REfining the Poverty Line
One reason the government has spent nearly half a century fighting, and losing, the war on poverty, is that it doesn’t know where to draw the battle line.
The Center for American Progress recently analyzed the inadequacy of the official poverty line as a gauge for who is really poor in America. Among the biggest problems:
• The thresholds are low…. The poverty line represented nearly 50 percent of median income for a family of four in the early 1960s, but now represents only about 28 percent of median income. So the level at which a family is considered poor has fallen further and further outside the mainstream.MORE
• The thresholds are essentially arbitrary because they simply represent a number calculated more than 40 years ago and then adjusted for inflation, and they no longer represent anything in relation to family incomes or costs.
• The resource-counting rules both understate and overstate resources. They fail to reflect the effects of policies such as refundable tax credits, near-cash benefits such as Supplemental Nutrition Assistance Program (formerly food stamps) or subsidized housing assistance. At the same time, they also do not consider the impact for family budgets of tax liabilities, work expenses, or health care costs.
• The rules make no adjustment for geographical variation despite the large variations in costs across areas and regions of the country.