Poverty threshold: statistical measurement or analysis on where is poverty and who is poor and used only for statistical purposes
Poverty guidelines: what agencies use to determine who eligible for programs
Poverty line: where a certain household falls above or below the poverty threshold
Poverty rate: what people are poor every year – 15%
2012 poverty rate higher than 2007, has gone up since the recession but has kind of stabilized
How is poverty measured?
Official poverty rate might not reflect the reality of how many people are poor.
Absolute measure is a fixed dollar amount that they need for basic survival – what they used to measure poverty in developing countries – conceived by SS employee Molly in 1963 – developed on the idea that the household budget could be divided in three. One-third on food; one-third on shelter; and one-third on miscellaneous; before 1963, we did not measure poverty. Measuring poverty rates basically that she developed – consumer rate (adjusted only according to consumer price index). (One problem is that it does not take into account geographical location, and food costs have changed. Food budget is not the same. There are also issues with number of household people. Differences like child care costs and other expenditures and does not adjust for standard of living and does not count assistance programs as income and does not take into account family structure and does not differentiate between poverty and extreme poverty (only above and below poverty line). It only changes cost of food budget.)
Political reasons why we continue to use this flawed measure.
We still have a lot of access to stuff because we are a “consumer society” and quality of food.
Relative measure takes into account the median income in the country, certain amount less than median income – very fluid and would make a lot more sense. Back in the 1990s, Academy of Science started evaluating poverty in U.S. In 2010, charged with starting point with supplemental poverty income – only used as comparison.
Poverty is probably higher than official measure.
Poverty guideline that is used to determine eligibility – to eligible for a certain program, you can be above the guidelines – non-open-ended programs.
What are the differences between the poverty guidelines and the poverty thresholds?
Poverty thresholds are used for calculating all official poverty population statistics — for instance, figures on the number of Americans in poverty each year. They are updated each year by the Census Bureau. Poverty thresholds since 1973 (and for selected earlier years) and weighted average poverty thresholds since 1959 are available on the Census Bureau’s web site. For poverty thresholds before 1980, contact the Census Bureau at 1-800-923-8282. For an example of how the Census Bureau applies the thresholds to a family’s income to determine its poverty status, see “How the Census Bureau Measures Poverty” on the Census Bureau’s web site.
The poverty guidelines are a simplified version of the federal poverty thresholds used for administrative purposes — for instance, determining financial eligibility for certain federal programs. They are issued each year in the Federal Register by the Department of Health and Human Services (HHS).
Key differences between the poverty thresholds and the poverty guidelines are summarized in the table below. For more information, see the discussion of poverty thresholds and poverty guidelines on the Institute for Research on Poverty’s web site.
Key Differences Between Thresholds and Guidelines
Department of Health and Human Services
Statistical — calculating the number of people in poverty
Administrative — determining financial eligibility for certain programs
Characteristics by Which They Vary
Detailed (48-cell) matrix of thresholds varies by family size, number of children, and, for 1- & 2-person units, whether or not elderly. Weighted average thresholds vary by family size and, for 1- & 2-person units, whether or not elderly. There is no geographic variation; the same figures are used for all 50 states and D.C.
Guidelines vary by family size. In addition, there is one set of figures for the 48 contiguous states and D.C.; one set for Alaska; and one set for Hawaii.
Timing of Annual Update
The Census Bureau issues preliminary poverty thresholds in January, and final poverty thresholds in September of the year after the year for which poverty is measured. The poverty thresholds are adjusted to the price level of the year for which poverty is measured. For example, the poverty thresholds for calendar year 2012 were issued in 2013 (preliminary in January, final in September), were used to measure poverty for calendar year 2012, and reflect the price level of calendar year 2012.
HHS issues poverty guidelines in late January of each year. Some programs make them effective on date of publication, others at a later date. For example, the 2013 poverty guidelines were issued in January 2013, calculated from the calendar year 2011 thresholds issued in September 2012, updated to reflect the price level of calendar year 2012. Therefore, the 2013 poverty guidelines are approximately equal to the poverty thresholds for 2012 (for most family sizes).
How Updated or Calculated
The 48-cell matrix is updated each year from the 1978 threshold matrix using the CPI-U. The preliminary weighted average thresholds are updated from the previous year’s final weighted average thresholds using the CPI-U. The final weighted average thresholds are calculated from the current year’s 48-cell matrix using family weighting figures from the Current Population Survey’s Annual Social and Economic Supplement.
Guidelines are updated from the la
o “Does Money Make You Mean?”
When Paul K. Piff of the University of California at Berkeley for his experiment set up a rigged Monopoly, he discovered in the process of observing the goings-on that the “rich players” feel a sense of entitlement and superiority and do not care or pay attention to the plight of the “poor players” – basically in advantaging some players over others, he showed in his random experiment of picking who would be the “rich player” and the “poor player” that the poor almost had no chances of winning.
Anne Rueth – social worker – was more concerned about the health disparity in the poor rich – talking about how some people lose out on the “health issue” even before birth because their parents live in an overcrowded area, have medical issues themselves and subsist on poor nutrition.
Pastor Colin Dunkey likes helping people in the poor Park Avenue, but he was shown in one instance running out of food.
Tim Noah – talks a lot about the The Great Divergence Upward Mobility – not easy.
Wealth Distribution 2010 graph showed how only 400 richest American than bottom half of American household
Michael Gross: concentrated in small number of places, concentration since early 19th century, and magnet for people who live from the 1% of the 1%.
740 Park Avenue – home to billionaires than any other building in the U.S. It was built as a consortium with the people – standard where oil executives and other people lived. Now, largest group of people living in the building consists of hedge fund guys. For example, John Thain of Merrill Lynch lives there.
Stephen Schwartzman – former employee working as a doorkeeper said he was a strange guy à out of the public eye.
Jacob Hacker – we as a society have complex views about income equality. Winner-Take-All-Politics—this extraordinary accumulation is about rigging rules in your favor.
Jack Abramoff – spent four years in prison in corruption to federal charges. He said that as a lobbyist, his goal and others in his position were using power and money to get to the decision-maker of the staff and paying financial conveyances to have politicians supporting what he wanted
Money was being used to buy results.
Washington bought by corporate sector.
Schumer – record amounts of money
Carried interests – loophole, which is why
David Koch–$25,000,000,000 makes Dixie Cups, Brawny towel, etc.