The current federal poverty line -- $20,444 for a family of two adults and two children -- is hopelessly, ridiculously outdated. Based on consumption patterns from the mid-1950s, the formula for determining who is impoverished does not deal with the significant rise in single-parent homes, the expanding share of income now devoted to real estate costs, or the decrease in available low-skills jobs complete with health insurance and other benefits.
Today the House Ways and Means Committee is considering a proposal from Rep. Jim McDermott (D-WA) that would modernize how we "calculate" poverty, updating the formula to reflect contemporary consumption patterns and consider regional differences in the cost-of-living. But as Margy Waller writes at the indispensable DMI Blog, the changes would amount to, well, small change. McDermott's proposal would lift the poverty line from $20,444 to just $21,818 -- still an impossibly tiny income for a family of four to live on, especially in an urban area. It's useful to remember that most low-income people live in rental housing without any kind of subsidy. Nine percent of all American families are living in rentals that are unaffordable -- meaning housing costs exceed 30 percent of household income.
If your annual salary is $21,818, that would mean "affordable housing" would cost you just $545.45 per month. It is very difficult, if not impossible, to find adaquate, safe housing for a family of four at that price -- certainly in cities. And if $545.45 is what you can afford to pay on housing, you will likely be in a neighborhood with failing schools and a lack of other public services. So, as Waller writes, we really need a whole new way of "counting" poverty, one that considers regional inequality alongside income, and one that actively seeks to equally fund and improve the public services, including schools, that poor families rely upon.
--Dana Goldstein
