Local view: Without government programs, poverty would be much higher
The latest data on poverty released Sept. 16 by the U.S. Census Bureau appeared to give credence to those who claim the War on Poverty was a failure. The claims of some that as a country we haven't been able to effectively address and reduce pove...
The latest data on poverty released Sept. 16 by the U.S. Census Bureau appeared to give credence to those who claim the War on Poverty was a failure. The claims of some that as a country we haven’t been able to effectively address and reduce poverty, despite our best efforts and investment into poverty-fighting programs, appear to be true - on the surface.
The official poverty rate has dropped from 15 percent to 14.5 percent, equaling about
45 million Americans. While those numbers are discouraging, this data does not show an accurate picture of poverty and the effectiveness of the War on Poverty. To fairly judge the effectiveness of the War on Poverty one should withhold judgment until the release of the Supplemental Poverty Measure, which is set to be released in November, rather than responding to the official poverty rate.
A problem with the official poverty rate from Census data is that it uses a measure developed in 1963 and defined as “three times the subsistence food budget” for families of given sizes. Where does the “three times” come from? Back in 1955, the Household Food Consumption Survey found that the average family of three or more spent one-third of its after-tax income on food; and this is still the measure for today - even after 59 years. The logic was that if the average family spent a third of its budget on food, then three times a family’s food budget would give an accurate estimate of a poverty income level; this number has been updated annually using the Consumer Price Index.
So there you have it; the official poverty data is based on food prices - not housing costs or transportation costs or health care or clothing costs or even the price of utilities such as water or heat for our homes in winter.
What the official poverty data fails to count - food, clothing, shelter and utilities - the Supplemental Poverty Measure does. The Supplemental Poverty Measure still uses the one-third notion; however, it isn’t based solely upon food consumption. The Supplemental Poverty Measure accounts for food, clothing, shelter and utilities with a multiplier that accounts for the costs of health care, transportation and other needs. The Supplemental Poverty Measure also is adjusted for both family size and housing costs in different regions, allowing for more accurate regional poverty data.
Another issue with using official poverty data to track the effectiveness of the War on Poverty is that official poverty data counts only cash income, including unemployment insurance, Social Security, SSI, education assistance, child support and alimony, assistance from outside the household and more. This is good. However, what the official poverty data doesn’t capture is the impact of many of the programs the government funds to aid people in poverty, such as SNAP, housing assistance and, most importantly, the Earned Income Tax Credit. Excluding the Earned Income Tax Credit means that if it gave every worker in America $200,000, the official poverty data would remain at 14.5 percent and 45 million Americans still would be considered in “poverty,” regardless of having $200,000 a year. What the official poverty data doesn’t capture is the non-cash benefits that greatly affect quality of life for low-income families.
The poverty rate may look high today (and it is too high), but it would be significantly higher without government programs such as the Earned Income Tax Credit, SNAP, SSI, Social Security, housing assistance, school lunches, energy assistance and unemployment insurance. Look at the official poverty data if you want to see what eliminating and reducing anti-poverty programs would do to America’s working families.
Noah Hobbs is a planner for the Arrowhead Economic Opportunity Agency (aeoa.org) in Virginia, Minn.