Eradicating poverty?

Bill Knight column for Thursday, Friday or Saturday, Oct. 26, 27 or 28

The International Day for the Eradication of Poverty came and went last week, and one hopes steps were made to address, if not alleviate, the yoke of poverty.

(In Illinois – where the preamble to the state constitution expressly says part of the state’s mission is to “eliminate poverty and inequality” – citizens must wonder whether lawmakers have read the document they swore to uphold.)

The challenge is made more difficult when the problem’s extent is nclear.

The Census Bureau’s Current Population Survey sets the country’s Poverty Threshold, and its guidelines set figures astonishingly low. For example, its “poverty level” for households with two adults and two children younger than 18 is $24,339 a year. It doesn’t vary from location to location. The survey maps Illinois’ poor at between 13 and 15.9 percent.

An alternative measurement of poverty is the “self-sufficiency standard,”  devised by the Center for Women’s Welfare to include sensible factors such as geographic differences in the cost of living, plus detailed expenses such as housing, child care, food, transportation, health care and taxes (and tax credits). Here are the most recent (2009) – and more realistic – annual incomes necessary for self-sufficiency for two adults with one infant and one pre-schooler in these 11 Illinois counties: Fulton ($41,950), Henderson ($39,134), Henry ($43,678), Knox ($39,896), Livingson ($49,783), McDonough ($38,590), Mercer ($40,013), Peoria ($51,754), Tazewell ($50,978), Warren ($36,831) and Woodford ($50,641).

This summer, a national survey by Harris Poll for CareerBuilder found that 78 percent of Americans live paycheck to paycheck, and the average net worth of the U.S. household as $7,500 last year, it’s been shown by the Credit Suisse investment bank’s research institute.

The Poverty Threshold is the dollar amount used by the Census Bureau just as a measurement to determine households’ poverty status by comparing pre-tax cash income and a threshold set at three times the cost of a minimum food diet in 1963, even with Consumer Price Index Cost of Living Adjustments (added in 1969).

For a single person younger than 65 years old, it’s $16,072, according to figures released in August.

Maybe more significant is that poverty guidelines are derived from data from the 1960s. Mollie Orshansky, a Social Security Admininstration clerk assigned in 1963 to report on how poverty affects children, realized there was no gauge of poverty, so she created one based on a 1955 Departent of Agriculture report that said families with at least three members spent about one-third of their monthly budget on food, a higher percentage than today.

In 1965, President Lyndon Johnson launched his “War on Poverty” (which it seems we lost). In 1969, Orshansky’s thresholds were made the official federal definition.

In the decades since, the median (midpoint) family expenses on basic needs increased more than 25 percent. Costs have risen dramatically: housing up 250 percent, health care up 500 percent, food up 100 percent and college costs up 1,000 percent while wages have stagnated.

Other common expenses don’t figure in to government poverty estimates: medical emergencies, repairs to cars, homes or appliances, telephone costs, taxes or out-of-pocket expenses for work.

Things changed, reminds the Center on Budget and Policy Priorities (CBPP).

“The old poverty line is out-of-date and, in fact, is too low – it hasn’t kept up with our new necessities; it hasn’t kept up with new ideas of what our basic needs are,” said CBPP senior researcher Arloc Sherman. “The rise in families with children where all parents are working for pay is driving up the importance of paid child care. Spending a few thousand dollars on child care is fairly typical now. Child-care costs have risen faster than inflation.”

Decades ago, child care was neither needed as much as today, nor as pricey. For example, the state’s Department of Human Services reports child-care prices based on National Data System for Child Care and found that Illinois families in areas with at least one urban area pay about $45 a day for toddlers, and those in rural areas pay about $31 a day for toddlers.

 Thomas Gabe of the nonpartisan Congressional Research Service (CRS) in 2015 said, “If the same basic methodology developed in the early 1960s was applied today, the poverty thresholds would be over three times higher than the current thresholds.”

Maybe eradication or elimination must start with education: How many of us are poor?