Mickey Kaus has alerted readers to a change in the way the federal government figures the poverty line, and that new way so alters the formula that we will never be able to show any improvement in rates of poverty going foward. Worse, the new formula stops measuring strict want and instead measures a more vague “inequality” of income.
The Obama administration has reinvented the poverty formula and is now calling it the “supplemental” poverty line.
As Kaus explains, the old formula was based on “the level that bought a minimal market basket of food in 1963-4, adjusted for subsequent inflation and multiplied by three.” The goal was to measure what level of income could afford basic survivability in the current economy, giving a base line of income that could meet basic human needs.
But the new formula is more complicated and “deceptive” to boot.
The new “supplemental” poverty line is a complicated measure produced by formulas that are barely understood by poverty experts. It takes into account in-kind government benefits, which is fine, and regional costs-of-living. But at its core it is a deception: it measures not absolute poverty but relative poverty-i.e. inequality.
Kaus points out that in the past it was possible to see rates of poverty decrease as the nation grew, but now that won’t be possible, much to the delight of the Old Media establishment.
Under the old poverty line, “poverty” could be eliminated as society got richer-an achievable and widely shared goal. But the new poverty line will rise as society gets richer (“adjust for rising levels and standards of living”). The newly measured poor will always be with us in substantial numbers, just as there will always be a third of the American population trapped in the bottom third of the income charts. That will yield a permanent, inextinguishable stream of NYT front page “poverty” stat stories-even if “poverty” no longer means “poverty” in the sense we now understand the term.
Kaus isn’t the only one that noticed this change. Richard Bavier, a veteran economic analyst at the Brookings Institute, says the new poverty line formula is “carefully designed so that the public will think it is one thing when it really is something else.”
Granted, poverty will always be with us, but now the Obama administration and its compliant Old Media lapdogs have made sure that it can never improve, regardless of how well the country does.