Friday, October 19, 2018

Changing the Poverty Numbers

Trump’s Council of Economic Advisers declared that poverty had, for all practical purposes, been eliminated. In a technical report, the economists wrote that the nation’s poverty rate was only 3 percent, rather than the Official Poverty Measure (OPM) of 12.3 percent for 2017, declared by the Census Bureau this September.
However, we are reminded of  Ronald Reagan’s famous declaration, in his 1988 State of the Union address, that “the federal government declared war on poverty, and poverty won.” 
The poverty rate is nowhere near as low as 3 percent. It is nonsense.  Almost all economic specialists found the methodology faulty.  If the claim that poverty is now 3 percent rather than the reported 12.3 percent had any validity, it would mean that more than 30 million fewer Americans are poor than previously reported.
Back in the real world, scholar Kathryn Edin, also with Luke Shaefer, published a book in 2016, $2.00 a Day: Living on Almost Nothing in America, which shows that 1.5 million families in America live on $2 of cash income a day per family member. They exclude the imputed income from SNAP because food stamps are not cash—you can’t use them to buy a warm coat for your child or to pay the electricity bill, they point out. Still, even if you include SNAP, 750,000 families live on $2 a day per family member, by their measure. That is roughly the same as the World Bank’s poverty line for poor nations.
The Kaiser Family Foundation finds that 62 percent of Medicaid recipients have full- or part-time jobs. Regarding SNAP, four out of five recipients worked either the year before or after they received food stamps (the typical SNAP recipient from 2008 to 2012 received benefits for just one year). As for TANF, it is in fact mostly failing. In 1996, benefits were provided to 68 percent of poor families, compared to 23 percent today, under TANF. More to the point, the jobs that recipients had been required to take under TANF mostly turned out to be short-term. 

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