The formula used to determine whether someone is living in poverty was developed By the Johnson administration in the early 1960s. Given it’s age, the formula is deeply flawed.
It was determined that the average American spent one-third of their income on food. The money needed to eat a low-cost diet (including: beans; potatoes; nuts; cereal; and others) was multiplied by three to determine the poverty line. Since then, the poverty line has only been updated for inflation.
The Census Bureau releases a report called Income and Poverty in the United States. The last year for which data are available is 2015.
- 13.5 percent of Americans were living in poverty
- 143.1 million Americans were living in poverty
- 19.7 percent of America’s children were living in poverty
Many people living in poverty are excluded from the ranks of the impoverished. Today, food comprises roughly a sixth of the normal American budget, not one-third. Child care is a much bigger deal today than it was fifty years earlier. Everyone knows how much more people are paying for health care than we were years ago.
In 2011, the Census Bureau began releasing the Supplemental Poverty Measure (SPM). The SPM considers SNAP benefits, tax credits, housing subsidies, and many other factors not considered when the official poverty rate is calculated. Also, the SPM deducts things like taxes and out-of-pocket medical expenses that reduce one’s ability to spend. Unlike the official poverty rate, the SPM recognizes that the cost of many goods and services is dependent on where you live.
The last year for which SPM data are available is 2015.
- 14.3 percent of Americans were living in poverty
- 45.7 million Americans were living in poverty
- Social Security reduced the SPM by 8.3 percent
- SNAP lowered the poverty rate by 1.4 percent