, the share of Americans living under the poverty line last year was 8.3 percent. This is well below the 12.7 percent of Americans that the government officially says lived below the poverty line in 2004, using the conventional methodology that only counts a family's cash income.

Conservatives have long maintained that poverty levels are overstated, and the new report was hailed by Douglas Besharov, an expert on social policy at the American Enterprise Institute, a conservative research group in Washington, as a much needed corrective. Mr. Besharov issued a news release saying, "The new data show that real progress against poverty has been made in the last 40 years."

But liberal scholars said the report presented a misleading and partial picture, highlighting uncounted resources available to many poor people but ignoring, on the other side, many new expenses and hardships they face in a changing economy.

"Yes, the E.I.T.C. means a family has more money, and that's good," said Timothy Smeeding, an economist at the Maxwell School of Syracuse University, referring to the Earned-Income Tax Credit, which can pay thousands of dollars to a low-income worker. "But going to work can also mean high new expenses for travel and child care, for example, and these aren't included." "They've added in the extra benefits people get, but not the extra costs," Mr. Smeeding said of the Census Bureau, adding that the report gave an overly optimistic figure of living conditions on the bottom.

[Warpy]

1. Poverty's been defined downward and now means destitution

The formula for determining the poverty line relies on a "market basket" of foodstuffs and assumes a family of four spends on third of its income on food.

Well, housing has inflated more rapidly than food, so that family now spends 1/6 of its income on food, half what the government says it does. The government assumes a family spends about $6,000 a year on food, putting the official poverty level at $18,000 a year for a family of four. Since that family spending $6,000 a year for food is spending so much more of the budget on housing, that puts the real poverty line for a family of four at $36,000 a year, exactly double what Uncle Sugar says it is.

This is one of the funny equations they keep using to push wages down, that artificially low poverty line. The only way a family of four can live on $18,000/year is by living in incredibly dangerous, substandard housing--which they do.

Both parties have been lying to us for decades about where the poverty line is, and neither of them has been willing to risk the wrath of business owners to jack up the minimum wage to push marginal workers slightly above that line.

That is why I won't participate in my own financial destruction by voting for any more conservative candidates of either party. Anybody who plays their game thinking it's going to make a difference is kidding himself.

[OzarkDem]

4. In Ohio, cancer patients on disability

receive about $600 per month to live on, and many now have co-pays for medicine and office visits. Its hard to pay rent, utilities, buy groceries and get transportation to the doctors office. They're also ineligible for public housing assistance or other housing programs, those slots are reserved for the chronically poor, mentally ill, drug addicts and those just getting out of prison.

Any rental under $600 a month is borderline condemned property. Its sad to see them struggle to live.

[awoke_in_2003]

7. Sound just like the Medicare

prescription plan. The GOP's idea about health care, get sick and die.

[dajoki]

5. great post!!

[bread_and_roses]

9. Exactly (n/t)

[musical_soul]

2. One thing I have noticed about conservatives.

I notice they typically are not poor. They're not normally rich, but they're not normally poor either. It doesn't seem right that they talk about a group of people that they're not part of.

[dajoki]

6. or know nothing about n/t

[skids]

3. Yes, yes I'm afraid they do.

The majority of Americans think they are more well off than they actually are. Only those who have always been poor know it for sure, and a few of the now-truly-dirt-poor have figured out that they are not middle class anymore. The rest have slowly acclimated to being lower class, but still think they are middle class despite not having the things that define middleclassdom (stuff like, oh say, a savings account, job security/mobility, something to leave their kids that doesn't have a mortgage on it, etc.)

[bread_and_roses]

8. And those "transfers" are a tax-subsidy to low-wage business

Why should full-time workers need food stamps? More Corporate Welfare that is never addressed.