Why is the Federal Poverty Line So Far Off?

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Census data released this week show that after yet another year of anemic “recovery,” the number of Americans living in poverty last year remained stubbornly unchanged.

But what is “poverty” as measured by the federal government? Experts argue that the official measure is outdated, and doesn’t take important economic realities into account. Are those with incomes slightly above the poverty threshhold not “poor people,” as most of us would understand it?

In 1999, a single mother struggling with this question sent an email to the Health and Human Services employee whose job it was to calculate the federal poverty line. She wrote:

I am a single Mother and work two jobs which equal about $18,000 per year. We barely afford rent, electric, cable, phone, water, food, taxes and vehicle expenses. [But] the federal poverty level is $11,060. My daughter and I have zero, no, zilch money left after paying the bills for medical or clothing. How on earth does the Federal Government expect us to pay for cars….There just is NOT enough money left at the end of the month for a car payment….Please tell me…how they expect people to live on under $20,000 per year.

The poverty line in the email, $11,060, was the federal poverty guideline in 1999 for a family of two. Today, that figure is $15,510 — still less than what the woman was struggling to get by at the time.

That raises a crucial question: why is the federal poverty cutoff so far off?

Origins of the poverty measure

From the early 1980s until last September, the Health and Human Services employee responsible for responding to that frustrated mother and others like her was Gordon M. Fisher. Fisher worked in the Office of the Assistant Secretary for Planning and Evaluation, where his job was to calculate the poverty guidelines — commonly referred to as the “poverty line,” used to determine benefit program eligibility — and to answer questions from the public.

Laura Fritz, 27, fills out a form at the Jefferson Action Center, an assistance center in the Denver suburb of Lakewood. Fritz grew up in the Denver suburbs in a solidly middle class family, but she and her boyfriend, who has struggled to find work, are now relying on government assistance to cover food and $650 rent for their family. (AP Photo/Kristen Wyatt)

“I was a civil servant, not a policymaker. I had to describe the policy — the level of the poverty line — that existed,” Fisher told Moyers & Company. “Although the people wanted that policy changed, I, as a civil servant, did not have authority to change it. At the same time, since they were members of the public, and I was a public servant, I wanted to respond to them with respect. There was not necessarily a good answer to their questions.”

When people called or — later in his career — emailed Fisher saying they were earning wages equal to the poverty line, or more, and still couldn’t get by, he “dealt with it very carefully,” he says. “When something like that becomes official policy, it can become difficult to change. When the people said, ‘I’m making more than that and I still can’t make ends meet,’ sometimes the only thing that I could say was ‘I can’t disagree with you, sir.’ or ‘I can’t disagree with you, ma’am.’”

Looking to more fully answer the questions put to him, Fisher went back to take a look at where the guidelines came from to begin with. “I found that there wasn’t a single good, detailed source on how the poverty thresholds were developed,” he says. So he took it upon himself to document it. “I made that sort of my second job in addition to my day job of putting out the poverty guidelines,” he said. Fisher became known by colleagues as the “unofficial” historian of America’s poverty measures.

The answer took him back to the mid-1960s, when Mollie Orshansky, a civil servant working for the Social Security Administration, needed to devise a way of measuring child poverty.

Orshansky herself had grown up poor, one of seven daughters born to a family of Jewish immigrants living in the South Bronx. She remembered waiting in food lines with her mother and how her family would decide to forgo important purchases in order to make the rent. In 1970, she told the New York Post, “If I write about the poor, I don’t need a good imagination — I have a good memory.”

Orshansky worked as a government clerk and civil servant most of her life, starting at New York City’s Department of Health. By 1963, Orshansky was working for the Social Security Administration — the agency that oversees many social safety net programs — and was assigned to report on “poverty as it affects children.” But her team had no good measure of what constituted poverty — so Orshansky decided to develop her own.

Mollie Orshansky in 1970. (AP Photo)

She used a 1955 Department of Agriculture report which found that families of three or more spent about one third of their after-tax income on food. So, to calculate a poverty line Orshanksy decided to multiply a low-income household’s food budget by three, figuring that if a family was tightening its belt, it would cut all expenses by about the same amount, proportionately.

For the food budget itself, Orshansky used the Department of Agriculture’s “economy food plan.” It was the cheapest of four plans developed by the Department of Agriculture, and was designed to reflect what a family living for a short period of time on a severely constrained budget might need to get by. In 1962, it allotted $18.60 a week for a family of four with two school-aged children — or $143.47 in today’s dollars. It was even less costly than two other “low cost” plans the department had developed, and, as a 1962 report explained, “relie[d] heavily on the cereals, dry beans, peas, and nuts and potato groups, and on the selection of the less expensive items in each of the 11 food groups.” It was only for “emergency use,” and not intended to constitute a family’s diet over the long-term. In a 1965 article, Orshansky said her threshold, dependent on this budget, should be used to measure when a family had “inadequate” funds, not adequate funds.

