tags: poverty level, poverty threshold, federal definition of poverty, Michael Bloomberg, NYC, politics, society
Of all the preposterous assumptions of humanity, nothing exceeds the criticisms made of the habits of the poor by the well-housed, well-warmed, and well-fed.
~ Herman Melville
How do you define poverty? Do you think it is the lack of nutritious food, clean clothing, reasonable housing and adequate health care? Even though your definition of what constitutes poverty probably hasn’t changed much during your lifetime, the basic financial resources necessary to keep you from being impoverished have changed dramatically during this period of time. Yet, did you know that the federal poverty level is determined on the basis of a 1955 government study that found that people spend one third of their after-tax income on food? Basically, in 1960, the government determined the federal poverty level by tripling the amount of money that people spent on food alone in 1955.
I probably shouldn’t have to point out that things have changed tremendously in 53 years, especially since most of us were born within the past fifty years. Currently, the Federal Bureau of Labor Statistics recently found that most Americans spend approximately one-eighth of their after-tax income on food. But even then, there are more “food insecure” people than ever before who need help getting enough to eat each month. For example, I live in a neighborhood where there are a lot of working poor people, and from what I can see, most of them do not have access to adequate amounts of nutritious foods. Instead, they subsist mainly on cheap but calorie-dense foods and gigantic sodas sold by McDonald’s, Pizza Hut, and Dunkin’ Donuts — when they can afford to buy food at all.
There are two food banks in my neighborhood (which I also try to rely on), but those food banks are open during the wee hours one morning each week, unless it’s a holiday, when they are closed, of course. Even though they are supposed to be open for two hours per week, they run out of food within literally minutes and close their doors, which means that you need to be in line at least half an hour earlier if you want some food from them. Worse, the food they provide is uniformly starchy and minimally nutritious, and it is severely rationed so it is not enough to feed one person for one week, if you are lucky enough to get anything at all.
So just based on food purchases and the fact that even food costs are unevenly inflated throughout different regions of the country, the federal definition of poverty is absolutely ridiculous because the feds do not take into account the cost of anything else; rent, health care, medications, clothing, utilities, cleaning supplies, child care, transportation, and fuel for heat and cooking, just to name most of the necessities, most of which are increasing in cost far faster than food itself. For example, rent costs alone often consume as much as one-half to three-fourths of a person’s after-tax income, and sometimes more than that. Neither do they take into consideration the dramatic variations in the basic cost of living between, say, Manhattan, NY, versus Manhattan, Kansas.
So the feds identify a magical dividing line between poverty and not-poverty using an antiquated and “stupid-ified” measurement that ignores important regional inequities in inflation and costs. Further, they act on a one-definition-fits-all model that is blind to the tremendous differences that exist between the cost of living in one region of the country versus another, and further, they ignore the fact that some individuals have special needs (medications, for example) that can easily bankrupt anyone who is living at even 50 percent above the federal poverty level, for example.
Nevertheless, based on this ridiculous model, the current poverty threshold for a family of two adults and two children in the USA is $20,444, which is simply laughable for NYC and other medium to large cities: I dare any politician to work out a livable budget that would support a family of four on that paltry sum, especially since rent alone in NYC is 45 percent higher than the national average — which is close to or exceeds 20K for a family of four.
The sad fact is that, according to the current (antiquated) poverty statistics in use, NYCers are more likely to be impoverished than the national average (below);
In response to the dire needs of NYCers, Michael Bloomberg, mayor of NYC, is pushing to change the federal definition of poverty to one developed by NYC’s Center for Economic Opportunity that is modeled on a proposal by the National Academy of Sciences. Both models set the poverty threshold at roughly 80 percent of the median amount of what families spend on normal living expenses like food, shelter, utilities and clothing.
Additionally, this model is responsive to variations around the country: it factors in regional differences in the cost of living. For example, using that model, the poverty threshold for a family of four in NYC would increase to an annual income of $26,138 — which would place nearly one in four NYC households at or below the poverty level, an increase in NYC poverty of 19 percent.
