Planet Money
1:44 pm
Mon September 16, 2013

The Poverty Rate Ignores Programs That Fight Poverty

Originally published on Mon September 16, 2013 3:49 pm

New U.S. poverty numbers come out on Tuesday. But what, exactly, do those numbers measure?

Consider the case of Ann Valdez. She's a 47-year-old single mom who lives in an apartment in Brooklyn with her teenage son. She doesn't have a job. She gets a cash payment of about $130 every two weeks from the government. That's all that's counted for her income in the government's poverty measure.

But Valdez also gets $367 a month in food stamps. The government pays $283 a month for her apartment, which she says would rent for $1,100 or so on the open market. And the government pays for her health care, through Medicaid.

Valdez still has a tough time making ends meet. "We are not living the life of Riley," she says. "Poverty is like being trapped in a room you can't get out of, with straps restraining you, tight enough that you feel sometimes you can't breathe."

Still, if you include the value of her benefits, Valdez's income is far higher than the official poverty numbers suggest. This raises a question: If you count all her benefits, is Valdez still living in poverty?

A few years ago, the New York City developed its own poverty measure that accounts for government benefits, and also considers the cost of living. (The federal government has developed a similar measure, but still uses the old measure for the official poverty numbers.)

The idea, says New York's deputy mayor Linda Gibbs, is to know "how many people are living below what we believe is the minimum level of sustenance necessary to make ends meet. And that's not to have a big fancy life. It's not even to have like an okay life. It's just meeting the bare minimums."

Others are trying to measure poverty in ways that go beyond income. Researchers at Columbia are following 2,000 New York households for two years, tracking what they call "material hardship." Can families keep the lights on? Has anyone missed a meal, or skipped a doctor's visit because there's not enough money?

Linda Gibbs says policymakers need to be guided by measures that go beyond the basic federal poverty numbers. "If you're in the business of saying, 'Poverty is a problem, we want to overcome poverty, we want to help people to not live in poverty,' you've got to know what you're talking about," she says.

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Transcript

ROBERT SIEGEL, HOST:

New U.S. poverty numbers come out tomorrow, but the nation's traditional poverty measure isn't necessarily the best way to measure poverty. As Pam Fessler of NPR's Planet Money Team reports, the official numbers leave out some crucial information.

PAM FESSLER, BYLINE: Ronald Reagan had this famous quote.

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PRESIDENT RONALD REAGAN: My friends, some years ago, the federal government declared war on poverty, and poverty won.

FESSLER: But Christopher Wimer, a researcher at Columbia University, says it might only look like that because of how the government measures poverty.

CHRISTOPHER WIMER: If we're measuring poverty in a way that doesn't actually capture some of the main things that we do to fight poverty in this country, then, of course, you're going to be able to tell a story that we fought a war on poverty and poverty won.

FESSLER: What Wimer means is this: The government counts the poor using a 50-year-old formula. It looks at an individual's or a family's cash income to see if it falls below a certain line. But it doesn't count things like food stamps and other aid.

WIMER: Things like school meals. Things like housing subsidies, housing assistance.

FESSLER: Even though such benefits can help a struggling family get by.

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FESSLER: Take Ann Valdez of Coney Island, Brooklyn. She's 47, a single mother with a teenage son at home. We meet at the boardwalk, near the amusement park, where she used to work as a teen.

ANN VALDEZ: Hey, Bud.

UNIDENTIFIED MAN: How you doing?

VALDEZ: Really good.

FESSLER: But today, Valdez has no job, hasn't had one for awhile. And by government standards, she's extremely poor.

VALDEZ: Cash, I'm getting something like $130 every two weeks for me and my son.

FESSLER: That's from welfare and all that's counted as income in the poverty measure. What's not included...

VALDEZ: Food stamps is $367.

FESSLER: That's once a month. The government, which requires Valdez to do 35 hours of unpaid work a week for her benefits, also pays $283 a month for public housing. Valdez says her apartment would cost four, five times that amount on the open market. And then there's health care.

VALDEZ: I have Medicaid. But thank God, my son and I don't get too sick.

(LAUGHTER)

VALDEZ: We don't get sick too often.

FESSLER: Valdez still has a tough time making ends meet.

VALDEZ: No, we are not living the life of Riley. OK?

FESSLER: But depending on how you do the math, she is getting at least three times, and probably a lot more, than what the official numbers show. Which raises the question: Is she still poor and by whose definition? Linda Gibbs, New York's deputy mayor, says the answer is important.

LINDA GIBBS: If you're in the business of saying poverty is a problem - we want to overcome poverty, we want to help people to not live in poverty - you've got to know what you're talking about.

FESSLER: So a few years ago, the city developed its own poverty measure. It was frustrated that the federal one was so limited. New York now looks at the impact of benefits and cost-of-living and, in fact, the federal government has since adopted a similar supplemental measure. Gibbs says the city has learned some valuable things, like how much children are helped by public assistance. But she admits even New York's measure gives only a limited view.

GIBBS: What it's intended to tell you is, point in time, how many people are living below what we believe is the minimum level of sustenance necessary to meet - make ends meet. And that's not to have a big fancy life. It's not even to have like an OK life. It's just meeting the bare minimums.

FESSLER: But as some people see it, there's more to poverty than that. And if you're going to fight a war, you have to know what you're up against. Take Ann Valdez again. There's much about her life that the numbers don't show, like the fact that she's not only on public aid, she feels stuck there as she sees others around her getting ahead. For her, it's also about hope.

VALDEZ: Poverty is like being trapped in a room you can't get out of with straps restraining you, tight enough that you feel sometimes you can't breathe.

FESSLER: So some researchers are trying to find a different way to measure poverty that goes beyond income. Wimer and his colleagues at Columbia are following 2,000 New York households, tracking what they call Material Hardship, asking questions like: Can you keep the lights on? Has anyone missed a meal? Do you avoid going to the doctor because you don't have enough money?

WIMER: We're also looking at, sort of some non-economic measures of disadvantage too. So that includes things like health. That includes things like kids' healthy development, getting good grades in school, being ready for school when they start school.

FESSLER: And others are asking squishier questions. How do you feel about your life? Is your community a place where you want to live? Are you happy? Deputy Mayor Gibbs recalls going out with those measuring poverty in Great Britain. They not only asked if everyone in the household had shoes and a good winter coat, but also...

GIBBS: Can the parents go on a date with each other without the kids at least once a month? It's a totally different way of really getting at sort of a more quality of life standard, rather than you know, how much money do you have and how much money do things cost?

FESSLER: So what are we talking about - government-subsidized babysitters for the poor? Probably not. But Gibbs and Wimer would say until you get a better picture of the problem, it's hard to know the best way to help. Pam Fessler, NPR News.

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SIEGEL: This is ALL THINGS CONSIDERED from NPR News. Transcript provided by NPR, Copyright NPR.