Measuring the New Poverty Measure

[dajoki]

Measuring the New Poverty Measure
by Kathryn Baer
http://uspoverty.change.org/blog/view/measuring_the_new_poverty_measure

The earthquake in Haiti has reawakened us to the devastating poverty there, just as famines in Africa and other disasters, manmade and natural, have periodically reawakened us to deep poverty in many parts of that continent. Disasters and the appeals that follow have a way of putting things in perspective.

Here in America, people rarely starve to death any more. Far too many people are homeless or living in substandard housing, but we don't have millions of people living in shanty towns or in huts that get swept away by mudslides. We don't have orphans begging from door to door.

I've heard people use facts like these to minimize poverty in America. Poor people, they say, don't know how good they've got it. Or, as blogger Grouchy Old Cripple in Atlanta puts it, "our poor live better than most of the people on this planet."

I'm not going there. If someone doesn't have enough to meet even basic needs — food, shelter, clothing, health care, transportation and the like — it doesn't matter that someone else has even less.

What started me down this road is the Census Bureau's plan to develop a new poverty measure. This long-overdue initiative will factor in resources, including cash and in-kind benefits, costs of basic necessities by geographic area and other necessary expenses like child support and transportation to work.

At the end of the day, we'll have a new set of (non-binding) poverty thresholds, i.e., the minimum income families of different sizes need to make ends meet. Recent Census Bureau estimates based on measures like those it will use indicate that more people will be defined as poor, though rates may drop for some subgroups.

The thresholds will, in a manner of speaking, reflect our American standard of living. For example, as the Census Bureau explains, costs for food, shelter, clothing and utilities will be set at the top of the first third of these expenditures by all American families of the same size.

In other words, our expenditures, rather than some judgment on what families with little means should spend, will be the standard here. This does not mean, as the Heritage Foundation's Robert Rector has claimed, that poverty thresholds will automatically escalate as the nation becomes wealthier. Nor, as Glenn Beck asserts, that he would be in poverty because he has less money than his neighbors.

What the new poverty measure won't reflect is what we in this country consider a truly decent standard of living. Consider, for example, electronic equipment. I'll bet you all consider your computers an essential resource and your expenditures for an internet connection as a basic necessity. So do I. And as we know, employers and even some government agencies expect us to have these.

What about assets — some extra money in the bank, an IRA or 401(k) plan perhaps, a car, even equity in a home you can afford? As the Insight Center for Community Development says, "without savings or wealth of some form, economic stability is built on a house of cards that quickly crumbles when income is cut or disrupted through job loss, reduced hours or pay, or if the family suffers an unexpected health emergency."

A poverty measure that allowed for such things would, in fact, be more consistent with what we, the American public, think is needed to get along in our communities. As Shawn Fremstad shows in his mind-opening paper on poverty measurement for the Center for Economic and Policy Research, polls have for some time shown that we generally think the minimum needed to get along is more than twice the federal poverty threshold — far higher than the new threshold will be.

So as we applaud the first steps toward a new poverty measure, we should bear in mind that not everyone everywhere buys into the concept of an absolute measure based on the resources needed to live just above the level of economic deprivation.

The preferred approach in the European Union is to measure poverty relative to average or median income and to draw the line at somewhere between 40 percent and 70 percent. The threshold is thus set much closer to what the majority of the population can enjoy and rises as it becomes more prosperous. This truly is the kind of measure that Rector and Beck find so alarming.

It's based on a commitment to "social inclusion," a vision of community that takes priority over "them's that has, gets." People are deemed poor if their income and other resources cause them to be "excluded and marginalised from participating in activities (economic, social and cultural) that are the norm for other people."

In 2008, Congressman Jim McDermott (D-WA) introduced a bill to authorize the development of a new poverty measure much like the one the Census Bureau will create. This bill and its 2009 version also directed the Census Bureau and the Bureau of Labor Statistics to contract with the National Academy of Sciences for a method of calculating a "decent standard of living threshold," i.e., the amount required for a "safe and decent, yet modest standard of living."

I'd like to see this study done — and the standard developed. Just as the new poverty thresholds should give us a more accurate read on the percentage of the population that has enough to meet its basic needs, a decent standard of living threshold would give us a clearer view of the gap between having just enough and having enough to live what most of us consider a reasonably comfortable life.

[Tsiyu]

1. K & R n/t

:kick:

[dajoki]

2. kick

[maryf]

3. worth a belated kick... thanks

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