Oh, yes, I said “income” deliberately because most poor people in NYC actually do work (below);
Speaking of employment, most people view a college education as a certain escape from a lifetime of poverty, but they should think again because it is not such a sure thing, especially in NYC. College students, most of whom qualify as impoverished while in school, nevertheless can look forward to an uncertain employment future, provided that they manage to graduate with a college degree. Despite having done “everything right,” these college grads can find themselves still facing years or even a lifetime of unemployment, underemployment and poverty, although now their penury is combined with a substantial educational debt (below);
So life is not fair, even for those who possess the prerequisite desire, intelligence, commitment, desire, good health (and good luck) and the ability to work hard to change their circumstances.
This proposed new model for defining poverty, which is endorsed by Mayor Bloomberg, would more accurately reflect the real number of people living in poverty because it would also include government benefits, such as food stamps and rent subsidies, as part of a family’s total income. One might predict that using this new standard would decrease the overall number of people living below the poverty level, but this isn’t the case. There would still be a larger number of residents living in poverty in NYC, although the face of poverty would change. Because there has been concerted federal and state investments into aiding impoverished children and teens, adopting this new standard would result a dramatic decrease in the number of impoverished children but the elderly who qualify as poor would be on the increase again.
Unfortunately, speaking of the elderly, developing a new standard for poverty should include pharmaceuticals in their overall cost of living — something that politicians and healthy people often overlook. Unfortunately, despite contributions from social security and medicare, 32 percent of NYC’s elderly find themselves impoverished due to the high cost of their medications.
Speaking of the costs of health care and pharmaceuticals, these costs affect a fair number of young people, too. For example, the new Medicaid law that was passed in 2006 stipulates that to qualify for Medicaid, an individual cannot earn more than $750 per month, and this includes those living in NYC. This conveniently ignores the fact that the vast majority of rent-stabilized studio and one-bedroom apartments in NYC cost more than $750 per month, so it is nearly impossible for a single person in NYC to qualify for Medicaid, unless they are unemployed and very likely homeless. Don’t believe me? Try being a young person battling with chronic mental or physical health problems while trying to stay employed and housed on a typical “good job” that does not provide adequate (or any) health insurance — it is just not possible. Nevermind that a fair number of these “good jobs” also require one or more college degrees.
Another problem that has not been addressed in the definition of poverty is child support. Oddly, child support payments are not a tax credit for low-income workers, whereas a person who is a single parent realizes an increase in income due to the earned income tax credit (in addition to child support). Fortunately, the EITC does reduce poverty for single parents, but it does nothing to address poverty issues among non-custodial parents who are also contributing financially to supporting their children.
In short, my argument is that the federal poverty threshold is insensitive to inflationary and cultural changes and thus, is worse than useless: it is cruel and harmful. The question I am addressing here is not who is to blame or whether everything can ever be fair for everyone because of course, life isn’t fair — instead, I am talking about our humanity as a nation. I agree with Michael Bloomberg that we must examine the inequities of opportunity and income along with the realities of living expenses and act in a compassionate and constructive way to address these inequities for the betterment of society as a whole. The way to do this is to create a new definition of poverty that is based upon a documentable regional reality, that helps vulnerable individuals and families, and all those who are employed but are still too poor to enjoy the fruits of their labors.
Read More About This:
American Enterprise Institute (2005) Alternative Measures of Income Poverty and the Anti-Poverty Effects of Taxes and Transfers [free PDF].
National Academy of Sciences Measuring Poverty: New Approaches (C. Citro & R. Michaels eds, National Academy Press, 1995).
Alternative Poverty Estimates Based on National Academy of Sciences (NAS) Recommendations Using Revised Tax Model: 2001 and 2002 [PDF table].
Create your own income and poverty tables.
NYC poverty facts and tables (used above).
US Census Bureau Poverty Measurement Studies and Alternative Measures (a lot of useful studies and links here).