Our official national lie – Americans in poverty

An outdated formula makes the U.S. family portrait brighter than it really is

August 06, 2012|Dan Rodricks

It's our official national lie — the number of Americans we consider poor.

Even as the U.S. Census Bureau prepares to report the highest level of poverty in 50 years, we are lying to ourselves about the number of Americans who can't make ends meet without government help or charity.

The federal government, using a formula developed nearly 50 years ago, defines poverty as pretax annual income of $23,050 for a family of four, and $11,170 for a single person. Imagine living by those numbers. Imagine living on $10,000 more per year, or even $5,000 more. American poverty might not constitute Third World poverty — our poor have microwave ovens and some own cars — but it's poor.

President Barack Obama and his Republican challenger, Mitt Romney, both offering themselves as champions of the "middle class," are part of the lie. Much of the "middle class" they claim to be speaking for is in reality poor, but neither seems inclined to use the word. For Obama, it would be an acknowledgment that more Americans have fallen behind during his tenure. For Romney, it would be like speaking a foreign language.

Just consider the real numbers in the Baltimore area.

Michael Reisch, a professor at the University of Maryland School of Social Work, sends his students out each year to calculate a subsistence family budget based on the costs of food, rent, household energy and other basics, and they always come back with numbers much higher than the government's poverty threshold: $30,000 to $50,000 a year for a family of four.

That's in line with deeper research. Consider the findings of a study on self-sufficiency conducted for the Maryland Community Action Partnership, the Columbia-based nonprofit that advocates for low-income families.

The author of the report is Diana Pearce, a social work professor at the University of Washington. She developed the self-sufficiency standards in the 1990s and has conducted such surveys in 37 states. It appears to be exhaustive work that factors in all kinds of real costs — food, transportation, child care, health care, housing — and geographic variables.

The 2012 report was her third for Maryland. This is some of what Pearce found:

•A single adult living in Baltimore County needs $30,373 annually to meet basic needs, nearly three times the government's poverty threshold.

•A family of one adult and two children — a preschooler and a school-age child — needs $61,998 annually for self-sufficiency.

•Baltimore's 2012 self-sufficiency standard for one adult with one preschooler and one school-age child is about $49,000 annually.

Pearce's standard calculates an ideal: "How much income a family of a certain composition in a given place needs to adequately meet their basic needs — without public or private assistance."

Even allowing for "advocacy bias," Pearce's numbers are so far from the official definition of poverty that anyone capable of real-world logic would see the lack of honesty in the government's calculations. Her model seems to match its boast as "a more comprehensive measure of income adequacy than the Federal Poverty Level."

Imagine if "income adequacy for self-sufficiency" were to be the new standard. Clearly, the bottom of our society would appear much larger than it does now.

Economists expect U.S. poverty to reach 15.7 percent of the population this year, the highest level since the mid-1960s. In some places, Pearce's self-sufficiency standard is three times higher than the federal poverty level. Using her calculations conservatively, close to a third of the U.S. population might not reach "income adequacy for self-sufficiency." That's about twice what we now consider poverty.

The primary reason for this is clear. Income levels in the U.S. have been moving to two extremes for three decades. While wealth has become concentrated at the top, millions of American workers have been stuck in low-wage jobs. Ten million American adults officially classified as poor are employed, according to the Bureau of Labor Statistics. The Economic Policy Institute reports that half of U.S. jobs pay below $34,000 a year.

Obama and Romney talk about creating new jobs, but what kind? Jobs that pay between $50,000 and $60,000 a year? By Pearce's calculations, that's how much income a family of three would need just to be self-sufficient.

To be fair, I should point out that the Census Bureau started using a "supplemental poverty measure" last year. According to Peter Edelman, Georgetown law professor and expert on poverty, the new formula counts food stamps and tax credits as income while using more realistic estimates of living expenses.

"By that measure," Edelman says, "the number of poor people was 49.1 million in 2010 as opposed to the 46.2 million counted by the traditional measure."

And yet, despite having this new, more accurate measure, the Census Bureau says it still uses pretax income ($23,050 for a family of four) as the government's "definitive statistical measure." In other words, we keep lying to ourselves.

dan.rodricks@baltsun.com

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.