Poverty line in the United States

In the United States, official statistics on poverty and the official poverty line are kept by the US Census Bureau. Other federal and state agencies, however, use other definitions of poverty, for example, to do means testing for welfare programs.

Table of contents

1 Controversy 2 History 3 External links 4 References

Controversy

The US poverty line is controversial, with some advocates claiming it understates poverty in the US and other advocates claiming it overstates poverty.

Many of the lowest 10 percent of U.S. households - all officially "poor" - have possessions which were considered luxuries 50 years ago: [1]

• 91% own color TVs
• 74% own microwave ovens
• 55% own VCRs
• 47% own clothes dryers
• 42% own stereos
• 23% own dishwashers
• 19% own computers

These statistics have led many people to question the definition of "poverty level": how can people how have so many luxuries be called "poor"?

History

The first official poverty line for the United States was developed by Mollie Orshansky for the Social Security Administration in 1964. It was amended, then later adopted for the Lyndon Johnson administration's War on Poverty as a general statistic on poverty. Orshansky's definition calculated the minimum amount of income a family unit would need to purchase food for all family members to eat the cheapest nutritionally acceptable diet described by the United States Department of Agriculture. She then multiplied that number by three, the average percentage that U.S. families spent on food. Orshansky did not intend this figure to measure the minimum income necessary for survival. Rather, she meant this as a statistical tool in order to facilitate the studying of issues of poverty. (From Fisher, 1992)

The U.S. Census Bureau now reports:

If a family's total income is less than that family's threshold, then that family, and every individual in it, is considered poor. The official poverty thresholds do not vary geographically, but they are updated annually for inflation using the Consumer Price Index (CPI-U). The official poverty definition counts money income before taxes and does not include capital gains and noncash benefits (such as public housing, Medicaid, and food stamps).

Official figures say 10% of Americans' cash income places them below the poverty line. These cannot be directly compared with official figures in other countries, as each country uses different measurements.

External links

• Poverty yardstick variables - By Bruce Bartlett, columnist for ''The Washington Times
• http://www.census.gov/hhes/poverty/poverty00/table5.html Percent of People in Poverty, by Definition of Income and Selected Characteristics

References

• Fisher, Gordon: The Development of the Orshansky Poverty Thresholds, May 1992