NCPA - National Center for Policy Analysis

Measuring Poverty

September 16, 2002

Federal statistics measuring the poverty line in the U.S. were first developed in the early 1960s and some experts claim they are seriously out of date. They are founded on the premise, for example, that the cost of food makes up one-third of the average family budget.

  • But for most families today, food constitutes less than one-fifth of budgets -- while higher costs of transportation, housing, health care and child care impose new burdens.
  • The old model was based on a two-parent family with one stay-at-home parent -- while today a single working parent is characteristic of many families, especially poorer ones.
  • In nearly two-thirds of two-parent families, both parents work -- which means important new costs for child care and transportation.
  • Also, the federal poverty-level measurement assumes family costs are the same throughout the lower 48 states -- the same in New York City as in Kansas, although this is clearly untrue.

Therefore, the current poverty figure of $18,100 for a family of four is clearly an underestimate.

Actually, several different agencies measure poverty. Poverty "thresholds" are determined by the Census Bureau. Poverty "guidelines" are issued by the Department of Health and Human Services to determine eligibility for government services. The guidelines are more up-to-date, experts say.

Source: Deepak Bhargava and Joan Kuriansky, "Really Out of Line," Washington Post, September 15, 2002.


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