Monday, July 14, 2008

The Definition of Poverty

An article in the NY Times on a proposed new definition of "poverty" in NYC:

The nation’s poverty measure was developed in the 1960s and was based on a 1955 study that showed that poor Americans spent roughly a third of their after-tax income on food. Ever since then, the country’s poverty levels have been gauged by tripling the annual cost of groceries.

That model, while updated for inflation, has been criticized for being out of date, inaccurate and not taking into account how expenses like housing vary nationwide. According to the federal Bureau of Labor Statistics, families nowadays spend one-eighth of their income on food, with more money going to transportation, child care and housing. Nor does the federal model measure the financial impact of government assistance programs.

I'm not sure whether this implies the cost of food has dropped so much, or that we're spending more on big cars, big houses, and big operations. I'm also cynic enough, and conservative enough, to point out that "poverty" is relative. When LBJ launched the "war on poverty", it was won.

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