May 19, 1995
Poverty is always relative, but that does not make it less real. True, Americans whose food stamps give out before the end of every month don't suffer the severe malnutrition and marginal existence that defines poverty in many parts of the world. But that's little comfort to a hungry child, or to a desperate parent trying to rock that child to sleep.
For years, conservatives have claimed that government definitions misstate the extent of poverty in the United States. If the formula accurately reflected the effect of government benefits on household benefits, they argued, the poverty level in this country would drop dramatically.
Now conservatives are getting their wish -- but they don't particularly like it. A panel of experts convened by the National Academy of Sciences is recommending major changes in the way poverty is calculated. As it turns out, even with government benefits included, the new method of computing poverty would increase, not decrease, the ranks of officially poor Americans. That, in turn, would increase the number of people eligible for federal programs -- not a move likely to win approval from a Republican-controlled Congress determined to slash spending on social programs.
One key to the changes recommended by the panel is a new emphasis on disposable income, not simply on total household income. Coupled with a long-overdue decision to take into account regional cost-of-living differences, the Panel on Poverty and Family Assistance would overhaul a three-decades-old method of calculating poverty based primarily on the cost of food. That formula may have served a useful purpose in the past, but it does not adequately reflect the economic realities facing families in the 1990s.
Not only does it ignore the contributions to family income from government programs, but it also fails to factor in such major financial considerations as taxes, the cost of medical care or child care expenses. Moreover, the old formula has a restricted definition of "family," overlooking the financial arrangements of households in which couples are not legally married.
On balance, this sharper definition of poverty is expected to raise the number of Americans who qualify as poor. But critics were right in one important respect -- the current definition of poverty does overstate the number of families who qualify as poor even after receiving government benefits.
The important point is that it also overlooks the number of families who do hold jobs, work hard and still aren't able to climb out of poverty. In the long run, that kind of poverty can be every bit as dangerous as a culture of welfare dependence; it provides the ideal conditions for breeding political discontent.
