We Need a New Way to Measure Poverty Essay

We Need a New Way to Measure Poverty Essay

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Poverty in the United States is one of many difficult problems handled today. In 2010, 15.1% of the American population was living below the poverty threshold. But, how did the government calculate the poverty rate? The United States government uses the Orshansky poverty thresholds, which uses family budgets to determine if the family is above or below the poverty threshold. The current United States poverty measure is an absolute, headcount measure using family income as its scale of resources. However, many would agree that the poverty measure is flawed and that the poverty measure overstates how many people are really in poverty. This is a problem because resources government programs uses to help the poor can unevenly distribute. Therefore, I would like to propose a different poverty measure. In this paper, I would like to argue for a poverty intensity measure that is relative, with earnings capacity as the scale of resources and counts the household as the unit of analysis. First, I will discuss more about the flawed U.S. poverty measure; second, I will explain the four components necessary for poverty measures; third, I will make my proposal against the current measure and conclude about the two poverty measures.
The best way to describe what happened to Orshansky’s measure is that it was “a fish out of water”. Orshansky’s measure was originally meant to be used for research purposes, not for policy making. The basis of her measure originates from her experience from the U.S. Department of Agriculture (USDA). She used food consumption and family income defined by food budgets to decide how much a family would need in order to live, which intuitively would make sense seeing how food consumption will never disappear. Using th...


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...on, to measure poverty in the United States, the measure requires four components: the scale of resources, the unit of analysis, the poverty threshold, and the depth of poverty. The current U.S. measure has all these components but the problem is that it is too strict and does not explain much about the situation in the U.S. My proposal is more flexible explaining why the poor are poor because it is sensitive to the times and cultures of the society, accounts for the majority of available resources to the poor, and shows where they are in the poverty spectrum.



Works Cited

Brady, David. Rich Democracies, Poor People: How Politics Explain Poverty. New York: Oxford University Press, 2009. 26. Print.
Horner, Stephen, and Frank Slesnick. "The Valuation of Earning Capacity: Definition, Measurement and Evidence." Journal of Forensic Economics. 12.1 (1999): 15. Print.

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