Is America Poverty Free?
Be John Berry, Chief Executive Officer, Society of St. Vincent de Paul Georgia
Poverty in America has been eliminated. At least so claims Phil Gramm in a recent WSJ op-ed. That is news to me and the 5,000 St Vincent de Paul volunteers who donate their time to help people in need. I wish before he wrote that op-ed he could have spent some time in the field with our volunteer caseworkers who work daily with people struggling to pay rent, medical, and utility bills. They see empty refrigerators, dark apartments, and people stressed to their limits worrying about their future. I would love to have introduced him to Leticia, who recently moved from a shelter with her 3 small children and works as a school cafeteria employee for $10.87 an hour. Or he could have listened to the stories of the 126,000 other people St Vincent de Paul has assisted this year alone. They would tell Mr. Gramm that while progress has been made, there is still much work to be done to eliminate poverty and unlock the great human potential of people stuck in it.
Gramm claims that the way we measure poverty is flawed. And he is right – it is indeed flawed. To determine the number of US households in poverty, the U.S. Census Bureau uses the Official Poverty Measure which compares a household’s income to a threshold. Those households with incomes below the threshold are poor. Gramm argues that under the official definition, government transfers (like Medicaid, Food Stamps, Housing Assistance, WIC, School Lunches, or after-tax benefits like the earned income tax credit, and child tax credit) are excluded from income, and that if we included them, there would be virtually no poverty in the U.S. – by his definition.
What Gramm fails to tell us is that the way we set the thresholds is flawed as well. The poverty thresholds were established in 1965 and based on three times the average family food budget and have been adjusted annually for inflation. We know that the thresholds bear little relationship to real household budgets today that include rising rents, health care costs, and work transportation. When the poverty thresholds were established, they represented nearly 50% of median household income. Today the thresholds represent only approximately 28% of median income. And although by all accounts the official thresholds are arbitrarily low, the methodology suggested by Mr. Gramm uses thresholds that are about 25% lower than today’s official threshold for a family of four.
Poverty defies a simple economic measure. Poverty exists when people lack the means to satisfy their basic needs, which include activities which are an accepted part of daily life in a society. Those activities include:
- Adequate education or job skills
- Childcare expenses
- Crime-free neighborhoods
- Political influence / voting
- Opportunity for employment
- Access to dental care
- Access to basic health care
Mr. Gramm and those who agree with him have created a new measurement, widely rejected for being flawed, that reinforces a narrative that government programs make people lazy and destroy their moral character at the same time he claims that these government programs have been so successful that they have eliminated poverty. While the irony of this conclusion is obvious, it is part of a disturbing practice by many of targeting the poor as flawed individuals-a premise we outright reject at St Vincent de Paul. No great country can balance their budget on the backs of the poor. Their backs already carry too heavy a load.
Mr. Gramm does have a point: the poverty rate (however you measure it) is falling. Researchers at Columbia University have concluded that is has dropped 40% from 1967 to the present as a result of just those government programs that some want to eliminate or drastically cut back. That would increase the number of people in poverty. You don’t have to be an economist to understand that.