August 28, 2007
A MATTER OF VOLITION:
Big Decline in U.S. Poverty Rate (AP, 8/28/07)
The nation's poverty rate dropped last year, the first significant decline since President Bush took office.The Census Bureau reported Tuesday that 36.5 million Americans, or 12.3 percent -- were living in poverty last year. That's down from 12.6 percent in 2005.
The median household income was $48,200, a slight increase from the previous year. [...]
The poverty level is the official measure used to decide eligibility for federal health, housing, nutrition and child care benefits. It differs by family size and makeup. For a family of four with two children, for example, the poverty level is $20,444.
Note that poverty level in America is roughly the GDP per capita of the Grecians and that if that family of four worked just 80 hours a week at $8.50 an hour they'd have an income of $35, 360. You have to really make a concerted effort to remain "poor" in America. Posted by Orrin Judd at August 28, 2007 12:35 PM
You're just being obtuse now. With only $35K, after barely paying off the necessities--child care, the mortgage, payments on 2 new cars (plus gas), going out to a restaurant a couple of times a week, cable TV + internet, that big screen TV, annual cross-country vacation, etc.--there's nothing left for the luxuries!
Posted by: b at August 28, 2007 1:40 PMIt's more of a concerted lack of effort really.
Posted by: Brandon at August 28, 2007 2:05 PMThe big scam, of course, is that the poverty level is based on a fraction of median income, rather than any cost-based standard.
Posted by: Mike Earl at August 28, 2007 3:24 PMChuckle, b.
Poverty measurements exclude benefits like the Earned Income Credit, food stamps, Section 8 housing subsidies. And it includes college students over 18 who are living on financial aid + parents.
I tried googling the Census Bureau and HHS websites to find their definition of poverty. But both seem to be using circular definitions. Example: "Computation: Total family income is less than the threshold appropriate for that family."
What is "appropriate"? A: Above the povery level.
Posted by: Gideon at August 28, 2007 4:13 PMThe Census Bureau definition of poverty can be found here.
The short story is that, in 1955, the Department of Agriculture priced out four sample meal plans, including an economy plan. They determined that poor households spent 1/3 of their income on food. Therefore, the poverty threshold was set at three times the cost of the economy plan.
In 1964, Social Security adopted this definition, and set poverty thresholds for a variety of different types of households. At that point, they stopped repricing the economy food plan and simply inflated it each year by the annual increase in the price of food. In 1969, this definition was adopted for the entire government, with the thresholds being inflated by the Consumer Price Index. In 1981, the different family types were consolidated so the only variable was people per household, up to nine. The government also started using the Urban CPI as the annual inflater.
Also, income for poverty threshold purposes is pre-tax monetary income (and thus doesn't include EITC), and ignores capital gains and in-kind benefits (e.g., public housing, Medicare and food stamps).
Posted by: Ibid at August 28, 2007 5:09 PMAre we losing one of John Edwards' Americas?
Posted by: ic at August 28, 2007 9:19 PM