Beyond the So-Called Poverty Line: The Income-Hardship Gradient Today
|Written by Shawn Fremstad|
|Wednesday, 04 December 2013 12:52|
My former CBPP colleague Arloc Sherman has a great, just-the-facts post on the extent to which Americans experience economic hardship, like difficulty affording adequate food, living in overcrowded housing, not being able to pay rent or the mortgage on time, or having utilities cut off. As Sherman notes, Census recently found that several measures of specific economic hardships increased between 2005 between 2011.
Sherman also calculates the differences in children’s economic hardship rates by household income category (under 100% of the federal poverty line, between 100-200% of it, and above 200%). As one would expect, there is a fairly steep income-hardship gradient, with hardship rates increasing as income falls.
One thing I would add to this is that there are actually more children who experience food- and housing-related hardships above the federal poverty line than below it. This isn’t because there are lots of wealthy parents spending the grocery and mortgage money on single malt Scotch, designer drugs, and plastic surgery. In fact, given income inequality trends, it has become pretty darn close to impossible for wealthy parents to spend enough on these things to also not afford luxurious food and housing.
Rather, the real issue is that the current federal poverty line is absurdly low and antiquated. Even double the federal poverty income guideline for a family of four is several thousand dollars below what most Americans say is the minimum amount of money such a family needs to get by. In 2013, twice the federal poverty guideline for a family of four is $47,100; by comparison, $50,000 was the median response earlier this year when Gallup asked Americans for the smallest amount of income a family of four needs to get by (the average was $58,000).
If one looks just at children under 200 percent of poverty, the income-hardship gradient isn’t as steep as one may think. For example, Sherman’s figures show that the risk of overcrowding for the roughly 16.2 million children living between 100 to 200 percent of poverty (22 percent) isn’t all that different than the risk for the 16.5 million more children living under 100 percent of the poverty line (29 percent). It’s not until you get safety above the typical American’s view of the minimum income needed to make ends meet that hardships like these really drop off dramatically.
Hardship data, aside from the poverty measure, doesn’t get any where near the attention it should in the media or even from researchers and advocates. This is in large part because most of our direct measures of economic hardship are relegated to the Survey of Income and Program Participation, rather than being part of the annual American Community Survey and Current Population. In other counties, most notably the United Kingdom, hardship measures are more directly integrated into annual poverty measurement. For more on the UK approach, see my 2010 CEPR paper on developing a modern framework for measuring poverty and basic economic security.