Wednesday, January 05, 2011

The US introduces many ways to measure poverty

The US Census Bureau has released the results of various alternative poverty measurements. The standard poverty measurement was developed in the 1950s so many believe that it needs updating. The different alternative measurements show the number of US citizens in poverty to be anywhere from 39 million to 53 million.

From the Washington Post, writer Carol Morello tells us the results.

Under a complex series of eight alternative measurements, the Census Bureau calculated that in 2009, the number of Americans living in poverty could have been as few as 39 million or as many as almost 53 million. Under the official calculation, the census estimated that about 44 million were subsisting on incomes below the poverty line of about $21,750 for a family of four. The alternatives generally set the poverty threshold higher, as much as $29,600 for a couple with two children.

In September, the census estimated the nation's poverty rate in 2009 was 14.3 percent. Under the alternatives, it could have been as low as 12.8 percent or as high as 17.1 percent.

For the time being, the government will continue to use the original poverty definition to determine eligibility for federal programs. The alternatives are experimental and will be revised every year, eventually winnowing them to one.

The bureau's move is expected to reignite a debate over whether to replace the current measurement, as was recommended in 1995 by a blue-ribbon panel from the National Academy of Sciences (NAS). The alternatives are offspring of the NAS report.

"Our interest was in getting a better measurement," said Robert Michael, a University of Chicago dean who chaired the panel. "That's politically difficult to do because of the entrenched benefits to those that are currently getting them. Our interest was in understanding how our nation is doing in terms of serving the need."

The current formula was devised by Mollie Orshansky, a civil servant in the Social Security Administration who took the cost of a "thrifty food basket" for a family of four and multiplied it by three. Her formula has been updated for inflation. It continues to harbor a number of quirks traceable to attitudes of a half-century ago, such as a $1,000 reduction in the poverty line for people older than 65, largely because Orshansky, an economist and statistician, believed older people eat less.

No comments: