The Official Poverty LineThe poverty line is set by the national government to define who is living in poverty. The official number is adjusted annually. It is however a deeply flawed measurement. It assumes for example that housing costs are approximately fourteen per cent of a typical budget. The reality, however, is that housing makes up 25-33 per cent of a typical family budget, reaching over 50 per cent in most major metropolitan areas. Government figures also over estimate the percentage for food costs and do not adequately estimate the percentages for childcare, health insurance or transportation. The practice of overestimating the portion of a family budget of things that are relatively inexpensive like food and underestimating the portion of things that are expensive like housing, child care, health care and transportation results in an official poverty line that simply does not reflect the real costs affecting families. For 2001 the official poverty line was established at:
These numbers put 32.9 million Americans living in poverty. A report by the Economic Policy Institute [Hardships in America] looked at a variety of family budgets, taking into account the real costs facing families. From these figures they derived a series of community minimum family budgets. Using numbers for 1999 they found that a family of three required a minimum budget of $23,000 in the least expensive communities ranging up to a high of $46,000 in more expensive communities. That is 162%-200% of the current so called poverty line. Similar discrepancies can be found in every category of family need. |