Last month, the U.S. Census Bureau put out its annual snapshot of income, poverty, and health insurance in the United States—which serves as something of an annual report card on the economic well-being of America’s families.
One of the most significant takeaways was the effectiveness of government relief at keeping people above the federal poverty line last year at the height of the COVID-19 pandemic: according to the Center on Budget and Policy Priorities, 53 million more Americans would have been officially poor in 2020 if not for a critical assembly of pandemic-related economic relief measures, from stimulus payments to boosts in jobless benefits, food assistance, medical coverage, and more.
But while it’s always good news to see the enactment of public policies that measurably move the needle on poverty and hardship, a growing number of antipoverty researchers and advocates are raising a fundamental question: What good are these kinds of data if the way the United States defines poverty doesn’t bear any resemblance to the cost of a basic standard of living in the nation today? Likewise, when policymakers and elected officials commit to cutting poverty—or better, ending poverty—what are our leaders accountable to if the nation’s official definition of poverty amounts to just a fraction of what human dignity and economic stability require?
So, to pull back the curtain on how the United States measures poverty, the problems with the official poverty measure, and the push to reform U.S. poverty measurement, Rebecca sat down with three colleagues and friends who know a ton about measuring poverty to talk about how we can do better and why it matters so much:
- Shawn Fremstad, senior fellow at the Center for Economic Policy Research, CEPR, and author of a recent report for TCF, “The Defining Down of Economic Deprivation: Why We Need to Reset the Poverty Line”;
- Shailly Gupta Barnes, policy director for the Poor People’s Campaign and the Kairos Center for Religions, Rights, and Social Justice, which is committed to building a movement to end poverty, led by the poor; and
- David Brady, professor, School of Public Policy, University of California-Riverside and a research professor at the WZB Berlin Sociadmvl Science Center—and author of another report in the same TCF series, “American Poverty Should Be Measured Relative to the Prevailing Standards of Our Time.”
For more on all this:
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REBECCA VALLAS (HOST): Welcome to Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by The Century Foundation. I’m Rebecca Vallas.
Last month, the U.S. Census Bureau put out its annual snapshot of income, poverty, and health insurance in the U.S., which serves as something of an annual report card on the economic well-being of America’s families. One of the most significant takeaways was the effectiveness of government relief at keeping people above the federal poverty line last year at the height of the COVID-19 pandemic. According to the Center on Budget and Policy Priorities’ analysis of census data, 53 million more Americans would’ve been officially poor in 2020 if not for a critical assembly of COVID economic relief measures from stimulus payments to boosts in jobless benefits to food assistance, medical coverage, and more.
But while it’s always good news to see the enactment of public policies that measurably move the needle on poverty and hardship, a growing number of anti-poverty researchers and advocates are raising a fundamental question: What good are these kinds of data if the way the U.S. defines poverty doesn’t bear any resemblance to the cost of a basic standard of living in the U.S. today? Likewise, when policymakers and elected officials commit to cutting poverty, or better yet, ending poverty altogether in the U.S., what are our leaders accountable to if the nation’s official definition of poverty amounts to just a fraction of what human dignity and economic stability actually require?
So, to pull back the curtain on how the U.S. measures poverty, the problems with America’s current official poverty measure, and the push to reform poverty measurement in the U.S., I sat down with three brilliant colleagues and friends who know a ton about measuring poverty to talk about how we can do better and why it matters so damn much.
Shawn Fremstad is a senior fellow at the Center for Economic Policy Research. He’s also the author of a recent report for The Century Foundation called The Defining Down of Economic Deprivation: Why We Need to Reset the Poverty Line. Shailly Gupta Barnes is policy director for the Poor People’s Campaign and for the Kairos Center for Religions, Rights, and Social Justice, which is committed to building a movement to end poverty, led by the poor. And David Brady is a professor at the School of Public Policy at the University of California, Riverside. He’s also a research professor at the WZB Berlin Social Science Center and the author of another report in the same Century Foundation series called American Poverty Should Be Measured Relative to the Prevailing Standards of Our Time. Let’s take a listen.
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Shawn, Shailly, David, thank you so much for taking the time to come on the show.
SHAWN FREMSTAD: Thank you.
SHAILLY GUPTA BARNES: Thank you.
VALLAS: So, to set the foundation for this conversation properly, I figured it probably made sense to start with a quick overview of how we currently define and measure poverty in the U.S. I mentioned up top that the Census just released its annual report on poverty in the U.S. last month, all the new annual poverty data. Shawn, would you talk about how the Census defines and measures poverty and how the main poverty measures that we use in the U.S. actually work? These are the so-called official poverty measure, a.k.a. the OPM, and the supplemental poverty measure, or the SPM. I feel that need to get those acronyms out there before we embark on what probably will become some alphabet soup, but I feel like that’s the place to start.
FREMSTAD: Sure. So, we do have these two primary measures. It’s kind of weird because the measure that is supposedly the official measure is really, really bad. It was created about, I wanna say 50 year— You know, it was created before I was born, and I’m not that young anymore. It’s like an early-1960s kind of development. It basically, at the time it was created, it was just, they did this really minimalist food budget, and they timesed that by three. And then since then, they’ve never updated it meaningfully. So, it probably made some sense back in 1960, but it’s become archaic. All they do is every year for like 50 years now, they’ve increased it for inflation. This was actually thanks to Richard Nixon it became the official metric. He was the one who said, well, we’re not gonna really update this meaningfully every few years. We’re just gonna adjust for inflation. And as a result, it’s fallen further and further and further and further behind just kind of ordinary, basic, middle-of-the-road living standards.
The other one you mentioned, it’s called the supplemental poverty measure. This is a better measure in most respects. One of the big problems with the official measure is it doesn’t count things like taxes, and it doesn’t count things like tax credits and food stamps, things that have become really important. The supplemental poverty measure is better than that. It does count these things, so it’s a kind of fuller thing. But I would say it’s also got some of the limitations. It didn’t really meaning— It updated what’s called the poverty line or the income threshold a little bit in the supplemental. So, it’s a little more reflective of what it takes to make ends meet at a very basic level, but it’s still pretty far behind it.
