[Comment] Critics say poverty rate no longer reflects reality

from the San Diego Union Tribune

It doesn't take much for elderly people to make their way out of poverty these days. At least not according to the federal government.

If you're an individual making anything more than $10,210 per year – or a married couple making $13,690 – congratulations! You're no longer destitute. You've managed to rise above the federal poverty line. You no longer need some of those welfare programs intended for the truly poor.

“But wait a minute,” you might say. “This is San Diego County. Can you really make as little as $10,211 in this county and not be considered poor? Can you really be cut off from some government programs when you're making such little money?”

Well, that's the rub, isn't it? And that's why Paul Downey, president and chief executive of San Diego's Senior Community Centers – a group that provides care for about 7,500 seniors per year – was in Sacramento last week, pushing for a different way of calculating poverty.

“The poverty rate is a one-size-fits-all model that uses an antiquated, outdated method of determining economic prosperity. It doesn't reflect the realities of 2008,” said Downey, whose group specializes in helping seniors living below the official poverty level.

The federal poverty level was created in 1965 as a benchmark for determining what part of the population should benefit from the Great Society's anti-poverty programs.

Relying on consumption surveys from the 1950s, the level was based solely on the cost of the basic food budget needed to meet minimum nutritional requirements. Since families at that time spent a third of their budget on food, the poverty rate was calculated at three times the amount of money it takes to buy that minimal amount of food. It has since been adjusted upward each year to keep it level with inflation.

Critics of the poverty rate note that spending patterns have changed a lot in the past four decades. People now spend as little as one-seventh of their budget on food – less than half the ratio of the mid-1960s. The calculation doesn't take into account the jump in transportation, housing or medical costs over the past few years.

Equally problematic is that the poverty rate is a nationwide standard. The same rate is used in Jackson, Miss., or Waco, Texas, as in Chula Vista, Escondido and San Diego, despite the wide variances in the cost of living.

“The poverty line makes the assumption that the costs for housing, health care and food are consistent throughout the entire nation,” said Pam Smith, director of San Diego County Aging and Independence Services. “But no two counties are the same.”

The poverty level has a direct effect on how much help a senior citizen can receive from the government. To qualify for food stamps, net after-tax income must be no more than the poverty level. For Supplemental Security Income, an elder must earn less than 105 percent of the poverty level – amounting to $10,272. For Medi-Cal, it's 127 percent, or $12,972. For federal energy assistance, the minimum is 130 percent, or $13,237 per year. For the Medicare prescription drug subsidy, it's 150 percent, or $15,315.

“People look at the calculations and say, 'Well, these people are making above the poverty line; they must be making enough money to get by,' but they really aren't,” said Steven P. Wallace, associate director of the UCLA Center for Health Policy Research. “Some (food) programs and caregiver support are prioritized to people below the poverty level. It's sort of sad to tell people, 'You're suffering, but you're not quite poor enough to get this.' ”

The UCLA center released a study last week highlighting the gap between the poverty rate and the amount of money it takes to live a financially secure life as a senior citizen in San Diego and other California counties.

According to the UCLA calculations, based on projected expenses for housing, food, transportation and health care, an elderly homeowner in San Diego County who has paid off the mortgage still requires at least $15,678 per year to be economically secure. Mortgage payers need nearly twice that much, $30,368, and renters need $22,822.

An elderly couple requires $23,912 if they own their home, $38,603 if they are paying a mortgage and $31,057 if they are renting.

Contrast those costs with the average payment coming from Social Security: $12,255 for individuals and $20,588 for couples.

“Maybe there are places in this country where people might afford to live on Social Security, but San Diego isn't one of them,” said William Booth, 67, who has tried living on Social Security for the past five years.

Booth, a former purchasing manager for an auto parts factory, retired prematurely when his employer moved to Orange County. Three heart attacks put a crimp on his ability to find another job. He received about $12,000 per year in Social Security and disability payments.

That was not enough to pay rent. For three years, Booth lived in his car, sleeping in parking lots around Mission Bay and SeaWorld, until he chanced upon the Potiker Family Senior Residence downtown.

“Thank God for senior community centers,” Booth said. “Without subsidized housing, there would be no place I could afford.”

The issue made it to Sacramento last week, when the state Senate Subcommittee on Aging and Long-Term Care held a daylong hearing into the gap between the poverty rate and the amount of money needed for seniors to live in California. Judging from the reaction of Sen. Elaine Alquist, D-San Jose, who chairs the committee, it seems likely that laws will be passed to make the poverty rate more reflective of reality.

“We've been making decisions based on really bad data,” Alquist said. “There are a lot of people who are living in poverty in this country, and as a state and a country, we think we're doing good by them, but we're really not. For a lot of the elderly in particular, what should be the golden years are turning into the rusted years.”

Dean Calbreath