NEW POVERTY MEASURE DOESN'T ADD UP

The new Obama poverty measure fails. It flunks the test of political neutrality and is based on misleading statistics that not one American in 100,000 could possibly understand, says columnist Robert J. Samuelson.

That's because the new calculation would measure poverty on a sliding scale. Thus, if the average income of families in the United States increases so too does the poverty threshold. Talk about keeping up with the Jones. This new measure provides the perfect climate for left-leaning politicians to promote equalization of wealth through redistribution. The measure would bump poverty up 30 percent: more poverty equals more political fodder to argue for increased welfare.

Unfortunately, the method currently used to calculate the poverty rate is already skewed, creating a "crisis" of poverty in the United States:

  • This is because only a family's pretax income is included in total income when determining their poverty level.
  • Thus, despite the fact that the average poor household receives $28,000 dollars in welfare benefits annually, these benefits are not included in their income.
  • Not surprisingly then, even though the United States has increased welfare spending by thirteen-fold (adjusting for inflation) since the war on poverty began in 1965, the poverty rate has stayed much the same.

However, the standard of living for the poor has increased substantially:

  • Today, 43 percent of the poor own their own homes (80 percent have air conditioning and only 6 percent say they are overcrowded), approximately 75 percent own a car, 97 percent own a television, and nearly 80 percent have a VCR or DVD player.
  • This definition of poverty, as Samuelson notes, referencing the late Daniel Patrick Moynihan, is scaled up.
  • On the other hand, only about 2 percent of Americans report that they often do not have enough food to eat.

Rather than illuminating the problem of poverty, this faulty poverty measure will only obscure the most relevant facts. The result will be more government spending that we as a nation cannot afford and that does little help those in need.

Source: Rachel Sheffield, "New Poverty Measure Doesn't Add Up," Heritage Foundation, June 8, 2010; and Robert J. Samuelson, "Why Obama's Poverty Rate Measure Misleads," Washington Post, May 31, 2010.

For Heritage text:

http://blog.heritage.org/2010/06/08/new-poverty-measure-doesn%E2%80...

For Samuelson text:

http://www.washingtonpost.com/wp-dyn/content/article/2010/05/30/AR2...

For more on Economic Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=17

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