Peace & Justice

This is the blog of the Commission on Peace and Justice for the Roman Catholic Diocese of Albany, New York.

Tuesday, July 20, 2010

Federal Poverty Level Outdated

Many experts agree that the current system in the United States for calculating poverty and distributing aid is outdated.
The formula, developed in the early 1960s, is based on the cost of food to maintain a minimal nutritious diet. At the time, food made up one-third of a family’s household budget; today, food makes up only about 13% of the average family’s budget while housing has taken up a greater percentage of income.
In addition, the federal poverty level is the same throughout the United States, even though the cost of living varies by geographic location.
A coalition of non-profit groups has developed what is called a self-sufficiency standard for each of the counties in New York State, to more accurately reflect the amount of income necessary for various family types to meet basic needs without the help of public subsidies or private or informal assistance. The self-sufficiency standard includes specific, heavily researched data on the average costs of housing, health care, child care, food, transportation and taxes in each county.
The self-sufficiency standard is up to five times higher than the federal poverty level for some single parents in urban areas, and is rarely under 200% for any family type or geographic location.
The federal poverty level’s faulty assumptions and out-dated information present very serious problems, since it is used to determine eligibility for government assistance programs. The self-sufficiency standard’s more realistic data can and has been used as a tool to evaluate the impact of current and proposed work supports (SNAP/Food Stamp Program, Medicaid) or policy changes in child care co-payments, tax reforms or tax credits on family budgets.
For example, according to the self-sufficiency standard, a family in Albany County with two adults and two children (an infant and a preschooler) would need to make almost $65,000 annually to sustain itself without assistance. That is almost 300% of the federal poverty level, well above the 200% cutoff for many government programs.
To read the full report on the self-sufficiency standard and access county tables, click here: