New Poverty Measure Doesn’t Add Up

Rachel Sheffield / June 08, 2010

According to the columnist Robert J. Samuelson, the new Obama poverty measure “fails.” It flunks the test of “political neutrality,” and is based on “misleading statistics that not one American in 100,000 could possibly understand.”

That’s because the new calculation would measure poverty on a sliding scale. Thus, if the average income of families in the United States’ increases so too does the poverty threshold. Talk about keeping up with the Jones. This new measure provides the perfect climate for left-leaning politicians to promote equalization of wealth through redistribution. This new measure would bump poverty up 30 percent: more poverty equals more political fodder to argue for increased welfare.

Unfortunately, the method currently used to calculate the poverty rate is already skewed, creating a “crisis” of poverty in the United States. This is because only a family’s pre-tax income is included in total income when determining their poverty level. Thus, despite the fact that the average poor household receives $28,000 dollars in welfare benefits annually, these benefits are not included in their income. Not surprisingly then, even though the United States has increased welfare spending by 13 fold (adjusting for inflation) since the war on poverty began in 1965, the poverty rate has stayed much the same. (more…)