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EXCERPT

March 1998, Vol. 121, No. 3

Experimental poverty measurement for the 1990s

Thesia I. Garner, Kathleen Short,Stephanie Shipp, Charles Nelson, and Geoffrey Paulin


 
The last 30 years have seen fundamental social and economic changes in the United States. Today, there are more working mothers, families are smaller, there are wider varieties of goods and services, expectations about what it takes to meet one’s needs are greater than in the past, and beliefs about what are necessities have changed. Geographic variations in housing and the increasing importance of government programs also have influenced families’ appraisals of the value of their disposable incomes.1 With these and related changes have come questions about whether the measures and data used to produce various economic statistics are still meaningful. Among the measures frequently criticized is that for poverty.
 
The most recent comprehensive examination of poverty measurement in the United States was conducted by the National Research Council of the National Academy of Sciences Panel on Poverty and Family Assistance in the early 1990s. In 1995, this Panel of scholars published its findings in a report entitled Measuring Poverty: A New Approach.2 Included in the report are recommendations for a new poverty measure, along with examples of ways in which the recommendations might be implemented. According to the Panel, any new poverty measure should better reflect social and economic changes, and should be based on a level of family economic resources considered necessary to provide a minimally adequate standard of living, defined appropriately for the Nation.
 
The Panel’s minimally adequate standard of living would include a basic needs commodity bundle (food, clothing, shelter, and utilities), plus a small additional amount to allow for other needs (such as household supplies, personal care, and nonwork-related transportation). Family economic resources would be defined as the sum of money income from all sources and near-money benefits from government transfer programs (such as food stamps and subsidized housing) that could be used to buy the commodities in the full needs bundle, less expenses that could not be used to buy these commodities.3 If a family could not meet its needs for these commodities with its available economic resources, it would be considered poor. (See the box on pp. 53–55 for a summary of the general recommendations.)

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Footnotes
1 Gordon Fisher refers to such developments as changes in social processes. He notes that with technological advances and increases in levels of living, new consumption items are introduced. With the introduction of new items and more widespread acceptance and use of these items, the belief about what are necessities changes. Changes in the way our society is organized also can contribute to changes in our expectations (for example, greater dependence on private rather than public transportation), as can changes in social policy (such as changes in the minimum quality acceptable for public housing). See Gordon Fisher, "Relative or Absolute—A New Light on the Behavior of Poverty Lines Over Time," Newsletter of the Government Statistics Section and the Social Statistics Section of the American Statistical Association, Summer 1996, pp. 10–12.

2 Connie F. Citro and Robert T. Michael, eds., Measuring Poverty: A New Approach (Washington, National Academy Press, 1995).

3 These deductions would include income and payroll taxes, child care and other work-related expenses, child support to another household, and out-of-pocket medical care costs. See Citro and Michael, Measuring Poverty, pp. 4–5.


Related BLS programs
Labor Force Statistics from the Current Population Survey
Consumer Expenditure Survey

Related Monthly Labor Review articles
The effect of working wives on the incidence of poverty. March 1998.
 
Working poor, The. September 1997
 
Work schedules of low-educated American women and welfare reform, The. April 1997.
 
What does it mean to be poor in America? May 1996.
 
Spending patterns of families receiving public assistance. April 1996.
 
Working and poor in 1990. December 1992.
 
Poverty areas and the 'underclass:' untangling the web. March 1991.

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