Thursday, August 29, 2013

The poverty line does not matter

We keep hearing things like this:
There's broad agreement that the way the U.S. measures poverty has some fundamental flaws — a topic that's likely to come up next month, when the new poverty numbers are released. Here are three key problems, as explained to me by Christopher Wimer, a researcher at Columbia. 
1. It doesn't account for geographic differences. The poverty line is the same, no matter where you live — whether it's in New York City or rural South Dakota. 
2. It's based on a 50-year-old formula that assumes Americans spend about a third of their income on food. But, after adjusting for inflation, the price of food has fallen significantly in the past 50 years. Today, people spend only about a sixth of their income on food. But they spend a bigger chunk of their income on other items, like child care and medical expenses. 
3. It doesn't consider the value of of government benefits, such as food stamps and tax credits.
 On the contrary, the problem is absolutely not the line used to arbitrarily define poverty. The real problem is that the distribution is wrong. There are too many people suffering at the bottom of the income ladder. Fighting about where to put a line is stupid. The real questions are: why there are so many people down there at the bottom and who is doing anything to help? Debating the poverty line ignores poverty as a problem. That ain't gonna fly with the Lord.

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