Lies, Damn Lies and Poverty Statistics

[Clara T]

Lies, Damn Lies and Poverty Statistics

How an archaic measurement keeps millions of poor Americans from being counted

By Christopher Moraff


What shape Bush has in mind is clear. While the administrators of the president’s economic policies champion 11 consecutive quarters of GDP growth, Bush-mandated tax cuts ensure that the government will continue to make less while the rich and large corporations eagerly fill their coffers. In 2005, federal revenues were just 17.5 percent of GDP, 1 percent less than the previous 50-year average. By contrast, the Feb. 12, 2005 Economist reported that in 2004, after-tax corporate profits reached their highest level as a proportion of GDP in 75 years.

In the meantime, everyday Americans are spending more than they make. For the second straight year, personal savings have been in the red, a phenomenon that has only happened once before, at the height of the Great Depression. Research conducted by the Economic Policy Institute shows that the indebtedness of U.S. households has risen nearly 36 percent over the last four years. As a result, the gulf between the “haves” and “have nots” is reaching crisis proportions.

Compounding the crisis is an archaic method for determining America’s poverty rate, which is then used to formulate the funding of programs that alleviate poverty. When President Bush sat down with his advisors to draft his FY 2007 budget, it’s debatable whether he took the time to examine the national poverty statistics provided each year by the Census Bureaus. What’s not debatable is that the Census Bureau’s methodology is woefully inadequate.

The current method for measuring poverty in the United States was developed in 1963 by a young statistician for the Social Security Administration named Mollie Orshansky. Using data from a 1955 Department of Agriculture survey, Orshansky developed a set of thresholds that set a poverty line at three times the annual cost of feeding a family of three or more under Agriculture’s “low-cost budget.” She developed the thresholds purely for her own research and said at the time that her data’s limitations would yield a “conservative underestimate” of poverty.

http://www.inthesetimes.com/site/main/article/2513/

[babylonsister]

1. There's not a vacuum to be outraged about, is there? nt

[Selatius]

2. Measuring poverty is important, but...

ultimately, it's the philosophy over the role of government that is the main battleground. I'm not disagreeing with the notion that there is a problem with measuring poverty in the US, but ultimately, regardless of whether the statistical methods are revised, reforms have to be made.

Social programs and a progressive income tax have historically served as a means to continue circulating money through an economy. Without such things, money becomes stratified and ultimately falls under the control of a small number of people. As a result, money isn't used in areas that are needed but are simply used in areas the rich want instead.

[raccoon]

3. I've thought this for ages. The "official" poverty stats are

meaningless.

You could take them and multiply by 2 (at least) to get a more realistic figure.

[Nikia]

4. The problem with the formula

Is that it is based upon the cost of food, which has not increased at the rates of housing, utilities, healthcare, and gas for cars (in some areas, there is no public transportation). Compared to these other items, food is cheap.