A new way to define poverty
The U.S. Census Bureau recently released a new poverty measure to replace the much-maligned official poverty measure that has not changed since 1963, when Ms. Mollie Orshansky, a well-intentioned Social Security Administration employee, created it.
Scholars and policymakers had long complained the 1963 measure was too simplistic and might give an inflated count (if one is conservative) or an undercount (if one is liberal) of the actual number of Americans in poverty. The old measure did not take into account differences in the cost of living in different areas, and did not count income from sources such as food stamps (now called SNAP) or tax credits like the Earned Income Tax Credit (EITC). It also did not account for large expenses like medical costs and child care. The measure had stayed the same for 47 years for two main reasons — political and practical. Given that adjusting for cost of living, government transfers and other important budget items would likely increase the number of Americans living in poverty, no presidential administration was eager to change the measure. Continue Reading
