[PEN-L:5166] Re: one more request

[dhenwood@xxxxxxxxx (Doug Henwood)]

At 3:26 PM 5/20/95, DOUG ORR wrote:

>I have one last question.  A couple of years ago, Patricia Ruggles wrote
>a monograph for the Urban Institute on changing the poverty line.  One of
>the points she made was that the basic food budget should now be multiplied
>by four, rather than three, to get a minimal poverty line.  Using the
>current poverty line, the poverty rate is 15.1%  Does anyone know with
>certainty what it would be if we used Ruggles' alternative measure?

The figure from Ruggles I used in my State of the USA Atlas was 25.8% in
the "late 1980s," which was roughly twice the prevailing rate at the time.
Sorry I don't have the exact year. My source was a transcript of testimony
she gave before the US House Select Committee on Hunger, Oct 4 1990. I
think she did more than multiply by four - she redid the whole market
basket including child care and medical costs. There's probably more detail
in the book she did, but I don't have that at hand.

Jack McNeil of the Census Bureau does estimates of relative poverty, which
are not official Census pubs; for 1992, when the official poverty rate was
14.5%, McNeil's relative poverty (pretax, posttransfer income <50% of
median) was 22.3%. Luxembourg Income Study figures show a US posttax,
posttransfer poverty rate (<50% of median) of 18.1% around 1985/1986, and a
near-poor (50-62.5% of median) of 8.2%, at a time when the official poverty
rate was 13.8% (1986, 13.6%; 1985, 14.0%). A nice rule of thumb is that
more honest poverty rates are somewhere between 1.5 and 2.0 times the
official number, not unlike the unemployment rate.

An important point - the US poverty line was fixed in the early 1960s and
has simply been adjusted for inflation ever since. It is, therefore,
conceptually based on absolute, rather than relative, notions of poverty.

Doug

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Doug Henwood
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