Out With The Old, In With The New

Introduction of Measuring American Poverty Act - “Long Overdue”
Current Federal Poverty Level Deeply Flawed

Wider Opportunities for Women applauds Subcommittee Chairman Jim McDermott for his draft legislation to revise the 55-year-old federal poverty line unveiled on Thursday, July 17th at a hearing before the Income Security Subcommittee of the House Ways and Means Committee .

The proposal goes a long way toward addressing the deep flaws in the current measure in use since 1964.

In addition, WOW is most pleased with the proposal’s authorization of a new study by the National Academy of Sciences to determine a definition of a “decent living standard threshold,” or “the amount of annual income that would allow an individual to live beyond deprivation at a safe and decent, but modest, standard of income.” (Sec. 1150C) Anticipating that this would be a measure of genuine income adequacy rather than the deprivation measured by the new poverty line, it holds great potential for use by individuals, program administrators and policy-makers. We hope it does not get overlooked in the rightful attention that will be given to revising the poverty measure.

Underpinning Chairman McDermott’s proposed Modern Poverty Measure is the National Academy of Science’s 1995 report on measuring poverty, which properly addressed many of the flawed assumptions and methodology of the current poverty level. In applying these recommendations to a Modern Poverty Measure (MPM), we recommend that final legislation:
ADD bullets to the items found below:

· Include the cost of health care, child care and transportation as part of the threshold for the reference family rather than as a subtraction from income. While not universal, such expenses are critical and often determinate of financial viability for working families.

· Make the MPM as geographically specific as possible, considering variation, as the NAS report stated, “…to the maximum extent possible.” While housing has a disproportionate impact on family income needs, and housing markets vary significantly across the country, the Self-Sufficiency Standard demonstrates that it is possible to identify non-housing expenses and data sources such as through child care market rate surveys mandated by TANF.

· Account for critical demographic differences reflected in age. Those 65 or older do not have the same work-related expense as working age Americans, and their economic well-being is greatly affected by their housing and health status. The discussion draft’s “medical risk index” will address this but outside the framework of a threshold for a decent income.

· Establish a commission to review annual findings that informs the public how many Americans are living at or below the new poverty measure and the proposed “decent standard of living.” The Commission should make recommendations on how to close the income gap for those whose income does not equal the “decent standard living.” The information should be analyzed for individual cohorts of age, gender and race.

To read the statement in its entirety please visit the following link: http://www.wowonline.org/ourprograms/fess/documents/PressStatement_Poverty_July2008.pdf