Measuring Poverty: On the Federal Poverty Level
Measuring poverty has never been an easy task. The newest census
numbers for 2006 reveal a lack of statistically significant change in
the national poverty rate—essentially a stagnating poverty rate—but
Gulf hurricanes and presidential campaigns suggest that poverty is
getting deeper and more persistent. Recently, the media and the
antipoverty community have also returned national attention to the
problem. Some have proposed implementing a new measurement and
some have defended the current federal poverty line. So what is
the use of the federal poverty measure, and what amount of fiction
versus fact are the census numbers telling?
The federal poverty line (FPL) is a threshold that Mollie Orshansky, an official in the Social Security Administration, calculated in 1963. Orshanksy multiplied the Department of Agriculture's lowest food plan for an American family by three because a government study reported that families spend approximately one-third of their income on food. Orshanksy's poverty threshold was never intended to become a national standard. Yet it has, and not without consequence.
Aside from being adjusted for inflation, the Orshansky standard has gone unchanged to this day, even though the cost of food currently makes up closer to one-fifth, not one-third, of a family's income. While the proportion families spend on food has decreased significantly, the proportion of income they spend on housing, childcare, and transportation has increased dramatically.
Despite these proportional changes, public and private services across the country still use the FPL to determine Americans’ eligibility for programs like food stamps, school lunch programs and Head Start. Many programs recognize the inaccuracy of the FPL and as a result adopt super-percentages of the FPL. This creates a more realistic income threshold and makes the line work better for low-income people.
It is clear the FPL is an inaccurate tool to measure poverty. Census figures claim to tell public audiences the truth about American poverty, while the FPL makes that close to impossible. In reality, poverty must be considered an issue of inequality, placed in the context of an increasingly wide gap between the highest and lowest income earners. Relative poverty, which compares quality of life for individuals within our communities, gives a better picture of the lived experience of poverty in the United States.
It is the Shriver Center’s position that while the federal poverty line is too low and does not present a holistic view of the income growth, assets, or opportunities available to low-income people, it is still important to maintain a national standard to measure progress and set goals. As long as antipoverty programs can use super-percentages and area median income, and as long as we recognize that the federal poverty line does not accurately determine who is poor in the United States, our resources are best used to develop and implement policies that improve the lives of low-income people rather than redefining the federal measurement.
The federal poverty line (FPL) is a threshold that Mollie Orshansky, an official in the Social Security Administration, calculated in 1963. Orshanksy multiplied the Department of Agriculture's lowest food plan for an American family by three because a government study reported that families spend approximately one-third of their income on food. Orshanksy's poverty threshold was never intended to become a national standard. Yet it has, and not without consequence.
Aside from being adjusted for inflation, the Orshansky standard has gone unchanged to this day, even though the cost of food currently makes up closer to one-fifth, not one-third, of a family's income. While the proportion families spend on food has decreased significantly, the proportion of income they spend on housing, childcare, and transportation has increased dramatically.
Despite these proportional changes, public and private services across the country still use the FPL to determine Americans’ eligibility for programs like food stamps, school lunch programs and Head Start. Many programs recognize the inaccuracy of the FPL and as a result adopt super-percentages of the FPL. This creates a more realistic income threshold and makes the line work better for low-income people.
It is clear the FPL is an inaccurate tool to measure poverty. Census figures claim to tell public audiences the truth about American poverty, while the FPL makes that close to impossible. In reality, poverty must be considered an issue of inequality, placed in the context of an increasingly wide gap between the highest and lowest income earners. Relative poverty, which compares quality of life for individuals within our communities, gives a better picture of the lived experience of poverty in the United States.
It is the Shriver Center’s position that while the federal poverty line is too low and does not present a holistic view of the income growth, assets, or opportunities available to low-income people, it is still important to maintain a national standard to measure progress and set goals. As long as antipoverty programs can use super-percentages and area median income, and as long as we recognize that the federal poverty line does not accurately determine who is poor in the United States, our resources are best used to develop and implement policies that improve the lives of low-income people rather than redefining the federal measurement.
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