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New poverty calculus: Cause for alarm or political deception?

When the Census Bureau started counting food stamps and tax breaks as income, the poverty rate went up, not down. Some say the new poverty rate is a nuanced picture. Critics say its a ruse.

By Staff writer / November 7, 2011



ATLANTA

The Census Bureau's attempts to improve how the government measures poverty have unleashed criticism from conservatives who say the move is a bid to politicize America's class struggles.

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The new Census measure suggests that the ranks of the poor – at 49 million – are 3 million larger than previously thought. The increase comes in the new way poverty is measured. The new Census report for the first time includes government subsidies and benefits such as food stamps as a part of household income, but it also factors in rising costs, such as health-care expenses. The result creates a new poverty line and a new view of who in the US is poor. 

The new threshold for poverty for family of four, for example, is $24,343, as opposed to $22,113. And the revision reveals greater poverty trends among Asians, Hispanics, whites, and the elderly, and declining poverty for blacks and children, who tend to be greater beneficiaries of food stamps.

Sociologists say the new numbers give greater nuance to the portrait of poverty in the US, highlighting the degree to which government programs are keeping struggling Americans afloat. Critics counter the numbers are engineered precisely to make government assistance appear indispensable and to pave the way for a broader redistribution of American wealth toward the poor. 

The debate comes at a time when concerns about economic justice are at a high pitch amid ongoing Occupy Wall Street protests around the country, and with Republicans claiming that the Obama administration's efforts to tax millionaires amount to "class warfare."

The Census changes are the first revisions to how the poverty rate is calculated since 1963. Since then, it has been gauged solely by cash income per household. But the new figures give a larger sense of what impact government spending has on poverty, says Timothy Smeeding, an economist at the University of Wisconsin in Madison.

"An awful lot of this is where you set the levels and calculate the level of the poverty line," he says. "But it also reflects the programs that you really care about, that we've been using to fight poverty, including public housing, tax credits," and food stamps.

This plays to attempts by Democrats and the Obama White House to bolster public support for government aid for poorer Americans, critics say, which is why Republicans, if they gain control of Congress next year, would likely work to dismantle the new poverty rate measurement by defunding it.

Critics add that that the new measures make it impossible to shrink poverty rates without ensuring that poor people's wages rise faster than middle-class wages. 

"This [new count] is a deliberate deception, a Trojan horse to smuggle the goal of income leveling in under the slogan of poverty," says Robert Rector, a poverty expert at the conservative Heritage Foundation. "The reason they call it poverty instead of income inequality is that there's not a lot of political demand for income equalization in the United States."

A large part of the increase in poverty comes from rising medical costs, the Census Bureau says, which affected the poverty rate jump among older Americans – from 9 percent under the old formula to nearly 16 percent under the new one.

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