The way the US measures poverty is outdated, misleading, and could leave millions of Americans without the help they need to make it through the pandemic

Business Insider
By Shailly Gupta Barnes and Liz Theoharis
July 18, 2020

recent article in The New York Times offered a surprising assessment of poverty during the pandemic. It outlined how massive federal aid over the last three months may have capped a rise in poverty or actually lowered it.

For those who have stood for hours in food lines or for anyone who has made upwards of 200 calls before reaching an unemployment office, this news might not only seem inaccurate, but insulting. 

The Times article cited two studies on the impact of government spending on poverty since the rise of the COVID-19 pandemic.

One study by researchers at Columbia University’s Center on Poverty and Social Policy forecast that the official poverty rate will rise only slightly this year from 12.5% to 12.7%, despite the pandemic’s economic devastation. The report raises important questions about the scope of relief in the CARES Act — the $2 trillion aid package passed by Congress — but suggests that this nominal increase in poverty would have been worse if social welfare spending had not been expanded and cautions against cutting aid too soon.

The second study, by researchers at the University of Chicago, finds that poverty rates have actually fallen during the pandemic. It argues that the government response during the crisis has been robust enough to lift people out of poverty and questions the value in extending aid much longer.

These two studies arrived at different conclusions using different measures of poverty, reminding us that methodology is not a rarefied or impartial practice. There are political implications for how we define and measure our well-being. The reality is that our definition of poverty not only leaves millions of people out, it has laid the foundation for decades of anti-poor policies.

The way we measure poverty is outdated

The same weekend The New York Times article was published, millions of people tuned into a program organized by the Poor People’s Campaign and heard untold stories about the depth and breadth of poverty in the richest nation in the history of the world. The reaction from people across the country was disbelief and outrage that things could be so bad. 

Today, the federal poverty line is based on income and food expense data from 1955 — yes, 65 year old data. Since then, our economy has undergone sweeping transformations, from deindustrialization and automation to financialization, as have the demographics of the country. And yet, somehow we still depend on a formulation of poverty from over half a century ago.

Right now, the threshold for a family of four is $26,200. Under the government’s fullest measure, the Supplemental Poverty Measure (SPM) used in the Columbia report, the threshold for a family of four is slightly higher, approximately $28,000. This is still less than half of what it costs for most families to meet their housing, childcare, food, healthcare, and transportation needs. 

In 2018, the Poor People’s Campaign and the Institute for Policy Studies released the “Souls of Poor Folk: Auditing America” report that offered a more realistic assessment of poverty. Using the SPM as a baseline, the report looked at the number of people living below the poverty threshold as well as everyone living just above it, which included annual incomes of up to approximately $48,000 for a family of four. 

Using this methodology, the report concluded that there are 140 million people who are poor or struggling daily to make ends meet. In other words, along with the 40 million living below the poverty line (who are part of the 12.5% cited in the Columbia study) there are another 95 million to 100 million currently living right above it. 

This picture of enormous precariousness complicates the meager definition of poverty that remains our national benchmark and informs all manner of federal policy. Within the expanded definition used by the Poor People’s Campaign are millions of people who live just a $400 emergency away from poverty.

Testing positive for COVID-19, losing a job — as 45 million people have since the start of the pandemic, or missing one month of rent or water bills could send these millions of Americans into poverty. 

Indeed, our public policy has long been guided by the belief that poverty is an aberration in an otherwise healthy society, but the truth is that it has increasingly become an endemic and permanent fixture of American life. Unless that truth is seen, it can never be adequately addressed. 

For too long, both parties have pursued a politics of tolerating or alleviating poverty, but it is actually possible to end poverty and the solutions are not unknown to us. To do so, we will need to cut military spending, insist on a fair taxation system, and invest in programs of social uplift.

The Poor People’s Campaign’s Moral Justice Jubilee Policy Platform makes it clear that to truly overcome poverty, the idea of poverty must first be redefined and understood in relationship to our ability to meet basic needs (e.g., housing, utilities, food, transportation, childcare, health care, education), account for debt and tax burdens, and be pegged to the median cost of living today.

The Campaign is also part of collective efforts, along with the Kairos Center, Center on Poverty and Social Policy, Institute for Policy Studies, the Center on Economic Policy Research, National Women’s Law Center, Coalition on Human Needs and others to prevent the Trump Administration from lowering the official poverty line even further. 

This work couldn’t be more urgent. When the provisions of the CARES Act begin to expire this summer, millions will be left with few protections in this spiraling economy. Experts are already predicting that some jobs will never come back, homelessness and hunger will continue to swell, and waves of evictions will arrive once moratoriums end and backlogs on rent are due. 

A mere change in the definition or measure of poverty will not summon the political will to address this suffering in all its fullness, but it is an essential place to start.

A year before his death, as he stared down the growing plague of poverty, Dr. Martin Luther King Jr. wrote: “the prescription for the cure rests with an adequate diagnosis of the disease.”

A prescription for poverty today requires more than accurate accounting. But we cannot even begin to articulate the cure until we first acknowledge the depth of the crisis at hand. 

The Rev. Dr. Liz Theoharis is co-chair of the Poor People’s Campaign and director for the Kairos Center for Religion, Rights and Social Justice. Shailly Gupta Barnes is policy director for the Poor People’s Campaign and Kairos Center.