And just to kind of throw the numbers out there to give you a sense, I think the OPM, the poverty line for say, a family of two adults, two children is about $26,000 now. The SPM is a few thousand dollars higher than that. But most people, when you go and ask them in polls—and there’s all sorts of polls that’ve been done on this, including by places like the American Enterprise Institute, a conservative think tank—people say you need a lot more money to make ends meet and not be poor or to…. You know, there’s different ways the question was asked. So, that’s kind of the story.
These are both fiscal measures of poverty, but they’re also used, the OPM is used, on a lot of programs to set eligibility. And increasingly, because it’s become so out of date, it’s not the actual poverty line. What is done is they multiply it by some numbers! So, like in Medicaid with the expansion, it’s 133 percent of the OPM. But with things like the premium tax credit, it goes up to 400 percent of the OPM. So, you have this kind of recognition, I think, that it’s declined in value over time, but nobody’s really said we just need to update that.
And I think the only other thing I’ll put out there is there’s a lot of programs that don’t use poverty measures these days. They use, like housing programs, we use income levels linked to median income. The EITC doesn’t really use a poverty measure at all. It just, you know, I think one of the shifts we’ve really seen over time is a recognition that you don’t want people falling off cliffs at very low levels of income. So, ideally you want programs to be universal. Things like a child allowance, you really want everybody to get that, or you want them to phase out as income increases. So, I think over time, we’re kind of moving away from this understanding of everybody whose eligibility for something once they hit this, what is a very low line. But politically, we just haven’t kind of made the shift to actually fix, you know, to have a line that’s realistic and means something and is in touch with where the public is at and what we noticed realistically about what stuff costs these days.
VALLAS: And there’s a lot there that we’re actually gonna get into in much greater detail, but I think that is exactly the right place to start. Shailly, I’m gonna bring you in next. And just returning to the official poverty measure, which is generally what ends up getting relied upon when people are using and referring to sort of headline statistics about how many people are officially poor in the United States or how many people fall below the quote-unquote “poverty line.” What do these Census measures, and in particular, the official poverty measure, what does it tell us about how many people are officially poor in the U.S.? And I mentioned that the Census’ sort of updated data came out just a few weeks ago, so we’ve got kind of new numbers there. And I ask that question knowing that the Poor People’s Campaign is also not a fan of the official poverty measure for reasons we’re gonna get lots into in this episode, as will not be surprising to our listeners based on the title of it. So, my second part of my question is, do the official poverty measures track with the Poor People’s Campaign’s perspective about how many people are actually struggling in the U.S.?
GUPTA BARNES: Yeah. Thanks, Rebecca, for these questions. And the simple answer is, you know, I might start with your second question first, is that they don’t. The Poor People’s Campaign, for many years, we were connecting with poor communities, just hundreds and hundreds of communities across the country, and we were seeing these conditions just over and over again. It didn’t matter kind of where in the country or, you know, seeing them across race, intergenerationally, across all different kinds of local economies. And we started to look into, well, if this is what we’re seeing, what is it that we’re not seeing? And when we started to look into that a little bit more, we had seen for a long time that this official poverty line just, as Shawn was saying, is too low to kind of capture what it means to meaningfully live today.
And so, we’d always, we, for many years, kind of looked at what was happening right above that line. And ultimately, we saw that if you look at the people who are living up to that poverty threshold and then right above it, we’re really talking about 40 percent of the country that is officially poor or one emergency away from economic ruin. And in terms of what that kind of tells us, I mean, first, to have a line that that’s low, it has this distortion on what we imagine poverty to be. And the narratives around poverty get wrapped up in a very inadequate and wholly unrealistic definition of what it means to kind of make ends meet today. And so, the consequences of that are if you’re poor, rather, if you’re not poor, if you don’t fall below this line or some multiple of it, you’re either kind of not deserving, you’re both not deserving of the government programs we have that are designed to address some degree of that poverty, but it actually justifies keeping these programs as they are. And so, I don’t think we often think of the poverty line as having that kind of potential or impact. But earlier this year, Senator Manchin actually used this poverty line to justify poverty wages not just in West Virginia, but around the country.
DAVID BRADY: Mmhmm.
GUPTA BARNES: He said that $11 an hour would keep people in West Virginia above the poverty line. And so, I don’t know. I think that’s also part of the conversation we’re having today and why it’s so important to dissect where we got this from, why it’s still holds, and its impact and how we can do better.
VALLAS: And so, that’s the real picture, and we’ll actually dig into that as well with some other measures that also do better than the official poverty measure. But what does, by contrast, the OPM tell us, the official poverty measure? What does it tell us about how many people are poor? It’s a much, much smaller figure, that you argue, and I think everyone in this episode argues, is actually obscuring what’s really going on.
GUPTA BARNES: That’s right, I mean, it tells us that there are, so let’s see. Shawn and others may have the most up-to-date numbers.
FREMSTAD: Yeah, I just looked these up. [laughs] I should have these in my head, too, but I just looked it up. According to the OPM, it’s about 11 percent last year below the poverty line. The SBM, it’s actually lower. It’s about nine percent. The SPM is partly ‘cause, it’s lower ‘cause it’s counting more benefits. So, and David can talk about this. If you use something, I mean, the U.S. is really an outlier compared to other countries that use what’s called a relative poverty measure or a percentage. They typically measure poverty by 50 or 60 percent of median income, so it’s kind of how far you fall from the middle. And I don’t have those numbers off the top of my head, but it’s gonna be more in the 15, 16 to 20 range, depending on what particular line you’re using and what particular population.
