The RISING TIDE OF POVERTY IN AMERICA: ITS TIME TO ADJUST THE POVERTY LINE

 Calculating who is poor is a tricky and complicated affair, despite the good intentions among policymakers to want to improve the well-being of deprived people. The official government data published by the United States Census Bureau shows that, “In 2012, the official poverty rate was 15.0 percent, or just over 46.5 million people. The poverty rate is the share of people below the official poverty line. The poverty line was $22,314 for a family of four, $22,113 for a family of four with two children, and $11,344 for a single individual under age 65” (2012: 14).  However, there is a lot of controversy about the accuracy of these numbers, as they are based on an outdated poverty measure that doesn’t include alternative data. Policy efforts to reduce economic poverty may overlook important aspects of what is means to be poor. As Robert Havemen proclaims “these numbers ignore many non-economic considerations that may affect individual well-being, such as living in unsafe surroundings, being socially isolated, or experiencing adverse health or living arrangements not remediable by spending money (2009: 81).

            The current official poverty measure was developed in the early 1960s by Mollie Orshansky, and only a few minor changes have been implemented since it was first adopted in 1965 (us census). In the early 1960’s when she developed her poverty plan, President Johnson had declared a War on Poverty, and the nation needed a statistical representation of the poor. Her economy food plan was a bare minimum food plan designed for temporary use during economically challenging times. It was developed by taking the least expensive food plan developed by the Department of Agriculture and multiplying it by 3.

 According to Kathleen Short of the US Census Bureau “At the time it was developed, the official poverty thresholds represented the cost of a minimum diet multiplied by three (to allow for expenditures on other goods and services). Family resources were defined for this measure as before-tax money income.”

The Income based poverty line is an absolute measure that is adjusted each year only for changes in prices, not for changes in the standard of living.  The benefits to defining poverty in this way is that it keeps the poverty line fixed over a long period of time, which inevitably effects social policy and federal tax policy.  It also keeps the numbers relatively low, which looks good for the politicians in office. However, the absolute income poverty measure excludes a large number of people from receiving social services that they need, particularly women, minorities and children.  In keeping this outdated poverty line, the wealthy are the one’s who gain because they don’t have to pay higher taxes for social services and the poor people loose necessary services they need as a result of structural oppression.

Interestingly enough, the relatively low tax rate of the United States largely accounts for the nation’s skewed income distribution.   And despite the mammoth size of the federal budget of the United States, it is predicated on a tax base that is minimal compared to those of other industrialized nations.  “A tenant of the welfare state has been the progressive taxation of income and its redistribution to the poor through social programs; thus, the question of income distribution has become integral to the discussion of tax policy” (Karger and Stoesz, 2010: 244).  Unfortunately, research has revealed that tax policy has always contained provisions that benefit special interests. “Bending the tax code in response to lobbying is a long-standing practice in the United States, though today it is often associated with corporate influence or corporate welfare”(Karger and Stoesz, 2010: 243).  The Neo Conservatives have made it very clear that they want to completely do away with any kind of social welfare.  And keeping the poverty line lower than it should be keeps the tax rates low in the United States.  

Some attempts have been made to improve the nation’s official poverty measure.  According to Robert Havemen “In 1995, the National Research Council of the National Academy of Sciences reported the results of a comprehensive study of the strengths and weaknesses of the official measure, and proposed a major revision designed to correct many of the criticisms that have been levied against it” (2009:82). Since that report, the Census Bureau has developed a variety of improved poverty measures reflecting the recommendations of the 1995 report.  In November 2011 and November 2012, the Census Bureau released the first sets of estimates for the Supplemental Poverty Measure. However, none of these alternatives has been adopted to replace the existing official poverty measure (Census Bureau, 2012).

I would personally modify the absolute income poverty line by using a relative measure of poverty, which increases along with the general standard of living. I would also inculcate a multidimensional approach to poverty that includes hardships that people experience in many dimensions—education, housing, food, social contacts, security, and environmental amenities.  Aside from just measuring income, another measure of affluence that I would include is assets, insofar as they are an indication of real wealth.  Consisting of savings, real estate, stocks and bonds, and related property, assets not only can be liquidated during periods of adversity, thus offering the owner a buffer against poverty. According to Karger and Stoesz “The distribution of assets is even more skewed than income distribution, with the highest quintile owning more than 80 percent. By contrast, the wealth of the lowest quintile is negative, indicative of debt” (2010: 245).

In alignment with the 1995 study by the National Academy of Sciences, I would include all the items the reform proposed, which are so clearly delineated by Robert Haveman’s article “What Does it mean to be poor in a rich society?”:

The reform proposal would involve a new threshold based on budget studies of food, clothing, shelter, and amounts that would allow for other needs to be met, such as household supplies, personal care, and non-work-related transportation.  It would also reflect geographical differences in housing costs.  The income measure would also be reworked to include the value of near-money benefits that are available to buy goods and services (for example, food stamps), and would subtract from income required expenses that cannot be used to buy goods and services (for example, income and payroll taxes, child care and other work-related expenses, child support payments to another household, and out-of-pocket medical care costs, including health insurance premiums) (2009:82).

With the implementation of the new poverty threshold, the national statistics of poverty would go up and more people would qualify for social services. However, the corruption in tax policy favoring special interest groups or corporate welfare has to change.  People are so disillusioned by the corruption of democracy and for good reason.  How are we going to incorporate social change when corporate interests rule the roost?   Furthermore, people are highly disillusioned by the way taxes are used, such as funding wars (supposedly fifty cents out of every dollar goes to military costs. If that much went into social welfare we wouldn't be having the problems that we do).

