The 'Poverty Line'

The Economist comments on the current poverty line report just released, it writes,

Whatever crude logic it possessed at the time, the Orshansky poverty line is by now quite arbitrary. Its originator calculated the cost of meeting a family’s nutritional needs and then multiplied this figure by three, because families in the early 1960s spent about a third of their income on food. The Census Bureau does not repeat this exercise to determine today’s poverty line; it does not recalculate the cost of an adequate diet or remeasure the share of income spent on food. It simply adjusts Ms Orshansky’s figures for inflation. Thus today’s dollar thresholds do not tell us how much a family or individual needs to get by in today’s America; they simply restate the cost of feeding a family in the 1960s in today’s prices, and multiply it by three.

The Census Bureau has already experimented with such measures, and is probably itching to finally retire the Orshansky line. But its political masters in the Office of Management and Budget are nervous of any innovation that would raise the official poverty number. To the bureau, the poverty line may be a mere “statistical yardstick”, but to the administration, it is a political stick its opponents might use to beat it with.

The article also mentions several expenses and incomes that are not accounted for in the 'poverty line' now used.

For those of you that would like to get a better understanding of the expenses/incomes that are not accounted for, I've found the latest report by the Heritage foundation to be very helpful.

If you want to get even deeper, and would like a general understanding of poverty in America, I would recommend reading 'Understanding Poverty In America', also by the Heritage Foundation. It matches my experience of growing up in Compton, California better than any other report I've read on the topic.