1. POVERTY MEASURES FDR: "one-third of a nation ill-housed, ill- clad, ill-nourished" US Poverty Rate: absolute standard Ireland, Smeeding “relative poverty rate” Canada: Low-income limit, based on disposable income World Bank: Consumption levels below $1 or $2 per day.

2. Absolute Poverty Standard: World Bank

8. What is Poverty? In 1963-1964, Molly Orshansky based poverty thresholds on the “thrifty food plan”, Thrifty food budget (family of 4) = $1,033 Families spent 1/3 of their budget on food. 1963 Poverty level = $3,100 Subsequent years, adjusted for CPI inflation index

9. Poverty thresholds

10. Problems with definition of Poverty Wealth and debt not counted Unusual family expenditures not counted. Regional living costs Families now spend only 1/6 th income on food MEASURING INCOME……….

11. Measuring Income money income before taxes, including wages, salaries, interest, dividends, self- employment income, welfare payments (TANF), unemployment insurance, and social security payments. Poverty Report from March Current Population Survey, 50,000 householdsPoverty Report

12. Problems with the Definition of Family Income Income not counted: Food Stamps, Medicaid & Medicare, Public Housing Persons not counted: the institutionalized, Army barracks, unrelated individuals under 15

13. Problems defining “Family” Must be related Family defined in March, BUT Income, defined in previous year Unrelated children individual counted as neither poor nor non-poor.

14. Overcounting the poor? Inflation adjustment overestimates inflation. Food stamps not counted as income. Other in-kind benefits (which have increased overtime) not counted. (Housing, Medical). Earned Income Tax Credit not counted. Under reporting of income.

15. Undercounting the Poor? Food now takes 1/6 of typical budget. High regional living costs Unusual family living costs (e.g., medical) Increased FICA (social security) taxes Sample under-represents poor