VALLAS: David, I wanna bring you in next. So, Shawn mentioned just a little bit of the history before around where this official poverty measure came from. It rolls the clock all the way back to the middle of the 20th century to a person who has become somewhat famous, maybe notorious, in economic policy history, someone named Mollie Orshansky, who is one of the originators of this measure. And I’ll note there was actually an episode of West Wing that went deep into the history of the poverty measure and Mollie Orshansky and all of that. So, viewers of West Wing may be going, “I know that story! I know Mollie Orshansky.”
But David, going to you next, if the middle of the 20th century and a measure that had to do with basically three times a household food budget—which itself isn’t even really something that was tied all that much to reality at the time, let alone now—if that’s where the official poverty measure that we’re still using 50, 60 years later came from, I mean, it does sort of defy belief that it’s still in place and that that is still what we’re using to measure poverty in the U.S. But bring us to present day. Why have you and many others been arguing that the OPM is a deeply flawed measure? And specifically, here we are hearing that it’s old. Here we are hearing that, as Shailly started to get into and we’ll get into more, doesn’t really actually reflect who is struggling. But what are its main limitations and drawbacks as we see it in practice today?
BRADY: Yeah. I mean, its number one major limitation is just that it’s way too low. It’s that simple. Is that everybody agrees you’re certainly still poor if you have $26-27,000 as a family of four. That there’s no reason a threshold of $26,000 meaningfully distinguishes poor from non-poor, and any reasonable estimate of what it takes to make ends meet pushes that number higher. So, that’s the easiest and simplest problem.
If I could add, too, Rebecca, one thing I always think that’s funny about it is Mollie Orshansky came up with this measure as sort of like an internal rule of thumb for her own analyses. She never intended it to be public policy. And there’s this wonderful book, Poverty Knowledge, by Alice O’Connor that explains the Johnson administration just kind of took it ‘cause it was sitting on the shelf. But then—and everyone forgets this part—they shifted from what Orshansky used, which was called a low-cost food budget. And that was what they thought a family needed to sort of feed itself. And Shawn has written about, it assumed all these things, like an incredibly thrifty shopper. But the Johnson administration shifted to what they called the economy food plan, which was 25 percent lower and was only meant for emergencies and on a temporary basis. So, even at the time, it was an absurd measure.
And we keep it because changing it would require admitting that poverty is much worse than we thought. And so, that’s why we keep it, is because it would reveal how bad the problem is. And understandably, no administration wants to be the one to do that. So, the bottom line is it’s just way too low. And like Shawn said, also the definition of income that it uses is basically just silly. It’s just ridiculous. It misses all this important stuff, and it doesn’t comprehensively measure what families actually have as disposable income.
VALLAS: And we’ll get lots into what it is that you have actually proposed as an alternative, something Shawn mentioned before known as a relative poverty measure. And we’re gonna get into that in just a moment.
But Shawn, you referenced before that if you actually look at public opinion research, including from conservative think tanks like the American Enterprise Institute who you named, you actually see that, you know, don’t just ask you guys or me, right, or all of us lefties, right? If you ask the American people, even as conservative think tanks, and you get the answer that the poverty line is too damn low. Talk a little bit about what public opinion research tells us about what voters say when they’re asked where they think the poverty line should be or even where they think it is.
FREMSTAD: Right. So, we don’t do this. This research isn’t done enough, but we have enough from, probably it’s about five or six years old now, but we have enough, I think, to tell us something. So, if you look at surveys generally, and these are things like the Gallup poll, for instance, asking what’s the minimum out of income? So, in 2013, which was a long time ago, the smallest amount that the public thought is necessary to get by, kind of a minimum income in that Gallup poll, was $58,000 for a family of two adults, two children. That same year, the public thought the government actually set the poverty line at about $30,000 for a family of four. Now those numbers compare what was the actual poverty line that year, the quote-unquote “official one.” It was about $23,000 for a family of four. So, just this huge difference in what the public thinks, both where it actually is and what they think is really needed. Where they actually think it is is higher than what it what it is, and then what they actually think is needed in terms of income is just a lot higher than what is needed.
And so, I think part of what you find when you look over time is the public is updating its notions, and I think a lot of this is about change. In 1962 or whatever, the assumption was you lived on a farm, or you were a male breadwinner with a stay-at-home wife who literally cooked all the meals from scratch. And this is like, Mollie Orshansky was very specific about that: We’re assuming this as the standards. And things are very different today. They didn’t have computers. They didn’t have, you know, also, a long list of basic goods and services. You didn’t have households where both parents are working and needed childcare. Health insurance wasn’t even considered a kind of basic standard needs.
So, I think the other interesting thing about this is I think our understanding of what kids need has changed a lot over time, and this doesn’t get talked about. But there’s a very, you know, when you look back at the understanding of poverty back in the ‘60s, it was very minimalist and kind of hard scrabble, and kids didn’t really need anything except dirt, and some very basic things in terms of development. And I think we have a much different understanding of kids’ development these days, and we understand that if you wanna have mobility, security, opportunity, they need more than just food and a roof over their head.
VALLAS: And Shailly, I’m gonna turn to you next because you were talking a little bit earlier, and you started to preview some of this before, about how much more widespread poverty is than it appears to be from headline statistics like the official poverty measure, that 11 percent of the nation living in poverty compared with, say, 40 percent of the country struggling to afford food and housing and healthcare and other basics, as you started to note. From the perspective of the Poor People’s Campaign, how do you all measure poverty? And I believe that you use sort of your own clever improvement upon some of what we’ve been talking about. But talk a little bit about how you guys measure poverty absent a better federal statistic.
GUPTA BARNES: Sure. So, how we’ve been accounting for the kind of wider and broader conditions that poverty and economic security is to take the SPM, the supplemental poverty measure, threshold and double it, see who’s living under twice that threshold. And a few years ago, or even based on the numbers that Shawn was saying earlier, if that’s around $26,000 for a family with two adults and two children, or maybe a little bit higher, we’re looking at under $60,000 for a family of two adults and two children for last year. And so, when you look at that, you’re looking at approximately 140 million people—based on 2018-2019 data—140 million people or 40 percent of the country that falls, again, under twice that poverty threshold for the SPM.
