Tuesday, October 06, 2009

Old formula makes poverty line too low, many say

The U.S. Census Bureau recently announced that the poverty level for a family of three is $17,330, and for a family of four $21,834. But can a family of four really live on $22,000? That's the question Al Tompkins of The Poynter Institute and others are asking. The Economic Policy Institute developed the Basic Family Budget Calculator to determine exactly how much money a family needs to survive; its findings were clear: "Besides offering detailed data on how much costs vary across rural and urban areas and different geographic regions, the calculator shows that poverty thresholds are too low just about everywhere."

EPI's calculations revealed that a rural Arkansas family needs $37,388 a year and a rural Texas family needs $38,862. "These regions are comparatively inexpensive," EPI writes. "But still have costs for essentials that easily exceed incomes at the official poverty threshold." (Read more)

The National Academy of Sciences has developed an increasingly popular formula that finds 18.6 percent of Americans 65 and older are living in poverty, compared to the current measure of 9.7 percent, Hope Yen of The Associated Press reports. The original government formula doesn't account for rising cost of medical care, among other things. "It's a hidden problem," said Robin Talbert, president of the AARP Foundation. "There are still many millions of older people on the edge, who don't have what they need to get by."

"The changes have been discussed quietly for years in academic circles, and both Democrats and Republicans agree that the decades-old White House formula, which is based on a 1955 cost of an emergency food diet, is outdated," Yen writes. If the federal government adopted NAC's standards the overall poverty rate would increase from 12.5 to 15.3 percent and child poverty rates would actually decrease slightly to 17.9 percent. (Read more)

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