Monday, May 6, 2013

Molly Orshansky, the Mother of ALL Poverty

Molly Orshansky
While many policy makers and various agencies are interested in our official poverty figures, the concept of "poverty" is not necessarily one that truly measures those in need. Understanding how the concept of poverty came to be in this country perhaps will help us to understand it's shortcomings as well.

Given the task of establishing a official "poverty line",  Mollie Orshansky, a civil servant who worked for the Social Security Administration and the daughter of poor Ukrainian immigrants, set about on the task of measuring poverty. She first totaled up the cost of the cheapest three-meals-a-day plan that the federal government considered nutritionally adequate in 1963. This became her basic food budget. Then, based on a calculation by the Eisenhower administration a decade earlier that the typical family spent a third of its money on food, Orshansky simply multiplied that food budget total by three. It was that simple. The poverty line was thus born.

There are considerable issues surrounding the concept of poverty and how we treat it. Consider the following:

  • The federal poverty line — $11,945 in cash income for a single adult, $23,283 for a couple with two kids — is the same whether you are poor in New York, the most expensive city in the United States, or poor in a small town in Nebraska.
  • It is the same whether you take transit to work or are hostage to the whims of gas prices. 
  • It is the same whether Medicaid helps you with medical expenses or you pay out of pocket. 
  • It is the same whether you receive food stamps or pay for child care.
  • It is the same regardless of how poor you are. For the purposes of some federal benefits, someone making a dollar below the poverty line is treated the same is someone making virtually nothing.
Here is a pretty good article from NBC News that discusses how the current poverty measure may in fact be missing millions of poor people. The primary academic article that has created a lot of  discussion about how we measure poverty was written by Bruce D. Meyer and James X. Sullivan and is entitled Identifying the Disadvantaged: Official Poverty, Consumption Poverty, and the New Supplemental Poverty Measure .

The current Poverty Thresholds from the Census Bureau are found in the table below.

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