KIDDING OURSELVES ABOUT POVERTY

CHRISTOPHER MORAFF, IN THESE TIMES - The current method for measuring
poverty in the United States was developed in 1963 by a young
statistician for the Social Security Administration named Mollie
Orshansky. Using data from a 1955 Department of Agriculture survey,
Orshansky developed a set of thresholds that set a poverty line at three
times the annual cost of feeding a family of three or more under
Agriculture's "low-cost budget." She developed the thresholds purely for
her own research and said at the time that her data's limitations would
yield a "conservative underestimate" of poverty.

At that, Orshansky's work might well have passed into history. But on
January 8, 1964, President Lyndon Johnson uttered the famous words:
"This administration today, here and now, declares unconditional war on
poverty in America." It was a war Johnson intended to win, but missing
was an official yardstick for gauging the problem and its ultimate
resolve. . .

Forty years later, with the War on Poverty no closer to being won, the
Census still relies on the Orshansky Thresholds to calculate each year
how many Americans live in poverty. That number then determines the
nature and distribution of an array of federal policies and programs
aimed at addressing the issue.

As critics have pointed out for decades, limitations of the Orshansky
formula are manifold. For one, food doesn't account for one-third of a
family's budget today, making it an unrealistic cost-of-living measure.
The model also fails to take into account housing, transportation or
health care-which together can amount to more than triple the average
cost of food. Add in regional variations, childcare costs and the growth
of single-parent families, and it's fair to say that the Census Bureau
is systematically undercounting the number of poor Americans.

Census data released this past August suggests that the number of
Americans in poverty grew slightly in 2004 (the most recent year for
which data is available) to 12.7 percent from the 12.5 percent recorded
the previous year, representing about 37 million Americans. Since 2000,
the number of people living in official poverty has increased by 5.4
million. But according to experts, that number vastly underestimates the
real total. Duke University sociology professor David Brady puts it this
way: "Each August we Americans tell ourselves a lie. The entire episode
is profoundly dishonest."

Brady says that based on his calculations the real number is closer to
18 percent-or 48 million Americans currently unable to afford the most
basic necessities. Less conservative estimates have put the numbers of
poor at 25 percent, or more than 70 million Americans.

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