Federal Poverty Measurement Is Misleading

July 28, 2014

The poverty rate today sits at 15 percent, the same rate that existed in the 1960s when the government's War on Poverty began, explains Robert Rector of the Heritage Foundation.

But why has poverty remained at the same level when federal and state welfare spending has dramatically increased and is now 16 times higher today than it was in the 1960s?

Rector explains that the Census Bureau's poverty measures are incomplete. Poverty is a measurement of income below a specific threshold, yet income includes only wages and salaries -- not welfare benefits. Thus, spending on the federal government's 80 welfare programs (which provide cash, food, housing and medical care) are not included in a person's income.

  • The government spent $916 billion on means-tested welfare programs in 2012, aiding 100 million Americans and costing an average $9,000 per recipient.
  • Yet, only 3 percent of that $916 billion was considered "income" for poverty measurement purposes.

Without considering these government benefits, poverty cannot be an accurate indication of a person's living conditions, says Rector.

Source: Robert Rector, "Self-Sufficiency Rate Stagnates, Welfare State Grows," 2014 Index of Culture and Opportunity, Heritage Foundation, 2014.

 

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