And I mean, this is not wildly different than earlier measures or other measures that looked at, say, how many people could afford a $400 emergency. Again, you’re looking at about 40 percent of the country that could not do that. And so, it’s not all that different from what ALICE might say or some of these other indicators, these other metrics. And I think to put that in perspective, I mean, it’s just it’s very hard to say at that point that this is a marginal issue facing just a few people or a few different communities or even a few different regions of the country. This is widespread across the entire country, in every state, across race, across age, across whatever gender or sexual orientation. And it opens up a much different conversation about how we’re taking care of people and how the abundance and productivity and wealth that exists alongside this widespread insecurity can, you know, how we’re using that, how we’re using that in this country and what policies and programs and what our priorities are. And so, I think it just opens up a very different conversation when we see that the true extent of who just is not able to meet our needs today.
VALLAS: So, there are lots of other measures out there that can shed additional light on what you’re talking about here, Shailly, the much broader, much more widespread crisis of just rampant economic insecurity here in the U.S., which we should note long predated the pandemic, right? This is not us talking about something caused by the pandemic; this is a crisis heading into the pandemic that we already had here in the U.S. Some of those measures explicitly look at the cost of living: what it takes to afford certain basic types of expenses like rent and food and other types of things that we all need to survive. Some of the measures out there actually define poverty on the basis of whether a family is able to meet a set of certain types of basic needs through survey research.
Shawn, talk a little bit about some of these alternative approaches. Some of them come to us from, say, the Economic Policy Institute. Some of them come to us from the United Way. There’s a range of them. But what other measures do you think out there are worth naming before we start to talk about relative poverty in greater depth? And what do some of these other types of measures tell us about the picture that Shailly is painting?
FREMSTAD: I wanna put it in a little bit of historical context ‘cause there’s a long history in the U.S. of doing what are often called basic worker budgets or city family budgets where essentially—and this was the Department of Labor that often did these throughout the 20th century—it goes back to doing it with mine workers and mill workers and saying, here’s what people were getting paid. Here’s what they need to have a particular, to live at a particular level. And even as the official poverty measure was being developed in the ‘60s, the Department of Labor was still putting these out. And I think it’s kind of interesting that these budgets that the Department of Labor put out were significantly higher than the poverty line. And the poverty line, I think, in many ways, and there was some opposition even to the idea of a poverty line ‘cause people were worried it would be used for the kind of thing Shailly mentioned, like holding wage rates down and telling people they didn’t need a union.
But so, what groups like— And these got lost actually, like when Nixon made the official poverty measure the official poverty measure by executive order. At the same time, he stopped supporting the Labor Department doing these family budgets. Reagan actually zeroed out the money to do basic family budgets, so it got picked up by civil society organizations like Economic Policy Institute, like the Self-Sufficiency Project. And so, they kind of kept up that tradition of doing these budgets that try to map out what things cost. How does it differ by place? If both parents are working, what does childcare cost? What does health insurance cost?
I think the problem is, they do a great job, but I think it’s a problem not having the federal government put those kind of budgets out. We really should be, you know, you should have the Labor Department or whoever saying, “This is what we think workers need.” And it doesn’t have to just be workers too. It kind of depends on assumptions about things like childcare. So, I think that’s a big difference. And it would be good to have, ultimately what you wanna have is not just a single measure that’s kind of minimalist and pulls everything down, but you want a few measures that give you more of a sense of what people really need to survive and include things like, you know, aren’t just limited to the basics of the basics.
One other thing I would say on this, I think there is something—I don’t wanna go off on this, but—I think there’s something about race going on in this shift to a minimalist poverty line and away from this kind of idea of a more decent budget. And I think there’s also something about neoliberalism kind of coming in and saying, really kind of not wanting something that empowers workers. So, over time, a lot of what you saw with the poverty line, it became this thing to separate, again, as Shailly said, the good from the bad. And the assumption, you know, it’s set so low that most people can be over it through work, but it doesn’t take any of the costs of work and other things that workers deserve, that all people deserve, into account.
VALLAS: And that’s also something that’s well worth getting into in terms of the why does this matter and what’s kind of underpinning a lot of this debate? But Shailly, you mentioned something before—and this is the last thing I wanna say before we get into the relative poverty measure piece of this conversation, which is really important—which you referenced before that the poverty measure, the OPM, official poverty measure isn’t just used for tracking poverty over time. It’s also what actually determines—and Shawn, you made this point too—eligibility for certain types of benefits and public programs. And Shailly, you also made the point that it has a lot to do with shaping the public narrative around how common poverty really is in the richest nation on Earth.
Shailly, a theme that Reverend Barber and Reverend Theoharis, the co-chairs of the Poor People’s Campaign, often invoke is the notion of policy violence: that poverty is policy violence. Is it fair to say that by defining poverty down as we have over the decades—to borrow Shawn’s phrase and actually part of the title of his report that I mentioned before—is it fair to say that the current official poverty measure is actually doing policy violence by erasing millions of struggling families from our statistics, and theoretically, from public policy choices like being eligible for critical basic needs supports?
GUPTA BARNES: I think absolutely, it’s doing— It is kind of at the foundation, in many ways, of this wide-ranging policy violence. Which, if we think about how the economy has changed over the past 40 years, so much of that is hinged on what kind of work is available to whom and how regularly. And then thinking about the welfare government programs that are necessary to kind of fill in the gaps when work and income cannot.
And so, I mean, I just I wanted to share. I was with a delegation of poor and low-wage workers yesterday, eight women, all women, from around the country, and they were talking about—these are all women who are responsible for several family members in their households—and because of how low the poverty line is, their struggles are just not visible. So, they’re working two and three jobs, digging through their couches to count out the change they’re gonna find and still, as one of them said, having to rob Peter to pay Paul when it comes down to their bills at the end of the month because they can’t afford to pay all of their bills. And so, moving from house to house because of evictions, acquiring mountains of housing debt, medical debt, utilities debt, having their water shut off, debts from family separations or the welfare system and incarceration. It’s just living on the edge every month and being forced into all different kinds of exploitation. Several parents, all they wanted really was to spend more time with their children, and none of them wanted their kids to have to go through what they go through.
