There is broad consensus among economists of many ideological schools that the way the U.S. measures poverty is broken.
The official poverty thresholds are based off of what Americans spent on food in 1963 – according to the Census Bureau, a household making less than three times what the "minimum food diet" in 1963 cost is below the poverty threshold.
But the way Americans spend has changed markedly since then. People spent around one-quarter of their budgets on food in the 1960s. By 2003 it was closer to 13 percent, according to the Labor Department. The Gates Foundation calculated in 2012 that Americans now spend only 6 percent of their money on food. Spending on child care and health care, meanwhile, have grown.
In addition, the official poverty rate doesn't take into account some safety net programs designed to help the poorest Americans. Cash transfers like Social Security are included when determining poverty, but non-cash programs like Medicaid and the Supplemental Nutrition Assistance Program (commonly known as food stamps) are not included. Taxes are also not taken into account, says Tanner.
"Someone whose income is above the poverty line but their take-home pay is below the poverty line because of their tax liability is not poor, by our definition," he says. Likewise, the Earned Income Tax Credit is also not taken into account in the official estimate.
In addition, the federal poverty line applies across a nation in which families have widely varying costs of living; a family earning $20,000 in rural Kansas will likely find it easier to make ends meet than a family in New York City.
Taken together, all of those factors could affect the rate substantially.
With this in mind, the Census Bureau in 2011 started publishing a "supplemental poverty measure" that takes into account all of these factors, among others. The new rate doesn't garner the kind of headlines that the official rate does, but it does tell a different story.
In a December paper, scholars found that by this measure,
poverty has improved drastically since the 1960s
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