By Clarence Hightower, Ph.D.
The Anti-Poverty Soldier
ST. PAUL, Minn. (Jan. 28, 2016) — In 1963, just months before President Lyndon B. Johnson declared America’s “War on Poverty,” economist Mollie Orshansky began devising a formula to measure poverty in the United States. While working as a statistician with the Social Security Administration, Orshansky developed her blueprint over the better part of two years.
Known as the Orshansky Poverty Thresholds, this formula was adopted by the United States Office of Economic Opportunity in 1965 as the federal government’s official tool to measure poverty. The newly established federal poverty guidelines defined poverty primarily based on what it cost to provide an adequate and nutritional supply of food to each American household (relative to its size).
Save for a few minor changes in the late 1960s and again in the 1980s, the federal poverty guidelines that the United States’ utilizes today are essentially the same as they were 50 years ago. This is significant because the current index fails to consider a number of vital indicators that would better measure poverty, such as geographical differences, housing costs, healthcare trends, infrastructure, transportation, and utility costs.
As such, America in 2015 counts nearly 50 million (15 percent) of its 319 million citizens as poor. Based on those numbers, there are more Americans living below the poverty line today than any time in our history. Yet a multitude of analysts, scholars, and activists continue to assert that the flaws in the way the United States measures poverty woefully underestimate the true number of poor people in this country.
Consider for example that in 2015 a family of four living in the 48 contiguous states and Washington, D.C., must earn less than $24,250 each year to be counted as poor. This means that a four-person household with an annual income of $24,300 is somehow above the poverty threshold, regardless of whether they live on a farm in southeastern Kansas, Chicago’s Near West Side, the Appalachian region, or California’s Silicon Valley.
In recent years, a number of promising tools have been developed to provide a more appropriate measure of who, and how many, are truly poor in America. Among these has been the Oregon Center for Public Policy’s Basic Family Budget Calculator, the Massachusetts Institute of Technology’s Living Wage Calculator, and the National Low-Income Housing Coalition’s Out of Reach Report.
In fact, the measure developed by the Oregon Center for Public Policy in 2013 demonstrates that in Oregon’s two largest cities, Portland and Eugene, a family of three would need an annual household income that is roughly three times greater than prescribed in the federal poverty guidelines to achieve true economic security.
As the debate on how to properly measure poverty continues, two recent episodes have further advanced the argument that the current system must be significantly revised if not altogether abandoned. One of these occurrences was the naming of Princeton University economist Angus Deaton as the 2015 winner of the Nobel Memorial Prize in Economic Sciences.
An editorial in The Wall Street Journal notes that Deaton’s work on how to measure economic security is gaining traction, stating that “unemployment and poverty rates offer limited insights into society’s most vulnerable. Deaton highlights the importance of including food, housing, and other needs.”
The other important event is the development of the Human Needs Index (HNI). Established in October of 2015, the HNI was a joint creation by the Salvation Army and the IU Lilly Family School of Philanthropy at Indiana University-Purdue University, Indianapolis. The HNI utilizes seven critical variables beyond household income, including housing, healthcare, food, and energy, to determine when a family can or cannot “adequately meet life’s fundamental needs.” The tool also accounts for regional factors as well as differences in rural, urban, and suburban communities.
It is paramount that legislators, government agencies, the nonprofit sector, and other key stakeholders continue to develop and utilize tools such as this in order to better understand poverty in America and ensure that all those in need have access to critical resources and services.
Clarence Hightower is the executive director of Community Action Partnership of Ramsey & Washington Counties. Dr. Hightower holds a Ph.D. in urban higher education from Jackson State University.