And they say all this because these are the lives of tens of millions of people whose daily conditions resonate with each other, right? I mean, when you hear one of these stories, it travels across time and geography and race and all of these things, and people see themselves in these stories. They hear their daily lives being reflected in each other. But when none of that is part of our conversation, then it just, again, reverts back to that individual having to overcome all of these different challenges on their own with the meager opportunities that are available and the paltry government programs that exist. And the narrative damage that that does by absolving society, by absolving our government, by absolving our economy of any responsibility for these conditions, just that’s one that cannot be measured. And whereas the poverty line should be really a commitment to a decent life, the kind of a commitment our society will make to what a decent life to be. And so, just so much, as you said, policy violence is being waged through this weapon, I would say.
VALLAS: So, David, I’ve promised that we were gonna get to a conversation about the relative poverty measure, and we’re finally there. And this has actually been a big part of your research, a big part of your policy research. I mentioned up top that you recently authored a report as part of a Century Foundation series of papers on poverty measurement. That report was called American Poverty Should Be Measured Relative to the Prevailing Standards of Our Time, probably a title that sounds fairly non-controversial to most people listening. And you and Shawn and I actually recently participated in an event that was a discussion of that paper.
In the paper, you argue that we should move—we, the U.S. should move—to what’s known as a relative measure of poverty instead of an absolute measure like the one that we use currently, the OPM. Shawn has referenced that he also is a fan of the idea of measuring poverty in a relative way. But talk a little bit about the difference between these types of measures (absolute, relative) how relative poverty measures actually work, and why you argue that the U.S. should join most other developed nations in making that shift.
BRADY: Sure. Yeah. I mean, first, like you said, Rebecca, relative measures are the overwhelming standard internationally. And so, that’s by far the way we measure poverty in the actual poverty research literature. And the idea is very, very simple. It just says that poverty means you don’t have enough resources to meet your needs, okay? That’s all it is. And let’s not confuse the issue. And then when we have to think about what are needs, we say, well, needs are defined according to the prevailing standards of the here and now. So, what is it that a typical family needs? And if you just don’t have enough resources to meet those needs, you’re poor. And the typical way we measure this is just to say, what is the median income, adjusting for household size and totally comprehensive measures of income? And then say, if you have less than half of that, we’ll call you poor. So, it’s just a honest, transparent way to acknowledge that our threshold of what a family needs should change as the prevailing standards of that society change.
And to echo some of the things that Shailly and Shawn said, there’s really strong evidence that we’re misclassifying millions of people as not poor because the threshold’s too low. If you use a relative measure, for example, you’re looking at, in most recent years, somewhere between 50 and 60 million poor people. 50 to 60 million poor people. And think about how much larger that population is than so many other social problems we pay attention to. So, we pay a lot of attention, understandably, to things like mass incarceration, eviction. But those numbers are tiny compared to the 50 to 60 million poor people there are in America.
And to Shawn’s point, if we used a relative measure, we’ve shown in a recent paper that’s authored by Regina Baker and colleagues, we showed that millions more Black and Latino Americans would be poor. Millions. And so, we’re misclassifying millions of people and calling them not poor, whereas a relative measure would call them poor.
And then I do wanna say that people like to say that the new supplemental poverty measure is a quasi-relative measure, but this is kind of silly. It’s a relative measure. That’s all it is. It’s just measured relative to consumption expenditures. But it’s definitely still a relative measure. And then I could say more, but I would add, if you want, Rebecca, I’d make a couple other points for a relative measure if there’s time.
VALLAS: Oh, absolutely, no. And I think it’s such an important—
BRADY: Okay, okay. And you can edit.
VALLAS: No, [laughs] no. It’s such an important part of this conversation, and I think it’s arguably one of the types of poverty measures that is talked least about and that folks are least familiar with. So, no, I think it’s definitely worth going into some greater depth there.
BRADY: Well, and one of the ways to think about it is like, if we were to take a step back and say, “What do we think poverty means conceptually? Like, let’s just have a conversation about what it means to be poor,” we would use measures, concepts like social exclusion. Or there’s a famous concept by Amartya Sen, capability deprivation. And if we really just had a genuine, honest conversation, both with academics but also with just everyday people, about what it means to be poor, we would end up with a relative measure. It better fits these sort of common and theoretical definitions of poverty.
And then the best reason I think that a relative measure matters is because it better predicts health and well-being. So, if we have a good measure of poverty, it should differentiate between those that have enough to meet their needs and those that don’t, right? We should be able to distinguish between those that are meeting their needs and those that are not. And one of the ways this should show up is that if you have bad health and bad well-being, which of these measures best predicts bad health and bad well-being? And the evidence is actually fairly convincing that relative measures better predict health and well-being.
And it’s really amazing when you see conservatives push for a more conservative measure or a lower threshold, they never do objective tests of what predicts health and well-being. They don’t wanna do that. And I’ve long said that I have an open invitation to do an open science collaboration with any conservatives. I’ve had this invitation on the table. And let’s test this together, collaboratively. And they don’t wanna do that because I think they know their measures would perform poorly. So, we should just have open science, a test of what best predicts health and well-being. And dollars to donuts, I’m gonna bet that it’s gonna be a relative measure.
