What's poverty?

Child well-being improved in most categories, reports the Casey Foundation’s Kids Count Data Book. However, the nation needs a new way of calculating the poverty rate, the report said.

The report documented improvements since 2000 in the infant mortality rate, child death rate, teen death rate, high school dropout rate, and teens not in school and not working. Four areas have worsened: low-birthweight babies, children living with jobless or underemployed parents, children in poverty, and children in single-parent families.

Next year’s report, which will include post-recession data, is expected to show more children living in poverty.  However, the poverty formula, developed in the ’60s, is “thoroughly outdated,” Casey concluded.

It calculates the cost of a basic grocery budget for a given family size and multiplies the total by three because food, in the ’60s, represented one-third of a typical family budget.

The formula has not been recalculated since then even though, according to Casey, food now accounts for only about one-seventh of a typical family’s budget.

The formula takes no account of child care, transportation, health insurance, and certain government benefits such as food stamps and housing vouchers. Also — except for Alaska and Hawaii — it does not reflect regional differences in the cost of living.

After years of decline, the teen birth rate rose from 2005 to 2006. However, recessions often curb the birth rate. Births are down in Silicon Valley, except for mothers over 40.

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  1. The ’05/06 rise in teen birthrate was a bit unsettling. Casey’s quite right about the need to recalculate the poverty rate.

  2. Kevin Smith says:

    Not accounting for regional variation is a real problem….

  3. Kevin Smith says:

    Poor in Manhattan is a lot different than poor West Virginia.
    But I have also seen studies where the teen pregnancy rate would include married 19 year old soldiers wives (insured and with diplomas). Does anyone know if that is still true?

  4. If we recalculate the poverty rate, would the income cut-off rise or fall? And what would change in either case? Would states immediately rush to increase benefits to the newly impoverished?

    Yes, it probably needs to be updated, but I wonder what the pragmatic point of the exercise would be.

  5. Kevin Smith says:

    If it were adjusted for regional cost of living differences it would probably rise in some areas and fall in others.
    I do think that at some point in time we need to revisit the concept of relocation. Many inner city projects are little more than economic prisons. A large reason a lot of the New Orleans evacuees never came back is they found jobs in the places they were evacuated to. Why wait for a natural disaster to move people to a better place? A little assistance relocating is better (and probably cheaper) than a lifetime of welfare.