Here’s a development that could have significant implications if Barack Obama wins the presidency: He has endorsed the idea of updating the federal measure of poverty, a proposal that is slowly gaining some traction after years of being confined to quiet talk among poverty experts.
New York mayor Michael R. Bloomberg called for a new poverty measure this week, and Democratic Rep. Jim McDermott of Washington held a hearing on his own proposal yesterday in the House Ways and Means Subcommittee on Income Security and Family Support, which he chairs.
But Obama’s support for the idea has the potential to advance the idea significantly, if he wins the election and pushes for it aggressively.
“Senator Obama knows that the federal poverty guidelines, which were developed decades ago, simply do not take into account the rising costs of child care, health care, transportation, and housing that make it difficult for many families to make ends meet in our globalizing economy,” campaign spokesman Nick Shapiro told me yesterday.
“Senator Obama believes that we should modernize the federal poverty guidelines to more accurately reflect the costs of living and the economic pressures on American families. Without an accurate measure of poverty and economic insecurity in America, we will not be able to fully tackle the effects of these problems on our children and families.”
John McCain hasn’t taken a position on the idea yet, campaign spokesman Taylor Griffin told me this morning.
The method of calculating the federal poverty line has been a back-burner issue for years among poverty experts because it hasn’t been updated since the 1960s. At that time, food cost a third of a typical family’s budget, which isn’t true anymore — it’s only about one seventh of a typical family’s costs now. At the same time, though, housing and work-related costs have become much more expensive than they were when the poverty guidelines were drawn up.
So the use of the outdated poverty measure, according to experts who testified at McDermott’s hearing yesterday, has had the paradoxical effect of underestimating a modern family’s expenses while also underestimating the amount of help they get from antipoverty programs like food stamps, housing assistance and the Earned Income Tax Credit.
The current measure “simply does not reflect this common sense understanding of what it means to be poor in 2008,” Douglas W. Nelson, president and chief executive officer of the Annie E. Casey Foundation, testified at yesterday’s hearing.
Instead, Bloomberg called for a new measurement, based on a 1995 proposal by the National Academy of Sciences, that would count the benefits of the antipoverty programs but also account for the growing costs of housing, transportation, utilities and out-of-pocket medical expenses. McDermott’s bill would require the Census Bureau to come up with a similar standard.
(Update: Bloomberg praised the Obama campaign’s announcement in a statement released Friday night. “Poverty is one of the great challenges of our day and I applaud Senator Obama’s campaign for standing up for a more honest way of measuring it,” Bloomberg said. “Without an accurate look at our nation’s problems, it is hopeless to expect to address them.”)
Changing the federal guidelines could, in theory, have a major impact on how many people are eligible for a wide range of programs that are tied to the poverty rate, from Medicaid and the State Children’s Health Insurance Program to Temporary Assistance for Needy Families and food stamps. That’s probably the biggest reason the idea has never gotten off the ground. (McDermott says any eligibility changes wouldn’t be automatic in his bill; they’d be decided on a program-by-program basis.)
And even with a president’s support, there would be years of inertia to overcome. But now that it has Obama’s backing, the idea can’t be dismissed as just another academic pipe dream, either.
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Comments
If Obama wins the presidency, we can add everyone's name to the poverty list.
Posted by: Jacknut
| July 21, 2008 11:04 AM
Finally! The Federal Poverty Level has been around for 40 years and has never been an accurate assessment--on either side of the aisle--of what it takes to get by in America. I am so glad this issue is finally out there. Maybe one day soon we'll be able to talk about poverty using real numbers. No matter which policies you support, real numbers should be a good thing.
Posted by: skt822
| July 21, 2008 1:27 PM
It's long overdue! Our country is "poor" in its inability to help families get out of poverty. Too many working poor families have seen that a simple $1.25/hour raise could make them go over these false poverty guidelines and lose basic income supports which enable them to build their economic security. The term working poor should be erased from our society; if you are working full time you shouldn't be poor! Maybe with a real indication of the number of American families that cannot make ends meet, the shame of it will be revealed and we can finally bring some relief to all those who need it.