VALLAS: So, we’d be remiss in a conversation about measuring poverty if we didn’t get in a little bit of a dig at some of what not to do, i.e., the various approaches that conservative, shall we call them, scholars, policymakers have taken at different points to obscuring poverty in the U.S., even more dramatically in some cases than the official poverty measure already does. One particularly nefarious example that seems never to go away somehow is, of course, Robert Rector’s famous trope, he of the Heritage Foundation, his famous trope about how you can’t be poor if you have a refrigerator or any other basic household appliance. But there’s been a lot of sleight of hand over the years that’s maybe a little bit murkier and harder to dig through by conservatives, who, much like with climate change denial, have, in some ways, become modern-day poverty deniers. And Shawn, I’m gonna ask you to talk a little bit about what some of those efforts are that folks should be on the lookout for. Some of them masquerade as so-called consumption measures of poverty, i.e., looking at what people buy versus what income they actually have. What do we need to know about how not to measure poverty?
FREMSTAD: Well, so, I think the single biggest conservative kind of gimmick is that they make all these— So, the official poverty line, for instance, as I mentioned, has been adjusted and only adjusted for inflation over the last 50-some years. And so, the big conservative argument is, well, inflation was overestimated, and we need to do all these downward adjustments to really see. And the basic thing you see when you do this, right, I mean, they’ll talk about it. They’ll give you the, “If you do this, nobody’s poor.” But they never really are very transparent about what their poverty line is that they end up using. And it ends up being just absurd, right? The last time I looked at this, one of the papers ended up with the poverty line for a family of four that was something like $13,000, which nobody, if you just started out with that proposition, oh, really? A family only needs $13,000, a family of four, to live in the United States in 2021, people would just laugh in your face. And so, it’s much more this sort of very technical looking kind of set of manipulations.
And I think increasingly, there’s some acknowledgment that they’ve sort of, some of the smarter ones have honed their message to say, “Well, okay, we should come up with a different measure. But if we wanna kind of track poverty consistently from the 1960s, we have to do it our way.” And I think this is just wrong ‘cause you really can’t. At some point you just got to stop and say, we need to understand what poverty means in the here and now and not what it means if we could get in a time machine with our money, go back, and live in 1960s. Or you could do the same thing with the poverty line that was set in 1902. And at some point, they just become irrelevant. And I think with the relative measures David is talking about, that keeps pace sort of automatically, and there’s different ways to do it. Maybe you want it adjusted only for inflation for ten years or so and then do the upgrade. But, again, I think it gets much more at kind of the reality in the era now.
The other thing I’ll say is, I think we need to do a better job, anti-poverty advocates, of not just going to the hardest, not talking about, say, poverty as just being hunger, going hungry and not having a roof over your head. I mean, it’s really more than that. I think I will say this. In 2021, I think it strikes me that if you wanna have a basic, decent life, having a pet is part of that, if that’s your thing, right? Having money to do social activities, cultural activities, that’s part of that. And again, I think the other kinds of measures that David and Shailly were talking about, they acknowledge that it’s part of a decent, full, flourishing human life, that there’s a social aspect to it, and it’s not just having a roof over your head. And I think we need to do better. It’s hard ‘cause you wanna go to the most extreme cases, but I mean, people are more than just this bundle of the most absolute needs.
VALLAS: So, let’s take the last maybe 15 minutes or so that we have here and get into kind of why all of this matters so much. And Shailly, you really started to go there before, and Shawn, you did a little bit as well, why it matters how we measure poverty. But Shailly, bringing you back in, what are the consequences right now of letting the official poverty measure stand? You have called, Shawn has called, David, but also many others who are not part of this conversation right now, have increasingly started to call for abolishing the official poverty measure, for finally creating a path to moving beyond it. But as we talk about what that road might start to look like—and David, you mentioned no administration has wanted to be the one to say, “Actually, poverty’s dramatically higher than we thought on their watch,” right? So, not gonna say that this is the most likely thing to happen tomorrow under the Biden administration or any president—but what are the consequences of letting the official poverty measure continue to stand in its current form?
GUPTA BARNES: So, in the absence of a better measure, what happens is that poverty more broadly is criminalized, it’s psychologized, it’s pathologized: Poor people are lazy and crazy and generally blamed for their poverty. And it seems dramatic to put all of that on a poverty measure. But as we’ve been talking about, it becomes a justification for all of this and then more. And so, I think in some ways, what David and Shawn have been talking about is redefining poverty, really, in a time of plenty.
As we saw during the pandemic, we’re living in a time when trillions of dollars can be made and gained and held right now by a very few. But it shows that there are plenty of resources and abundance of wealth to be marshaled towards whatever it is that we as a society determine are our priorities. And one way to look at this is to say that by keeping this poverty line so low, we’re actually able to justify this wide expanse of income and wealth inequality. And that’s something that affects more people than whether it’s the people living below whatever poverty threshold or the 140 million. That affects, 95, 98, 99 percent of the country and more.
And so, I think, again, I think we have to look at a relative measure, but also just what the conditions are right now. And if we do, if we are actually living in an era of abundance, well then, we need to redefine poverty, what that looks like, the increased costs of living in an era of abundance alongside an era of deep inequality. And that’s a very different world than whenever this poverty measure was established. Yeah. So, I mean, I might just pass it off, but that’s one thing that comes to mind as to how is this measure actually justifying the great inequality that we’re living in? And to some degree, isn’t that part of this charge as well, to redefine poverty in a time of plenty and to strive for a society that makes sure that everybody, everybody is able to live a decent human life, and that’s where that line is built?
VALLAS: I think that’s such an important point, right? And something we return to often on this show is that poverty is a political choice. Poverty is a policy choice. That is also something that we hear as a resounding theme throughout the Poor People’s Campaign’s work over the years. And I think you’re exactly right, that by defining poverty down, by obscuring how widespread economic insecurity really is, we’re effectively making it easier to continue to make that political choice.
Shawn and David, what is the way forward here? You each have made recommendations for policymakers, including in those reports that I mentioned before, chief among them being abolish the official poverty measure, right? But as I think you’ve all pointed out at this point in the conversation, it’s easier said than done in some ways. And even if we have an idea of what we might want to move to, such as a well-designed relative poverty measure, what does the road ahead look like to actually being able to do that, given that it would take some time likely to develop it? So, I guess all that is a long way of saying, what is your wish list for the Biden administration if we were to see them take action to finally lay the incredibly flawed and outdated, and I think now we’ve heard, violent from a policy perspective, OPM to rest? And David, I’ll go to you first with that one.
