How Much Is Too Little?August 3, 2007
How should we measure poverty? Is the current standard accurate and adequate? The questions posed before the House Ways and Means Subcommittee on Income and Family Support in a hearing on Wednesday have far-reaching consequences for millions of Americans.
Mark Greenberg, Executive Director of the Center for American Progress’s Task Force on Poverty, testified before the subcommittee, along with four other invited witnesses, on whether the current formula for determining who is in poverty is adequate, and how the measure of poverty should be improved.
Greenberg emphasized that the current measure of poverty is deficient because it was set in the early 1960s, and has been adjusted only once for price inflation since that time. As a result, the measure of who is in poverty has fallen further and further below the amounts needed to meet basic needs and make ends meet. In 1959, the federal poverty level was at an amount representing 49 percent of median income for a family of four. By 2005, it had fallen to 28 percent of median income.
Greenberg explained that in addition to using outdated thresholds, the existing measures are flawed both because they don’t count some things as income that should be considered—for example, benefits from the Earned Income Tax Credit and Food Stamps—but they also count income that isn’t actually available to meet basic needs—for example, money that has to go to pay taxes or money that has to be paid to meet the cost of going to work.
Greenberg urged that the poverty measure be improved and updated so that it does a better job of reflecting the real costs of meeting basic needs and counting income. He spoke in favor of using a set of recommendations from a National Academy of Sciences panel as the starting point. He also urged that in addition to measuring income poverty, government should begin regularly tracking and reporting a set of additional measures: the number of people without enough income to “make ends meet,” the number below a specified percentage of median income (often used in other developed nations as a measure of “relative poverty,” and the number of people who are “asset poor.”
Greenberg explained that the
Center for American Progress’s Task Force on Poverty had emphasized that while 37 million Americans were living in poverty, a far larger group faced the challenge of making ends meet, and the task force had developed its recommendations in ways that sought to help both groups.
(Read Mark Greenberg's testimony here.)Continued @
http://www.americanprogress.org/issues/2007/08/greenberg_poverty.html FOR IMMEDIATE RELEASE
July 25, 2007
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McDermott Announces Hearing on Measuring Poverty in America ~ excerpt ~
BACKGROUNDOn August 28th, the Census Bureau will release statistics on the depth and breadth of poverty in 2006. In 2005, nearly 37 million Americans were officially poor—an increase of 5.4 million since 2000. In 2005, the poverty threshold for a family of four with two children was $20,444.
The official poverty rate is a critical indicator of how widely shared prosperity is in the economy, a key benchmark for targeting resources towards the most disadvantaged, and a useful measure of the impact of programs and policies on vulnerable populations.
However, there is a broad consensus that the poverty measurement has become less accurate in highlighting economic hardship than when it was created more than 40 years ago. For example, the poverty thresholds were created in relation to consumption when the average family of three or more persons spent about one-third of its after-tax income on food. Today, food demands only one-seventh of that family’s budget, while the share of income devoted to other expenses, such as housing and health care, has grown. Furthermore, the Federal poverty threshold for a family of four represented about 50 percent of median income when first devised, while it now represents only about 30 percent of median income. Finally, the current poverty measurement fails to count certain benefits, including the Earned Income Tax Credit and food stamps, as well as certain work-related expenses, including child care and transportation.
There have been numerous suggestions for revising the poverty measure, including recommendations published in 1995 by a National Academy of Sciences Panel on Poverty and Family Assistance. The panel recommended both changes in how family resources are calculated and corresponding adjustments to the poverty threshold. A number of options were provided, nearly all of which would have increased the number of Americans considered poor.
In announcing the hearing, Chairman McDermott stated:
“We need a poverty measurement for 2007, not 1963. Unfortunately, our poverty measure has not kept pace with societal changes over the past half century. Improvements are needed so we can fully understand how many Americans are denied access to a reasonable standard of living, and so we can target resources to those most in need.”http://waysandmeans.house.gov/hearings.asp?formmode=view&id=6263Subcommittee on Income Security and Family Support
Hearing on Measuring Poverty in America
Wednesday, August 01, 2007Hearing Advisory Witness List and Testimony (Printer Friendly)Witnesses Panel:
Patricia Ruggles, Ph.D., National Academy of Sciences
John Iceland, Ph.D., Associate Professor, Sociology Department, University of Maryland, College Park
Nancy Cauthen, Ph.D., Deputy Director, National Center for Children in Poverty, Mailman School of Public Health, Columbia University
Douglas J. Besharov, Joseph J. and Violet Jacobs Scholar in Social Welfare Studies, American Enterprise Institute for Public Policy Research
Mark Greenberg, Executive Director, Task Force on Poverty, Center for American Progress
Submissions for the Record Hearing Transcript Printed Hearing http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=581 
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