At our L’taken seminars, I do an activity with participants in which they take on the identity of a new person and attempt to find enough food to feed them and those for whom they are responsible for one day (they can go to the food stamp office, the grocery store, or an emergency money station). Their new “characters” each have a specific income but, after they work out their expenses, realize that for each day, they have a minimal amount left over to spend on food – somewhere between $1 and $9. When we talk about the simulation, many are surprised that a person’s income does not always correlate to the amount of cash left over after housing, medical and family expenses were deducted.
The truth is that most government programs determine eligibility based on “cash income,” a system that has been in place since 1960. The system operates on the assumption that a family will spend 1/3 of their income on food; this has been tagged to inflation, and the measure now stands at about $22,000 per year for a family of four. The problem, as the Center for American Progress points out, is that the amount a family spends on food “now amounts to around one-seventh [of total costs] as the costs of housing, childcare, and health care have all risen disproportionately.” As a result, the “poverty threshold has fallen far behind the actual cost of meeting basic needs, and while “when the measure was first instituted, a person living at the federal poverty line earned about 50 percent of the average American’s income; today that proportion has fallen to approximately 28 percent.”
In short, as Peg Chamberlain writes, our current system is “woefully inadequate in helping assess levels of poverty in America today.” The good news is that the federal government also has gotten the message, announcing earlier this month that it would begin producing a new, supplemental measure of poverty to go alongside the traditional cash-income formula. The new measure, which is set to be released in the fall of 2011, will be complicated, but will attempt to identify a particular income level that is required to accommodate basic needs such as food, housing, and clothing as the new threshold to measure who needs government assistance and who does not. As the New York Times points out, the new measure will also seek “to calculate the value of in-kind benefits, like food stamps, and whether homeowners have a mortgage.”
Of course, simply measuring poverty in a different way will do little to bring people out of poverty. However, as my L’taken participants can tell you, strictly income-based qualification levels do not reflect the true costs of living that force many families – including those with a cash income above the federal poverty line – into poverty. The better we are able to understand who needs help, the better positioned our government can be to provide services. As New York City mayor Michael Bloomberg has said, “If you can’t measure it, you can’t manage it.”