NCPA - National Center for Policy Analysis

Creating Poverty With A Statistical Wand?

October 19, 1999

The Census Bureau intends to recalculate the official poverty level, according to some press reports. The bureau denies that, even though it has been studying different ways to define who is poor.

According to the reports:

  • The bureau's new formula would hike the poverty line to $19,500 per year for a family of four -- from $16,600 currently.
  • That would mean that 46 million Americans would be considered poor.
  • The proportion below the poverty line would suddenly jump from less than 13 percent of Americans to 17 percent of the entire population.
  • The proposed formula would include such noncash items as food stamps, housing subsidies and Medicaid as income in setting the poverty line.

But critics point out that a true definition of poverty should take into account asset wealth. That would reflect the reality that four in 10 "poor" households own their own home and nearly 70 percent own a car or truck. More than one-quarter have more than one car or truck.

Two-thirds have air conditioning, 97 percent get cable television and 73 percent own a VCR. Moreover, almost one-third have an answering machine and 28 percent have a dishwasher.

Source: Editorial, "Redefining Who's Poor," Investor's Business Daily, October 19, 1999.

 

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