Re: AFP: “In US, record numbers are plunged into poverty: report”
On Feb 25, 2007, at 9:53 AM, B. wrote:
“These and other factors have helped push 43 percent of the
nation’s 37 million poor people into deep poverty — the highest rate since at least 1975. The share of poor Americans in deep poverty has climbed slowly but steadily over the last three decades,” the report said.
This is slightly deceptive. The stats on extreme poverty from the
Census Bureau only begin in 1975. And yes, in 2005, 42.9% of the
official poverty population had incomes under 50% of the poverty
line, the highest on record. But the share of the total population in
extreme poverty (i.e., under 50% of poverty) was 5.4%, which isn’t
the highest on record. It was 5.9% in 1983, and 6.2% in 1993. The
overall poverty rate was 15.2% in 1983, and 14.8% in 1993 - compared
with 12.6% last year. So the poverty rate isn’t as high as it’s been
in the past.
But…the U.S. poverty line is an absolute concept - it was set in
the early 1960s and has been adjusted only for inflation ever since.
So in principle, a poverty-line income today represents the same
purchasing power as it did 40 years ago, with no consideration of
rising average incomes or changing “needs.” Most poverty researchers
tend to define the poverty line as 50% of the median household’s
(with appropriate adjustments for household size, which sounds easier
than it is). A guy at the Census Bureau, Jack O’Neil, used to do
unpublished estimates of the relative poverty rate for the U.S. every
year, but he retired. In general, it was about 1.5-1.8 times the
official rate, which would put it between 20% and 25% now.
Doug