THE Census Bureau reported yesterday that the poverty rate in America held stable between 2011 and 2012, at about 15 percent. According to the official measure, poverty today is higher than it was in 1973, when it reached a historical low of 11.1 percent.
To many, this dismaying fact suggests that taxpayers waste billions of dollars a year fighting a war on poverty that has been largely lost.
But this position is wrong, for two reasons. The first is that the official measure is misleading — it measures only cash income, and it does not count benefits from many programs that help the poor. If they were counted, the rate would be closer to 11 percent.
Consider the Supplemental Nutrition Assistance Program, commonly known as food stamps, which was first put into nationwide use in the 1960s. The immediate benefits are easy to calculate: a dollar of SNAP subsidies spent on food frees up a dollar for low-income families to spend on rent, utilities or other needs. When SNAP benefits are counted as income, they lift almost four million people above the poverty line.
The earned-income tax credit is also ignored in calculating the poverty rate. Yet this program offers working low-income families with children about $3,000 a year. When these tax refunds are counted, they reduce the number of people in poverty by about 5.5 million people.
Social Security benefits are counted in the official measure, but their large antipoverty effect receives little attention. Without these benefits, the elderly poverty rate would have been more than 44 percent, instead of the actual rate of less than 9 percent.
But, says the critic, if all these programs have such broad effects, why has the poverty rate stayed so frustratingly stable? That’s the second flaw in the conventional wisdom.
All things being equal, such programs, whether we count them or not, should have reduced the official poverty rate across generations. But all things have not been equal. Although these programs help the poor, poverty remains high because inequality of economic outcomes has increased sharply since the 1970s.
quote:The article's point is that there are no measurements that show how many people are kept OUT of poverty. For all we know, poverty without the SNAP programs would be in the 20s.
adjusted for population, how much are we spending now compared to then?
For a history of the official poverty measure, see “The Development of the Orshansky Poverty Thresholds
and Their Subsequent History as the Official U.S. Poverty Measure” by Gordon M. Fisher, available at The Development of the Orshansky Poverty Thresholds and Their Subsequent History as the Official U.S. Poverty Measure.
After so many pages about the definition and measurement of poverty, perhaps the most appropriate way to close this paper is with a quotation from Mollie Orshansky: "Unlike some other calculations, those relating to poverty have no intrinsic value of their own. They exist only in order to help us make them disappear from the scene....With imagination, faith and hope, we might succeed in wiping out the scourge of poverty even if we don't agree on how to measure it."
SNAP keeps 4.4 million out of poverty, SS and Medicare keep approximately 30 million out of poverty.