Poverty LineWell, I just made up the title, but it works. So here is the issue, the Department of Health and Human Services in the federal government gauges the poverty line with a formula using the cost of groceries as a third of your monthly expenses. They then peg the cost of these groceries to the Consumer Price Index. I have no issue with how they calculate the cost of our milk (rice milk for me) or other food stuff. Where I see major issue is in how much of our budget is calculated as food, never mind gas, rent, and health care. Furthermore, this calculation has left us with a poverty line of $15,130 for a family of two. Who really believes two people can live off of $1,260 a month? That wouldn’t even cover mine and my wife’s student loans, let alone food or a roof.

The Distortion

Take for instance, between my wife and I we spend about $50 a week on groceries. This comes out to $2,400 a year. Therefore, if this cost was the marker for the cost of groceries at poverty based on the formula used by the DHHS then the poverty line in this scenario is $7,200. So are we eating beans and rice everyday? On most nights yes, but we do well by ourselves. As for our bills on a whole, well let’s not talk about college loans and such for the moment. Just let it be known things are tight. To reiterate, the national poverty line for a two person household is $15,130. My wife and I make much more than that, but we are still forced to spend less in food than the poverty line suggests in order to survive. I didn’t point this out to emphasize our frugal nature, but rather to show how distorted this calculation is.

Census Bureau

Also, keep in mind I’m advocating adjusting the current cost of groceries to maintain a healthy life, which comes to about $105 a week for a family of two at poverty. According to the Census Bureau groceries should only make up 13% of your income, not 33%, which the Department of Health and Human Services uses. If we adjusted the minimum grocery standard to the Census Bureau expense ratio we get a poverty line of approximately $38,833 not $15,130 for a two person household. This throws the calculations off a bit doesn’t it? Is a two person household really in poverty when they make almost forty thousand a year? Can we also say the same house, making fifteen thousand a year is doing just fine and they can meet all of their basic needs?

The Fix

I suggest we use the Census Bureau standard of 13% for groceries along with a recalculated cost of groceries based on regional prices, which could still use the Consumer Price Index if need be. Even if we went with how much I spend on groceries as the poverty line it sets annual income at $18,480 for a family of two. Much more realistic than $15,130. Ultimately, the discussion comes down to whether or not someone making $18,480 needs public assistance in order to survive. My answer is yes. Support the fictitious TIP Act and help those in need survive these hard economic times. Comments are welcome.

Vote for this solution with the star ranking above, share it with your friends, and subscribe to Political Verve to promote progress and the American dream.

Links: Department of Health and Human Services | 2012 Poverty Level Chart | Wikipedia “Poverty in the United States” | Poverty Guidelines DHHS | Census Bureau Cost of Living Index | Further Reading

About these ads