US seeks new ways to count poverty | world | Hindustan Times
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US seeks new ways to count poverty

world Updated: Jan 06, 2011 02:09 IST
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The Census Bureau took a baby step toward redefining what is considered poor in America on Tuesday when it released several alternative measurements of poverty, fundamentally revising a one-size-fits-all formula developed in the 1960s by a civil servant.

Under a complex series of eight alternative measurements, the Census Bureau calculated that in 2009, the number of Americans living in poverty could have been as few as 39 million or as many as almost 53 million.

Under the official calculation, the census estimated that about 44 million were subsisting on incomes below the poverty line of about $21,750 for a family of four. The alternatives generally set the poverty threshold higher, as much as $29,600 for a couple with two children.

In September, the census estimated the nation's poverty rate in 2009 was 14.3 per cent. Under the alternatives, it could have been as low as 12.8 per cent or as high as 17.1 per cent.

For the time being, the government will continue to use the original poverty definition to determine eligibility for federal programs. The alternatives are experimental and will be revised every year, eventually winnowing them to one.

The current formula was devised by Mollie Orshansky, a civil servant in the Social Security Administration who took the cost of a "thrifty food basket" for a family of four and multiplied it by three. Her formula has been updated for inflation. It continues to harbour a number of quirks traceable to attitudes of a half-century ago, such as a $1,000 reduction in the poverty line for people older than 65, largely because Orshansky, an economist and statistician, believed older people eat less.

The alternatives reflect a growing consensus among experts in the poverty field that the old formula does not adequately measure poverty in the 21st century.

Although the poverty measurement is largely of interest to academics today, it has the potential to alter our perceptions of who is poor, how persistent a problem poverty is and whether policies should be reordered.