More than 15 million Americans are unemployed, homelessness has increased by 50 percent in some cities, and 38 million people are receiving food stamps, more than at any time in the program’s almost 50-year history.
Evidence of rising economic hardship is ample. There’s one commonly used standard for measuring it: the U.S. Census Bureau’s poverty rate. It guides much of federal and state spending aimed at helping those unable to make a decent living.
According to Richard Bavier, a former analyst for the federal Office of Management and Budget, already available data about employment rates, wages, and food stamp enrollment suggest that an additional 5.7 million people were officially poor in 2009. That would bring the total number of people with incomes below the federal poverty threshold to more than 45 million. The poverty rate, Bavier expects, will hit 15 percent – up from 13.2 percent in 2008, when the Great Recession first started to take its toll.
The current formula for setting the federal poverty line – unchanged since 1963 – takes the cost of food for an individual or family and multiplies the number by three, under the assumption that people spend one-third of their incomes putting meals on the table. While the formula may have been a good way to estimate a subsistence cost of living in the early 1960s, experts say food now represents only one-eighth of a typical household budget, with expenses such as housing and childcare putting increasing pressure on struggling families.
In addition, the official measure fails to account for regional differences in the cost of housing, it doesn’t include medical expenses or transportation, and at $22,000 for a family of four, the poverty line is considered by many to be simply too low. Nearly two decades ago, Congress asked the National Academies of Science (NAS) to revisit the official poverty measure and come up with recommendations for a new measure that would satisfy critics on both ends of the spectrum.
This past March, the Obama administration said it would use the NAS 1995 guidelines to update the federal government’s poverty calculation and promised to unveil the first new “supplemental poverty measure” in September of 2011. Under the NAS recommendations, Commerce Department expenditure data for food, clothing, shelter and other household expenses would be used to set a poverty threshold for a reference family of four – two adults and two children. Then a family or individual’s resources would be compared to that line by including income and in-kind benefits, with taxes and other non-discretionary expenses, such as medical expenses and child care, excluded.
Because many expect the new calculation will result in a higher poverty count, the March announcement met with fiery criticism from some conservatives who charged the federal government could ill afford to increase its safety-net spending. The administration’s supplemental poverty measure remains controversial, and some leaders on both ends of the political spectrum are urging Congress and the administration not to adopt the new formula for purposes of allocating federal funding or determining individual eligibility anytime soon.
Title: Collapse in Living Standards in America: More Poverty By Any Measure
15 million unemployed, homelessness has increased by 50 percent in some cities
Source: Global Research July 14, 2010,
Author: Christine Vestal, firstname.lastname@example.org
Faculty Evaluator: Peter Phillips, Sonoma State University