9/16/2019

To really determine who is poor in the US, count all anti-poverty spending

"Like any poverty measure, the OPM hinges on two basic features: The poverty line is the first. Despite significant changes in household consumption patterns, the poverty line has not been modified, except for adjustments for inflation, since the 1960s, and it remains set at approximately three times the cost of what was considered an adequate food diet fifty some years ago.

The second feature is what the official poverty measure counts as income to determine if a family is above or below the poverty line. The OPM counts the income poor and other families receive from pre-tax earnings, social security, and welfare checks, among other sources. But it fails to count the fastest growing types of federal anti-poverty benefits. These include food stamps, housing assistance, and Medicaid. It also ignores the value of the Earned Income Tax Credit (EITC) and the refundable portion of the Child Tax Credit (CTC), both designed to help low-income workers and their families escape poverty. These programs started after the official poverty measure was developed and have expanded dramatically in recent decades. In fact, they have grown far faster than the anti-poverty programs counted as income under the OPM. As the figure below shows, in just the last two decades, programs that are not counted as income under the OPM (the various programs in red) have grown 16 times faster than those that are counted as income (family assistance and Supplemental Security Income (SSI), in blue)."