BRADY: Yes. I mean, one thing that’s really important is a lot of social policies are tied to it. And I think one of the most visible examples was the expansion of Medicaid under Obamacare said you can give Medicaid to people up to 150 percent of the OPM, of the official poverty measure. And so, it would be wonderful if we could break the policy ties to eligibility to certain programs based on the OPM. That would be a very, very smart move. And Shawn would have to answer the question, I’m not sure, but Shawn would have to answer the question of exactly what would need to be done legislatively to allow that to happen.
But beyond that, I would say that scientists and advocates should just always reject it. We should just refuse to use it, refuse to accept it. And for example, the National Science Foundation should not fund research that relies on the OPM because the OPM is an absurd measure. You wouldn’t do that if you were doing like, I don’t know, climate science like Rebecca likes to say. You wouldn’t tolerate a politically defined measure that doesn’t have any scientific basis.
And then finally, if you’re a journalist that actually cares about poverty, you should never report the OPM. You should just obfuscate that it exists and just say, “That’s not a real measure” and use the SPM or at least a relative measure. So, I think we could enforce, those of us that care about poverty, enforce a party line where we say, “Look, this is just absurd, and that’s no longer acceptable. We will not fund scientific research on it. Journalists shouldn’t talk about it. Advocates should never talk about it.” So, when we’re asked about it, we should just say, “It’s absurd, and we shouldn’t be using it.”
VALLAS: I think that I’m hearing you say it’s time to cancel the OPM. The OPM needs to be canceled.
BRADY: [laughs] Definitely cancel.
VALLAS: And Shawn—
FREMSTAD: Cancel the OPM—
VALLAS: Yeah. Please pick it up there, Shawn, because I think David’s really part of—
FREMSTAD: I would say—
VALLAS: Yeah, go ahead.
FREMSTAD: Yeah, cancel the OPM. And literally, I mean, you can’t do it overnight in terms of the program-tied stuff, right? ‘Cause that needs congressional action, but or, well, I mean, there’s— I don’t wanna get into the technical debates about this, but the administration right now, the Biden administration, could say, “We acknowledge that the official poverty measure is outdated. It’s not useful as a statistical measure, as something that Census should be putting out data on.” And they could just, you know, they could literally, and they should literally, stop publishing that annual data. It confuses the public. It leads to this perception that we’re doing, you know, I won’t go on about it, but I think they literally should just stop using it. And you can kind of keep, you know, until we kind of figure out all the ins and outs of the other programs, that’s one thing.
I think with the SPM, you got to improve it. There’s efforts right now. The National Academy of Sciences is looking at improving it, making modifications that I think are useful. Although I think they still aren’t really taking the problem with the threshold being too low seriously. The other thing the Census Bureau should start doing is reporting every year right alongside its other, when it reports on poverty measures, it should be reporting using a relative poverty measure. We already do this. We send data to international organizations like the OECD, but we don’t publish it here in the United States. It’s kind of like, and I feel like it makes this, you know, I think there’s this attempt to kind of retain American exceptionalism because we look so bad when you use a relative measure compared to the other countries.
I think the other thing you could do is, Department of Labor or somebody like that could do the kind of budget, you know, what do these necessities cost? The kind of thing Shailly’s talking about where you cost out things and you say, this is what it takes in X City, in X state to have not just a poverty kind of living standard, but a decent and a modest but decent living standard the way they used to do when they used to do this in the ‘60s and earlier. So, it’s not something new for them.
VALLAS: And one of the pieces of the conversation that almost never really happens, but which I know, Shailly, you will have plenty to say about is who should be consulted if we’re going to embark upon designing a better poverty measure? And folks in the ivory tower, public policy professionals, those are generally the types of people who end up in the rooms where these kinds of conversations happen, but people who themselves have lived experience of poverty, of economic insecurity, of inequality are almost never actually talked to, surely, for the development of official measures like the official poverty measure, maybe for some of these types of workarounds that folks have developed and alternative measures that folks have developed from the non-governmental organizations and others who are trying to step into the breach. Talk a little bit about, if you would, what you see as the case for breaking with that tradition and that sort of tired mold of who’s in the room, who’s at the table when it comes to designing something as important and fundamental to a society as how we define and measure poverty.
GUPTA BARNES: Yeah, I mean, the fact of the matter is that human lives, human potential are all on the line and that reality can really get lost when this becomes a numbers game. And so, to narrow this down to kind of a technical or bureaucratic process, which obviously, there has to be some degree of that, but to have that be the extent of what determines what this line and measure ought to be, does just millions of people a disservice and perpetuates these narratives that we really can’t just withstand any longer. Generations have suffered through this. It’s time to just end that.
And while the Poor People’s Campaign, we don’t have any kind of allegiance to the SPM or twice the SPM or whatever. But we do have, the way we arrived at that idea, the way we arrived at that calculation was by meeting with people across the country, hearing what their conditions were, and then seeing what could possibly capture that reality.
GUPTA BARNES: You know, it has to be directly informed. There has to be observations that then determine what the measures, there has to be that kind of method to it, that kind of scientific method that looks at the reality and then decides, then determines how that reality should be interpreted as opposed to working from something that you wanna just look at a segment of what reality is. And so, I think we have to not only be pulling in cross sections of people who are impacted by poverty every day and have been for years and decades and generations, but very deliberately engaging people in a process of telling these stories. So, that’s the only way we’ll be able to see the extent of that reality, putting these stories side by side.
And once, I mean, in our experience, at least, once we start telling these stories, the floodgates open. And all of a sudden, we have this massive amount of information with which then to interpret what’s going on right now. And that is, if we are serious about addressing poverty, if we’re serious about realizing the kind of society that we know is possible, then we have to go through this. We have to engage with reality as it is and the people who are living through it. And they have to be not just brought in at the last moment to justify results, but at the very center. The 140 million poor and low-income people in the country have to be at the very center of this discussion, and the research has to be built up around that.