Her new standard came at a fortuitous time. The Johnson administration had declared a “war on poverty,” and public agencies needed a way to measure the extent of the problem. In 1965, the Office of Economic Opportunity adopted Orshansky’s thresholds as their poverty cut-off, and in 1969, her thresholds were made the government’s official definition of poverty.

Also in 1969, a review committee made up of representatives from many government agencies decided the thresholds would be indexed to the Consumer Price Index, not to changes in the cost of food or the share of a family’s income spent on food. Since that time, the method for calculating the poverty thresholds has changed little.

The poverty measure today

America, however, has changed quite a bit since 1969 — and has changed even more since the mid-1950s, when the USDA budget Orshansky used for her thresholds was designed.

“The fact that other basic needs have increased in cost more rapidly than food is one reason why the old poverty line is out-of-date and, in fact, is too low: It hasn’t kept up with our new necessities, it hasn’t kept up with new ideas of what our basic needs are.”
“In some ways, the poverty measure such as it is today made a lot of sense in 1965, 1966, in the late ’60s. The problem is we haven’t really updated it in a meaningful way,” says Shawn Fremstad, a senior research associate at the Center for Economic Policy Research. “We’ve updated it for inflation, but that just means you’re measuring what it means to be poor today in what are essentially early 1960s terms.”

The share of a family’s income spent on food has changed dramatically — some recent studies place the share of a family’s income spent on food as low as six or seven percent of total household expenditures. That would mean Americans today are spending roughly 1/14th of their income on food, compared with the one-third figure used to calculate the poverty guidelines.

“A lot has happened to society and to families needs,” says Arloc Sherman, a senior researcher with the Center for Budget and Policy Priorities. “Fewer people needed to drive to work — you could walk to work. People didn’t need to save the same for childcare, or for college. People could get away without having a telephone and still have a successful job search. It was just a very different world.

“The rise in families with children where all parents are working for pay is driving up the importance of paid childcare. Spending a few thousand dollars on childcare is fairly typical now. Childcare costs have risen faster than inflation. Healthcare spending is a growing part of family budgets just like it’s a growing part of the national economy.

“The fact that other basic needs have increased in cost more rapidly than food is one reason why the old poverty line is out-of-date and, in fact, is too low: It hasn’t kept up with our new necessities, it hasn’t kept up with new ideas of what our basic needs are.”

And the line doesn’t just omit key expenses — because it looks at a family’s before-tax cash income, it also ignores important sources of non-cash income for poor people such as the Supplemental Nutrition Assistance Program (SNAP, or food stamps) and the Earned Income Tax Credit (EITC). If the poverty guidelines don’t incorporate income from benefits, it’s hard to measure if these benefits programs are doing their job and lifting people out of poverty.

“This is relevant right now because there are bills moving through Congress that would cut SNAP by tens of billions of dollars over the coming decade,” says Sherman. “And if you don’t know that SNAP is helping people, you’re more likely to say it doesn’t work.”

Alternate measures

“One of the challenges is the official poverty measure is still there and it ends up dominating the debate and confusing people and getting in the way, and that’s really unfortunate.”
Organizations that address poverty day-to-day have developed several alternative methods of measuring the number of Americans living in poverty.

“I think there’s a lot of great work going on, often in nonprofits. I think one of the challenges is the official poverty measure is still there and it ends up dominating the debate and confusing people and getting in the way, and that’s really unfortunate,” says Fremstad.

Moyers and Company has recently used a different threshold for a reasonable standard of living, calculated by the nonprofit group Wider Opportunities for Women. Their Basic Economic Security Tables, or BEST index, takes into account expenses that the federal poverty line doesn’t, including housing, utilities, child care, transportation, health care, household goods, emergency and retirement savings and taxes, and recognizes that each expense is different depending on the location in question. Across America, the BEST index comes in at two to three times the poverty level — and in some cities, even more. The Economic Policy Institute has done similar research, and has a family budget calculator that you can use to find out how much it costs a family to live in every American city.

Anti-poverty advocates have also praised the U.S. Census for recently implementing a second measure of poverty, called the supplemental poverty measure, which, Sherman explains, “makes several changes. It counts those missing tax credits and non-tax benefits as income. It subtracts necessary, work-related expenses, such as childcare, and out-of-pocket medical expenses from income. It counts boyfriends, girlfriends, unmarried partners as part of the family. It adjusts the poverty line for local variations in cost of living, particularly in housing costs. And it uses a poverty line that is in other ways slightly updated from the old poverty line.” The regular measures yielded 46.2 million people living in poverty in America in 2011, but the supplemental measures yielded 49.7 million, many of them elderly.

A new measure?

Right now, many of those who study poverty are not overly hopeful that the U.S. will implement a new poverty measure in the near future. It’s a difficult topic, especially in today’s fraught political environment. Conservatives argue that the measures cover too many people, including many who are lifted out of poverty by government programs like the EITC. Liberals argue that the poverty measures don’t take expenses into account realistically.

Those who work with the U.S. poverty line often look to the U.K.’s system of measurement as an alternative model the U.S. might follow. There, federal agencies use multiple measures of poverty to create policy.

