FEED DAILY
DOUG HENWOOD 09.19.00
IN A COUPLE of weeks, the Census Bureau will release its annual income and poverty figures. They're likely to show a decent rise in average incomes and a respectable decline in the poverty rate, from last year's 12.7% to close to 12.0%. But a recent study of life at the economic margins in New York City showed -- and hardly for the first time -- that these numbers are flatteringly low. Last week, the Women's Center for Education and Career Advancement, Wider Opportunities for Women (WOW), and the United Way of New York City published a report on how much money it takes to be even minimally self-sufficient in New York. While the government would have us believe that a single-parent family of two that earns over $14,150 is not poor, the new report -- which scrutinized just how much food, housing, transportation, health insurance, child-care, and other basics cost in our largest city -- says it would take about three times that much to squeak by. And since the city's official poverty rate hovers around 25%, it's not outlandish to estimate that over half of New Yorkers actually live in poverty.
It's true that New York is a big, old city, and big, old cities are famously crowded with poor people -- and famously expensive, besides. Broader national efforts to gauge standards of living estimate that real poverty rates are anywhere from a quarter to nearly twice as high as the official numbers. Many academics simply define a poverty income as one that's less than half the national average -- a measure that comports fairly well with polls that ask people what they think what should be considered a minimal standard of living. By that criterion, 22% of Americans were poor in 1998, a rather large number in a country that likes to think of itself as universally middle class. Moreover, by focusing on our most expensive city, the new study highlights the simple fact that living costs vary from region to region, making a single national poverty line inadequate, no matter where it's set.
How did the poverty line come to be so out of touch with the real cost of living? One answer is that the figure was haphazardly defined to begin with. During LBJ's War on Poverty, the government was casting about for some way to define the enemy with the same precision the Pentagon was applying to the body-count game in Vietnam. It stumbled on the work of Mollie Orshansky, an economist with the Social Security Administration, who'd been investigating how much it would take families of varying sizes to scrape by. Knowing that the average family spent a third of its income on food in the 1950s, she took the Department of Agriculture's "economy" food budget -- intended by its designers not as regular fare, but emergency rations for people fallen on hard times -- and multiplied it by three. Voilà, a budget for a minimal lifestyle. Though Orshansky never intended it as such, the Johnson administration adopted this as the official poverty line, and it's been merely adjusted for inflation ever since. Conceptually then, today's poverty line is identical in buying power to that of forty years ago -- despite steady growth in average incomes and massive changes in buying patterns.
In the 1980s, people used to worry publicly about deprivation. In the 1990s, a decade when the official poverty rate was even higher than in the 1980s, that worry has gone quiet. Maybe it's because liberal pundits and think tanks have been disarmed by the fact that there's a Democrat in the White House, or maybe we're too busy celebrating the New Economy. Even though polls suggest the public finds the official poverty line unrealistic, lawmakers and pundits are extremely reluctant to embrace a rethink. With eligibility for many public benefits tied to the poverty line, it might force more public spending at a time when surplus accumulation is the fiscal fashion. And it's a serious blow to the founding myths of America, the land of optimism and the two-car garage. Who'd want to be the first politician to publicly admit that, in this very rich country, one in five of us are actually poor?
Doug Henwood edits the Left Business Observer. His book A New Economy? is due out later this year from Verso.