I had occasion to look up the 2008 Federal Poverty Guideline data the other day, and thought it worth sharing a few observations that might give one pause when considering poverty statistics. The Guideline is one of two measuring sticks (the Census Bureau's Threshold being the other) which are used to gauge poverty. The Guideline is usually used for eligibility for programs, the Threshold for as a yardstick for judging a household's income in relation to poverty; the Census Bureau is careful to state that it is merely a statistical measure and has no relationship to income adequacy. The Thresholds are a bit more complex in structure than the HHS Guideline, but are substantially the same figures.
For 2008, a family of four is judged to be in poverty if their income is below $21,200, anywhere in the continental US. A single individual is judged to be in poverty if their income is below $10,400, and from there, $3,600 is added for each additional family member.
Where in America is an income of $21,200 an even minimally adequate income for a household of four people of any age?
The USDA (Department of Agriculture) publishes four food plans, which they regard as realistic assessments of what people need to eat and what it costs to buy the food to prepare those meals. They assume 3 meals a day, all prepared at home from ingredients bought in grocery stores. They start with the assumption of a family of 4, and then provide factors to adjust for smaller and larger families. They provide four levels of spending -- Thrifty (once known as "emergency"), Low-cost, Moderate-cost and Liberal. They provide weekly data for feeding males and females of various ages, in a family of 4, for each of the four food plans. The January, 2008 data is here. For example, they state that the cost of feeding a child 9 to 11 years old, living in a family of 4, is $32.50 per week, on the Thrifty plan; $42.10 on the low-cost; $53.90 on the moderate-cost, and $63.40 on the liberal plan. For a family of 4, including a couple 19-50 years old and children 6-8 and 9-11, the Thrifty plan allows $132 per week. That works out to $1.57 per person per meal, and $6,862 per year. The $1.57 per person per meal does not sound very realistic, particularly if both parents are employed full time or more, and commuting more than a short distance, and don't have time to cook 21 meals a week from scratch. (It also doesn't take into account the cost of transportation to buy that food, and may assume that one lives within a manageable distance of an "average-priced" grocery store.)
But putting aside the realities there, let's look at the annual figure that equates to: $6,862 per year to feed four people. That's 32.4% of the poverty guideline, and leaves $14,338 for everything else.
Housing is also a major cost. The Department of Housing and Urban Development provides a measure of local rent levels in the annual HUD Fair Market Rents. This is done at the county level for rural areas, and at the metropolitan level for urban places. Generally FMR's represent the 40th percentile of the market, in each size of unit, from studio to 4BR. Those who are below the 40th percentile are likely to live in places lacking good access to frequent public transportation, in neighborhoods that are less safe, in districts with schools that others with options would pay more to avoid; the homes themselves will have fewer amenities, like individual or shared washers or clothes dryers; dishwashers, perhaps air conditioning, etc.
Looking only at 2BR units, HUD Fair Market Rents in 2008 range from under $500 to well over $1500. Even the $1500 places need people who will teach in their schools, fight their fires, police the streets, flip the burgers, keep the hospitals and their patients clean, etc. [This seems to me an argument that education is not going to solve our wage and poverty problems, but maybe I'm missing some important aspect of the education-as-a-cure-for-poverty argument. And I keep wondering how ending or reducing illegal immigration relates to how some of vital tasks are going to get done.]
Our poverty measure is level for the continental states. It doesn't differentiate between the rural county where a (40th percentile) 2BR home can be rented for under $500 per month and an urban area where a (40th percentile) 2BR costs the tenant more than 3 times as much. (And that urban 40th percentile 2BR probably doesn't have much more in the way of landlord-provided amenities than does the rural one.)
$500 per month is $6,000 per year; $1500 per month is $18,000 per year. Keep in mind that payroll taxes are paid on that money -- and when one gets to the level of income necessary to support an urban apartment, one is far above the federal EITC level, which at lower levels may serve to pay back some of that payroll tax.
In most cities, it takes an income of 200% of poverty, or 300% of poverty, just to meet a family's most modestly defined needs -- without considering such frills as
- paying off debt,
- school loans,
- saving for the future,
- paying any tuition to get ahead,
- exchanging simple gifts with family members,
- an occasional meal that isn't 100% homecooked.
The folks who buy a small Starbucks coffee are paying more for that coffee than the USDA Thrifty food plan assumes a single adult can spend on a single meal ($2.16 for a single man 19-50; $1.94 for a woman of the same age). We talk about the Starbucks crowd a lot; we don't give much thought to the people who are struggling to make enough money to meet basic needs.
And then we turn around and treat them as if it were their fault that they lacked sufficient income. Few of us have sufficient understanding of basic economics to connect the dots between land prices, land values, economic rent, wages and poverty -- and the sort of tax reform which can make the difference between hell on earth for a large share of our compatriots and a land where all of us can prosper -- a society with no victims and no free lunches.
As I heard in the prayers this morning, we have the power to eliminate poverty. Do we have the will? Are we -- who think the system as it is works adequately, at least for us, who have learned to navigate it -- willing to give up the free lunches we think/hope/expect will be ours in order to create a society in which we condemn the poor and the young to provide us those free lunches?
Therein lies the question.
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