Year after year, the funding for social services dwindles.  This is perhaps the most inhumane thing we could do to the very people that are the backbone of the capitalistic system.  The system is set up for people to be poor, yet the conservative power elite wants to cut the social services for these people—this is absolutely insane! An assortment of research reveals that although there have been some governmental efforts made to reduce poverty; they are superficial efforts that don’t target the root of the problem, which is unregulated capitalism and corporate greed.  In addition, there are a number of social trends that have changed the landscape of the U.S economy, such as globalization, the middle class slide, increasing populations and the diminishing of natural resources. All of these long-term trends drastically affect the U.S. economy and the global economy as well. 

More importantly, the new poverty threshold would assist more women, minorities and children who represent the majority of the poor. The "feminization of poverty" is currently a phenomenon of great concern to social scientists and social workers.  In the United States, the fastest growing type of family structure is that of female-headed households and, because of the high rate of poverty among these households, their increase is mirrored in the growing number of women and children who are poor; almost half of all the poor in the U.S. today live in families headed by women.  Women have higher poverty rates than do men for two reasons.  First, their economic resources are often less than those of men.  Second, they are more likely to be single parents during their working lives and to be unmarried and living alone in their later years. Minority women are highly represented among the poor because of their minority status and a higher risk of single parenthood (Devine, Plunkett, and Wright, 1992). Furthermore, the poverty of women is reflected in the poverty of children.  “There are almost 13 million poor children in the U.S.: 52 percent of them live in families headed by women and the poverty rate for white, black, and Spanish-origin children living in female-headed households is 46 percent, 66 percent, and 71 percent respectively” (Rodger, 1986: 32). 

With the growing number of poor people and dwindling of social welfare, we are headed for a major social crisis, and that doesn’t include the environmental crisis looming over our heads as a result of global capitalism. Chris Farrell wrote an excellent article titled “War on Poverty: From the Great Society to the Great Recession” (American Radio Works, 2014). He discusses some of these social trends and social policies that have contributed to the rising tide of poor people, such as global competition, the decline of private sector unions, rapid technological change and the deregulation of finance, the working poor, and low minimum wages for less educated, low- skilled workers.  His article is realistic and bleak, but it is right on target.  He ends with a quote that describes our current economic, social and environmental crisis in a nut shell:

There are public policies that would improve the job prospects for poor people. But there’s little appetite to initiate or expand anti-poverty programs and probably won’t be anytime soon.  American politics is likely to be defined in the new term by rising alarm over the increasing federal deficit and mammoth government debt. Meanwhile, state and local governments are slashing their support for the poor.  If the government can’t help, the economy will end up doing the heavy lifting by default. But so far the economy is generating little job and income growth, and even when it does come back, low-skilled workers are likely to be left behind. The risk is that the tragic combination of joblessness and poverty will lead to diminished dream and social isolation which in turn, will feed a cycle of unemployment and destructive behavior.  It’s morally and economically wrong.

The war on poverty will never be a war if people are fed a bunch of faulty statistics, which cause them to believe that poverty isn’t a macro, social epidemic.   It is clear that band-aid solutions simply aren’t working anymore, particularly in a time of global crisis. The costs of social welfare are far less than the price paid for globalization in the name of corporate greed.  Unfortunately, the karmic fall out as a result of “profits over people” is causing a massive global dark night of the soul that will inevitably cause even more suffering. The wisdom that will emerge from this death is more equality, cooperation, compassion and tolerance of diversity. 

We need a massive radical humanitarian movement—a new structural social work that transforms society from the inside out.  It is not going to come from any politicians. On the contrary, it will come from the people waking up to the lies that they have been fed by policy makers and greedy capitalists. According to one of my social work heroes, Bob Mullaly, social work ideology has much more in common with the socialist paradigms than it does with the capitalist paradigms (2007). Mullaly writes “If social workers truly believe in the values and ideas they espouse, then they cannot subscribe to and try to maintain a social order that contradicts and violates these same values and ideals (2007: 206).  The time is now for social workers to unite for change.  We simply can’t sit on our laurels anymore; we must do everything that we can to speak out for social change. 

References:

Carmen DeNavas-Walt, Bernadette D. Proctor, Jessica C. Smith. (2013). Income, Poverty and Health Insurance in the United States. United States Census Bureau, Department of Commerce.

Devine, J.A., Plunkett, M., & Wright, J.D. (1992). The Chronocity of Poverty: Evidence from the PSID, 1966-1987. Social Forces, 70, 787-812.

Farrell, Chris (2014). "War on Poverty: From the Great Society to the Great Recession." American Radio Works, Public Radio: http://americanradioworks.publicradio.org/feaatures/poverty/rising_tide.html

Haveman, Robert. (2009). "What Does it Mean to be Poor in a Rich Society?" Focus, Vol.26, No.2, Fall.

Karger, Howard, Stoesz, David. (2010). American Social Welfare Policy: A Pluralist Approach. Allyn and Bacon, Boston, MA.

Mishel Lawrence, Bivens Josh, Gould Elise, Shierholz Heidi. (2012). The State Of Working America, 12th Edition. Cornell University Press, New York.

Mullaly, Bob. (2007). The New Structural Social Work.  Oxford University Press, Ontario,    Canada.

Short, Kathleen. (2011). The Supplemental Poverty Measure: Examining the Incidence and Depth of Poverty in the U.S. Taking Account of Taxes and Transfers in 2011. The United States Census Bureau, Housing and Household Economic Statistics Division, Washington, D.C.

 

Rodgers Jr., Harrell R. (1986). Poor Women, Poor Families.  New York: M.E. Sharp.

 

 

 

 

 

 

 

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