poverty redefined?


The US Census Bureau has redefined poverty in the USA. Its kind of like having someone give you a new report card for a past semester.


(I am certain this was a West Wing episode … it was)

It’s from a Season 3 episode called “Indians in the Lobby” where two White House staffers discuss a political problem:

SAM: On Monday, the OMB is putting out a new formula for calculating the
poverty level.
TOBY: What’s the problem?
SAM: It’s a good news, bad news thing. Under the new formula, poverty is up two percent. It was anyone under $17,524, now it’s $20,000.
TOBY: What does that shake out to?
SAM: Four million new poor people.
TOBY: Four million?!?
SAM: Yeah. Obviously, that’s the bad news.
TOBY: Yeah…
SAM: The good news is more people will be eligible for benefits.
TOBY: And taxpayers are nuts about that. Let’s get back to the bad news. Four million people became poor on the President’s watch?
SAM: They didn’t become poor. They were poor already. And now we’re calling them poor.
TOBY: What was wrong with the old formula?
SAM: I don’t know.
TOBY: Find out.
SAM: It is possible that this is a statistical reality and not a political finding.
TOBY: Well, get together with somebody at OMB and find out what was wrong with the statistical reality of the old formula.

I love the fact that West Wing pointed out several years ago that the poverty formula wasn’t so good.

So where did that old formula come from? And for that I will use West Wing again. Here Sam talks to Bernice from the office of management and budget, about where the old formula came from:

SAM: Well how was the old one reached? The current one.
BERNICE: In 1963, an eastern European immigrant named Mollie Orshansky, who was working over in social security, came up with it. Food was the most costly living expense where she came from.
SAM: Our cost of living formula for the last 40 years has been based on life in Poland during
the Cold War?
BERNICE: This is what I’m talking about. I mean, food doesn’t account for one-third of a family’s budget. Housing is more expensive than food. The current model also doesn’t take into account transportation and health insurance. So let’s call the current model the old
model and sign off on the new model.

Ok. Sorry. I digressed because I loved West Wing and I often find it addressed many issues we are addressing today.

Anyway. The new definition.

One day someone wasn’t poverty stricken and the next they were.


And one day someone was poverty stricken and the next day they weren’t.


Here is the graph:

New poverty versus old poverty/IBM: http://www-958.ibm.com/software/data/cognos/manyeyes/visualizations/new-us-poverty-v-old-us-poverty


Let’s be clear. All the people wandering in and out of the new and old poverty statistics are struggling in some form or fashion. What moves someone out of poverty (I believe this is the definition) is that they have “attained a level of income where discretionary purchases are enabled.” In other words … it seems to define a line between ‘deprivation’ and sustenance.  A good line in my mind. Well.  Not good … but fair assessment.

Now.  I am not clear on how discretionary discretionary is but suffice it to say that if I were dropped to whatever the number was that was slightly above poverty I could make no discretionary purchases … in fact … I would have to completely reassess all my spending & living behavior.


This isn’t about me. And this isn’t really the way we (USA) is defining poverty … what I suggested above is how global poverty is defined (in a broad sense)

This is about redefining USA poverty.

Sometimes I believe we go number crazy.

Should we care what the number of people living in poverty is? Well. Yeah, I guess so. I imagine it gives us some measurement with regard to how Americans have the ability to live the ‘american dream.’

And I think that is good.

Ok. That said … this redefining is weird.

The government is making the definition of poverty pretty odd … it eliminates any connection between poverty and “deprivation” — by reclassifying poverty as being all about “inequality.”

The Heritage Foundation states:

Under the new measure, a family will be judged poor if its income falls below certain specified income thresholds or standards. There is nothing new in this, but unlike the current poverty income standards, the new income thresholds will have a built-in escalator clause. They will rise automatically in direct proportion to any rise in the living standards of the average American.

The current poverty measure counts (albeit inaccurately) absolute purchasing power (how much meat and potatoes a person can buy). The new measure will count comparative purchasing power (how much meat and potatoes a person can buy relative to other people). As the nation becomes wealthier, the poverty standards will increase in proportion.


Does this mean 15% of US is in full deprivation mode within the new definition? Nope.

Just means a lot of people aren’t living the American standard of living.

Weird? Yup.

But let me move on from that nonsense …

Frankly, when I see numbers like 15 to 20% of Americans living within some band of poverty levels (however it is defined) … well … that doesn’t seem right.

No. in fact I am sure.  It is wrong.

I do not believe in income leveling (or redistribution).

But I also do not believe a country as wealthy and healthy as ours should have anything more than single digits in poverty (I am going to assume for assumption sakes that 0% is impossible just due to some people not making any effort to not be poor).

And the US Census poverty redistribution made it more clear that more older HHlds and more white HHlds are wallowing in some sort of poverty/wealth constraints than ever before.


All People            TOTAL   46,602  15.2       49,094   16

Under 18 years AGE       16,823  22.5       13,622   18.2

18 to 64 years    AGE       26,258  13.7       29,235   15.2

65 years and older AGE 3,520    9             6,237     15.9

Do I have a solution? Nope. Certainly not an easy one.

But I do have a thought.

Many of us sit around moaning about the economy and paying our bills and saving for the future. Well, my friends, there are a shitload people out there who have it a shitload worse.

And, by far, they are not lazy nor untalented (things often associated with the words ‘living in poverty in the USA”).

We need to find some solutions.

I say that as I also struggle with what exactly is poverty in the united states.

I do know if you want to see real poverty you don’t go to a Walmart.

You should visit one of the slums surrounding a Latin American/Caribbean or African major city (maybe even a major European city … like Paris).

And while you’re at it, visit a solidly middle-class neighborhood.  By American standards, those neighborhoods would be poor, but they are neat and orderly neighborhoods … built and maintained with pride (regardless of their income level).

In those neighborhoods the residents are thrifty, hardworking, and well-mannered as well as determined to give their kids a good education.

Suffice it to say that people with lower ‘on the cusp of poverty’ levels of income in non-USA countries have a different attitude with regard to how to live and maintain every day life.

America is unique in respect to its view on poverty.

But who cares (no matter how absurd our definition may be).

The fundamental question is “why is a poor person poor?”

Generally a person is not poor by choice, the grace of God or some fault of his own.

A person is poor typically because he is denied opportunities.

To solve poverty we need to get to the root of the problem. The deep-rooted causes of deprivation, starvation, and social and economic exclusion need to be addressed.

We need to look beyond the dollars & cents and seek to better understand the social inclusion/exclusion aspects of poverty.

The social inclusion approach helps identify the processes, social relations, and economic and political arrangements in the society which contribute to poverty and, therefore, we would have a better opportunity to begin building solutions that provide attainable opportunities so people can rise above poverty/deprivation.

All that said … maybe looking at numbers like this does matter.

Because when I see something like 15.9% I see a large enough group that it should matter … to you & me.

Written by Bruce