Scaping By: Ehrenreich Interview

Roger Odisio rodisio at igc.org
Wed May 16 20:23:20 PDT 2001


Max Sawicky wrote:
> . . .
> Johnson's people, however, seized on the emergerncy food budget and made
> that the basis for the national poverty line. They then multiplied the
> food spending by 3 (based on misuse of spending patterns, which have in
> any case changed a lot) to get the full budget. As a bonus the number
> came out to $3,000 for a family of 4, which made a great headline in
> announcing the program. . . .
>
> Unfortunately this is a two-edged sword.
>
> The right wing line on the poverty line is that since
> the food is now a fifth of family budgets instead of
> a third, you should stipulate that 60% of the family
> budget (3/5th's) is the poverty line. (see Robert
> Rector of Heritage Fndn, among others)

It's not a double edged sword, Max. Your friendly compassionate rightwingers' argument is simply meaningless. Nothing useful can be said about changes in the poverty line solely by reference to the multiplier used to calculate it.

Basic food costs are multiplied by some number which is a proxy for the nonfood costs that are not measured. A change in the multiplier only has meaning with reference to a particular level of food costs. In fact, absent evidence that basic food costs declined in real terms, a rise in the multiplier *must* be due to an increase in nonfood spending (e.g., health costs), and the poverty line must be correspondingly higher (67 percent higher in the case of the multiplier rising fronm 3 to 5). However, if the multiplier rose mainly because real food costs declined, and if that decline was large enough, then a larger multiplier could result in a lower poverty line. But that's the only way that case can be made. Not by shabby data tricks as you describe.

It turns out that, as pointed out by Stone in the American Prospect article linked by Hank Leland (packed with good info, btw), in '67, soon after the poverty line was fabricated, Orshansky tried to convince the Johnson people to change the multiplier to 4, since "everyone knew" that's what it really was. Needless to say she got nowhere; everyone realized that would raise the line by 1/3 and cost a whole lot of money.

But at least she didn't have to put up with the ridiculous argument that if the multiplier was a larger number, that must mean the poverty line was really lower.

RO



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