Measuring Poverty

The poverty figures are both less accurate and more hopeful. It sounds awful to say that 36.5m Americans are living in poverty. But “poverty” in America, as defined by the Census Bureau, does not mean destitution. A typical poor American lives in a three-bedroom house with a car, air-conditioning and two televisions. His children actually eat more meat than rich kids do. And he receives substantial benefits that the census bizarrely excludes from its calculations.

Americans are deemed poor if their pre-tax income falls below a certain threshold—for example, $20,614 for a family of four. By this measure, the proportion of Americans who are poor is no better today than it was in the 1970s. But this is nonsense. The census ignores non-cash benefits such as government health insurance, food stamps and subsidised housing. It also ignores the earned-income tax credit, a wage subsidy for the working poor that is reckoned to be one of America's most effective anti-poverty measures. On the day the census report appeared, Michael Bloomberg, New York's mayor and a possible independent presidential candidate, called for a huge expansion of the earned-income tax credit and a serious re-think of how poverty is measured.

I agree, I think we need some new measurements for poverty. I find it pretty silly that most of the the anti-poverty programs do nothing to reduce the official rate of poverty due to the way it is calculated. Too bad Bloomberg isn't running for president, as it would be great to put this on the national agenda.

via The Economist