Posted by: pv415
| July 21, 2008 1:44 PM
DC-based Wider Opportunities for Women (WOW) applauds recent discussion regarding a new more modern measure of poverty and calls for action! The Income Security Subcommittee of the House Ways and Means Committee hearing, Mayor Bloomberg’s work and Senator Obama’s remarks mentioned in this article are all good first steps toward addressing the deep flaws in the current measure in use since 1964.
The nation requires an official measure of poverty that genuinely helps identify those who are currently and potentially in need of attention and assistance. For many years, WOW and others have advocated an alternative poverty measure that does not rely solely on a ratio based on the cost of food. WOW has advocated for the development of a measure which is geographically specific and that reflects the reality of families today including the fact that whether one is single parent or in a couple both adults work for a substantial period of time. Thus, such a measure must incorporate working families’ real costs, and responds elastically and periodically to changes in prices.
For more than ten years, WOW has led the Family Economic Self-Sufficiency Project in 35 states and the District of Columbia. At the heart of this work, undertaken in conjunction with state and local governments and advocacy groups, is the Family Economic Self-Sufficiency Standard (“the Standard”),[1] a measure of economic security that the proposed decent living standard may resemble. The Standard reflects true, up-to-date, geography-specific costs of living for 70 types of working families. Importantly, the Standard presents minimum income needed to cover families’ basic costs of food, housing, transportation, child care, out-of pocket health care, taxes and miscellaneous expenses (such as household and clothing costs) if they are to live without public or private assistance.
More recently, WOW has extended its work to those 65+ with the Elder Economic Security Initiative. Legislators, state administrators, direct service providers, advocates and seniors themselves have welcomed the Index after years of frustration with policy driven by the antiquated federal poverty threshold. The Elder Economic Security Index[2] has already had an impact in affecting policy and opinion since it was released. For instance, the data in California was released less than 5 months ago and already the findings of the California Index have made their way into state legislation in support of “shared housing” for special needs housing assistance recipients and reducing their rent to 20% of income - Assembly Bill 2521.
A measure such as the Family Standard or the Elder Index should be the benchmark of true family need, a societal goal that goes beyond the avoidance of deprivation.
To learn more about WOW’s work, please visit: http://www.wowonline.org/
________________________________________
[1]The Self-Sufficiency Standard was developed by Dr. Diana Pearce of the University of Washington who at the time was Director of the Women and Poverty project at WOW.
[2]The Elder Economic Security Standard™ Index was developed by the Gerontology Institute at the University of Massachusetts Boston and WOW.
Posted by: WOW
| July 21, 2008 3:21 PM
The workforce comprises 28% who are either unemployed (5.5%), working part-time involuntarily or dropped out (6.1%) or working full-time for less than poverty wages (16.4%). (See njfac.org)
Inequality.org reports that the top 1% earn more annually than the bottom 60%, and Federal Reserve reports that 1% own more than 91%. Our society should grapple with the concept of economic fairness. The Working poor should be eliminated. Policy measures can improve the standard of living for a large segment of the working U.S.
Posted by: BenL8
| July 28, 2008 1:53 PM
This is a major step which will improve the lives of many Americans! Go Obama! And we need an accurate count of those unemployed. Our government does not count people who no longer sign up for unemployment benefits, those soon to be released from prison, or those working part-time who need full time work. And check out HR 1050, "A Living Wage, Jobs for all Act" introduced by Congresswoman Barbara Lee of Oakland, CA
Posted by: campaign to abolish poverty
| July 28, 2008 2:41 PM
The proposal rests on the respectable view that more information is better than head-in-the-sand ignorance. We don't know if accurate statistics about the extent of poverty in the US will move politicians, voters and taxpayers to support the sustained and costly efforts to reduce or to eradicate it. But it's better to know the facts than to persist in ignorance.
Posted by: SeriousThght
| July 28, 2008 5:36 PM
Kudos to Obama, and kudos to my congressman! Maybe 20 years' seniority and chairing a subcommittee are worth something.
Posted by: JonSM99
| July 29, 2008 10:32 PM
The official measure of poverty is based on the money families spent for food in the 1950s... seems a little bit out of date to me! I don't know of any other country in the world that uses such a poor measure. It makes sense that a forward looking candidate would want to change the way we measure poverty from the way we did it in the last century to something more accurate.
Posted by: StevenWallace
| July 31, 2008 3:33 PM
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