Poverty Line Problems: The History of an Outdated Measurement

In a followup to his latest infocomic exploring “What it means to be poor in America,” graphic journalist Andy Warner illustrates the idea behind “the poverty line” on KQED and the origins of the important measurement used for determining citizens’ eligibility for financial aide. According to the Poverty Threshold, 46.5 million American’s were living in poverty in 2012. The problem is, the poverty calculation is extremely outdated and many more American’s are actually living in poor economic conditions compared to the Census Bureau’s figures!

The poverty measurement was created by Mollie Orshansky back in 1963 which relied on the assumption that the average family spent about one-third of their income on food. In 1964 the Johnson administration declared a “War on poverty” which led to the Food Stamp Program, Medicaid and Medicare created within the year after. The government then needed a way to better understand what it meant to be poor, so they used Orshansky’s calculation to figure it out. So fast forward 50 years later and we are still using the same theory, however, much has changed since then!

First of all food is much cheaper now, and only makes up 7% of the average family budget, which just throws all the numbers out of whack. Also, we spend a lot more on things like childcare, transportation and healthcare now than ever before. Considering all this the poverty line still hasn’t changed one bit, nor adjusted for inflation or considered geography. If you happen to be living in New York, a liter of milk can cost you $1.32 compared to only $1.05 in a place like Los Angeles, while the rent is nearly double too.

 
If we don’t make improvements, people and families that really need financial support in these rough economic conditions to survive will continue to get overlooked. Hear more about the trouble with how we measure poverty on NPR’s Planet Money.

 

Infographic by Andy Warner via KQED