VALLAS: I’m struck—
FREMSTAD: And I—
VALLAS: Please, Shawn, go ahead.
FREMSTAD: Oh, sorry. I didn’t wanna interrupt, but just the thought came on. And I think some of you know about this. There was a event on poverty measurement at the Brookings Institution in Washington, D.C., a few weeks ago, and there was something like 11 speakers at that event.
BRADY: 14. [laughs]
FREMSTAD: Oh, 14? I think all of them were either academics or right-wing think tank people. There was maybe two or three women. I think there were no people of color. Am I getting it right?
BRADY: Zero. Zero.
FREMSTAD: It was an extraordinarily, and obviously, nobody from a kind of, talking from a perspective of lived experiences. And really, the discussion wasn’t even really about poverty. It was about all these minute things and stuff like, it was a— Anyway, I won’t go off on that, but I think one of the important things I think I would really concretely, it would be great to see big foundations, whether Ford, Rockefeller, these kind of foundations kind of fund efforts to involve low-income people. And I think it should be people actually from across the income distribution to get a better feel for what it means, for what they think it means to be poor.
In the United Kingdom, the Joseph Rowntree Foundation has been doing this for years, where they develop a community-informed minimum income standard, where they get people together. They talk about it, they figure, and it’s a really fascinating process where people are updating over time what they think is necessary. Ten years ago, it didn’t include cell phones. It includes cell phones now. It includes things like entertainment and time out. And I think it just is a much more informed kind of thing. But doing that kind of stuff takes money, and a lot of groups, especially groups working with low-income communities, don’t have it to do that kind of thing. So, it really would be good for major foundations to kind of take another look, not assume that just because we have the supplemental poverty measure, the poverty measurement case is closed, and we can move on to the next thing.
GUPTA BARNES: Yeah. One of the mechanisms that we’ve used in the past in the Poor People’s Campaign to kind of create the space for these stories and testimonies to emerge was the form of a truth commission, and actually very deliberately constructed a space where it was open and welcoming and non-judgmental and just created the space for a truth commission on poverty, a truth commission on poverty in the midst of plenty. And so, I think there is so much need for this kind of creative and— There’s no way we’re gonna be able to address the scourge of poverty and economic insecurity unless we take a hard look at what’s happening. And the only way that can, the only legitimate way for that to happen is for the people most impacted to be central agents in that.
VALLAS: And I was gonna say before, I’m struck that every time we talk about something like the American Rescue Plan Act or some of its key policies—some of which are now being debated in the context of should they be extended and for how long in the quote-unquote “build back better” debate that’s playing out on Capitol Hill right now—but I’m struck pretty much every time someone talks about the child allowance, we’re reminded it’s a policy that’s estimated to cut child poverty in half, which is a wonderful, historic thing. But it’s also, by what measure are we trumpeting that as a success, right? So, this is a conversation, and this is a problem that really is a through line that runs throughout the broader national debate around poverty, around economic security, right? Because the goalposts that we set are going to be based on how we measure and define poverty. And that’s before we even get to a place where we’re talking about public policy decisions that are intended to reduce it. And then David, I think you were about to say something, and you’re gonna get the last word.
BRADY: Yeah. That’s great. Thank you very much, Rebecca. So, the conservatives often will say our definition of resources is too narrow because the OPM ignores all these benefits, right? And we say the definition of needs is too low. So, we’re always arguing for a higher threshold, and I think we’re very justified to do so. But I would embrace the conservative critique that we should define resources more broadly. That’s fine.
BRADY: And maybe one way to build a political coalition for abolishing the OPM is to get the Biden administration to realize that the child benefit doesn’t count as a resource with the OPM. It’s just not counted. It’s ignored because it’s a tax credit, right? And the OPM doesn’t count tax credit. So, the EITC, the Child Tax Credit, they’re just ignored. So, one of the ways to really think about how silly and problematic the OPM is, is that it ignores the social policies that actually help the poor people. So, it ignores SNAP, it ignores the EITC, it ignores the CTC. And maybe we can convince the Biden administration that we are underappreciating how effective their social policies are by not counting those things as resources that do help the poor. And in the process of expanding the resource definition, well, let’s update the threshold definition, the needs definition as well.
VALLAS: Well, I look forward to having all of you back at some point to talk about the ongoing work to update the poverty measure and the Biden administration’s future commitments that they will make after listening to this episode to heed all of your advice. That’s me throwing some good energy out into the universe there. But I appreciate all of you so much for taking the time to come on the show to break all of this down, to translate all of it into English. We got lots in our show notes this week where folks can read more about relative poverty measures, as well as why the official poverty measure is so frickin’ broken and unfixable. So, we’ve got the report from David, American Poverty Should Be Measured Relative to the Prevailing Standards of Our Time, in show notes, as well as Shawn’s report, The Defining Down of Economic Deprivation: Why We Need to Reset the Poverty Line. We’ve also got lots of stuff from the Poor People’s Campaign and more in there as well. So, take a look at the show notes if you’re looking to dig into this more. But David, Shailly, Shawn, thank you so much for taking the time and for all of your work to raise the visibility of this issue, which often gets really pretty swept under the rug.
GUPTA BARNES: Thank you.
BRADY: Thank you.
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VALLAS: And that does it for this week’s show. Off-Kilter is powered by The Century Foundation and produced by We Act Radio, with a special shoutout to executive producer Troy Miller and his merry band of farm animals, and the indefatigable Abby Grimshaw. Transcripts, which help us make the show accessible, are courtesy of Cheryl Green and her fabulous feline coworker. Find us every week on Apple podcasts, Spotify, or wherever you get your pods. And if you like what we do here at Off-Kilter Enterprises, send us some love by hitting that subscribe button and rating and reviewing the show on Apple Podcasts to help other folks find the pod. Thanks again for listening and see you next week.