Mismeasuring Poverty: The way we determine who needs help blocks many poor people from receiving the assistance they need
The “facts” about poverty can be deceiving. In her magisterial book Behind the Beautiful Forevers, Katherine Boo tells the stories of the inhabitants of a Mumbai slum on the edge of a sewage lake who lack jobs, housing, running water, health care, education, and police protection. It is not unusual to see rats and frogs fried for dinner, feet covered with black fungus, and maggots breeding in wounds wrought by trash-picking. Yet, Boo writes, “almost no one in the slum was considered poor by official Indian benchmarks. … [They] were thus part of one of the most stirring success narratives in the modern history of global market capitalism.” Some success.
Our government’s own count of the poor, while not denying their existence, also minimizes their number—not by undercounting them (though that’s a factor, too) but by setting the poverty bar so low that tens of millions of poor Americans are not accounted for. This miscategorization not only paints a picture of a more prosperous America than in fact exists. It also excludes large numbers of the poor from assistance that they need and might otherwise obtain.
In fact, the poor are with us today in greater numbers than we have seen since we started keeping track over half a century ago. If we counted them by the standards that most other industrialized democracies employ, their numbers would increase by a third—from 46 million to roughly 69 million. To understand how that can be, it is important to grasp the way we define poverty and what that definition has to do with economic hardship.
The United States measures poverty by a standard developed almost 50 years ago by Mollie Orshansky, a Social Security Administration official. At that time, the typical family spent about one-third of its income on food. Orshansky calculated the costs of an emergency food budget, which would provide adequate nutrition for only a short time, and also a low-cost budget, which would provide adequate nutrition for the entire year. She then multiplied the cost of each budget by three to arrive at two poverty thresholds.
Orshansky wanted to use the low-cost food budget to compute poverty thresholds. It made sense to base the poverty line on a food budget that would allow adequate nutrition for an entire year. However, President Lyndon Johnson and his Council of Economic Advisers decided to use a figure close to the emergency food budget to set poverty-level income. Since then, the figure has been updated annually for inflation.