WON THAT WAR:

The Census Bureau's poverty line is set as a fixed level of pre-tax cash income adjusted by family size and composition and, over time, for urban consumer price inflation (CPI-U). That it is a pre-tax measure means the poverty calculation ignores the impact of tax credits and in-kind transfers like housing and nutrition assistance. And using the CPI-U overstates the inflation in the price of goods purchased by poor people. 

Correcting for tax and inflation problems alone make a difference, according to Bruce Meyer and Jason Sullivan, economists. The official poverty rate climbed between 1972 and 2015 from 11.9% to 13.5% of the population. But after-tax income poverty using a better measure of price change fell from 15.6% to 7.3% over the same period. And a measure they design that uses consumption rather than income to define poverty suggests a decline from 16.4% to 3.0% since 1972.    

These measures better reflect changes in household welfare. Bruce Sacerdote, an economist at Dartmouth College notes the poorest quarter of households in America had 0.75 vehicles per household in 1970 compared to 1.4 per household in 2015. In 1960, more than one third of households in the bottom quarter of the income distribution lacked indoor plumbing; by 2015 virtually all households had indoor water and sewer systems. Microwave ovens have spread from luxury to ubiquity alongside mobile phones--microwaves are now owned by 97% of households.

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