Tuesday, 16 July 2013 21:12

Is the Federal Poverty Line Too Low to Meet Basic Needs?

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A new report published by the Economic Policy Institute revealed that the federal poverty line is actually far lower than what is necessary to meet basic needs in even the least expensive regions of the United States.

While the United States couldn’t be considered an impoverished nation by any means, we nonetheless close our eyes to the conditions in which many of our citizens are forced to exist.  We do this in casual ways when we allow homeless people sleeping in alleyways to become a part of the urban landscape, and we also do it when we believe that government programs are enough to keep a family out of crisis.  As it turns out, the federal government isn’t fully aware of what is needed to survive within our own borders.  

As much as we want to believe that the worst of the financial crisis is over, it seems that we are grossly overestimating the annual income necessary to support a family of four throughout the United States.  The federal poverty line is defined as being $23,280, an amount that cannot sustain four people in any city in America – even the county with the lowest cost of living requires nearly double the amount to adequately care for a four member family.

For a full-time worker earning minimum wage it would be nearly impossible to meet basic needs in nearly any part of the United States.

The metrics used to determine the amount of money needed to meet basic but modest needs was developed in 1964 and has only adjusted for inflation and the increase of food costs.  Regional differences in housing costs were not taken into account – the monthly housing costs for a dwelling appropriate for a four person household range from nearly $2000 per month (in Hawaii) to slightly under $600 per month (in Tennessee), nor were the regional variations in the costs of transportation, healthcare and child care, among other factors.

Another factor that influenced the findings in the original metric was the over all reduction of the cost of high end electronics, but it doesn’t take into account the fact that, while electronics weren’t a necessity in terms of job responsibilities and information acquisition in 1963, they certainly are today.

The woefully outdated system for determining what is and isn’t the American poverty line has affected federal economic policy, since it a major indicator of whether or not Americans are financially secure.  Until the calculator is revised, we might never be fully aware of how people in our own country have to live.


[1] Berman, Jillian: Federal Poverty Line Doesn’t Adequately Reflect Cost of Living In America, Analysis Finds 7/2/1013 Huffington Post http://www.huffingtonpost.com/2013/07/03/federal-poverty-line-afford-to-live_n_3541338.html
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