“It would be good for both the left and the right to say, ‘There is no single best way.’ And maybe we could adopt sort of a suite of measures along the U.K. line,” says Fremstad. “And some of those could be more conservative, more absolute, and some of them could be more relative, more liberal. And then we could argue about which ones are the best. But at least we’d have a few — three or four measures that were all good, that Census and the federal government put out and that narrowed the debate.”

Even before her long career researching American poverty ended with her retirement in 1982, Orshansky was unsettled to see her poverty measure become outdated, but remain as federal policy. In 1969 — the year the poverty measure was adopted nationwide and tied to inflation — she expressed skepticism about its implementation. “The best you can say for the measure is that at a time when it seemed useful, it was there,” she wrote.

John Light blogs and works on multimedia projects for Moyers & Company. Before joining the Moyers team, he worked as a public radio producer and a freelance multimedia journalist. His work has been supported by grants from The Nation Institute Investigative Fund and the Alfred I. duPont-Columbia Awards, among others. A New Jersey native, John studied history and film at Oberlin College and holds a master's degree in journalism from Columbia University. Follow John on Twitter @lighttweeting.
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  • Miranda

    I’m saddened and ashamed as I read this – how can our country be so callous?! In my view, regional differences in costs MUST be taken into account or the whole concept of measurement becomes just an irrational façade for political objectives. Costs vary widely in the US. Maybe the Gov should tell us where in the country a family can live on $16K a year and therefore “not be poor”; it should then move everyone who is currently poor to that location? Problem solved right?…

  • Becky Palmer

    I think every government official should have to live on a salary right at or below the poverty line. Let them go to food pantries. Let them deal with the agencies they are trying to destroy. I have SNAP and SSI and I am still below the poverty line, but I will not say I’m biased. Life is what it is no matter how I ended up this way. I think those to despise the “entitlement mindset” should rethink it. If those people don’t think they are entitled to live off the fat of the land, I don’t know what else you’d call it. If they had to live like the poor they are hurting, they might – i’m not entirely certain – but they might learn something resembling compassion.

  • turtlegirl

    I live well below the poverty line, and have most of my adult life, but have never been on food stamps or any kind of assistance. I just work multiple low-paying jobs even though I went to college and got a degree, clocking in 18-20 credit hours each semester while still making Dean’s List. So, I’m not lazy or stupid, just chose my profession with a mind to follow my bliss, not make a lot of money (in natural resource conservation). But when someone can afford to pay a cable/satellite bill, pay a monthly smart-phone bill, go out to eat at restaurants/fast food joints, buy junk at the store like Cheese Puffs, etc. I hardly think they are living in poverty. It’s when you can go without all those items, none of which are necessities, and STILL have trouble getting by that gets my sympathy. Having a car loan is one of the stupidest and worst things to burden yourself with when you are paying interest on something that depreciates daily. I’ve always been able to save (or borrow from a family member) a small amount of money ($1-2,000) to buy a good used car, all of which have lasted over 220,000 miles. I may be frugal and be accused of being a minimalist, but when you make $12-15,000/year, that’s how you roll.
    You DON’T buy the latest, greatest, faster gadget every time one comes on the market. You DON’T buy that big screen TV even if it’s on sale. Better yet, ditch the thing altogether like I did over 20 years ago; you won’t be missing much except that damned bill every month. You DON’T buy a car on credit, no matter what; figure out a way to pay cash. Maybe it is time to re-evaluate what poverty is in this country, but I think it’s also time to re-evaluate what we think are necessities. When I picture poverty, I picture starving, sick children with no way out of their situation. I think we’ve got it pretty good here in the USA where most people are spoiled beyond belief.

  • turtlegirl

    Exactly what I was saying in my above comment. Thank you.

  • turtlegirl

    (((HUGS))) to you, Frank. Isn’t there some sort of Veterans assistance program out there for you? Like Voc Rehab? I would think (and hope) they could help you out in training and finding work that would suit you. I wish you luck.

  • Anonymous

    and why again weren’t congressional salaries sequestered?

  • Anonymous

    some countries have guaranteed minimum income, in recognition that the higher costs to society arise through neglect, disease and death.

  • Disa

    Thank you. More and more, internet access is not optional.

  • Mactd1

    The good the bad and the ugly… It depends where you live as to how much you need. But the poverty level is based on the average of all…

  • Mactd1

    Starving sick children would be the helpless. You can’t help someone that doesn’t want the help. A honest day’s pay for a honest day’s work is what America needs. Geed drives poverty and depression. We have named it the greatest depression. This is after the GOP has told us that we are not in a depression.

  • Anonymous

    Though I admit $12-$15 thousand per year is not much, that is not “well below the poverty line” for a single adult.

    I don’t agree (if I understand you correctly) with some of what you state here but I will say that you have touched on the, consume! consume! Consume! materialistic behavior of all income levels in this country which I too am troubled by….

  • Disa

    I suppose that depends on where you live. It’s hard to find a one bedroom apartment in Seattle for less than $1000 a month. Given that, living on $12,000 per year is actually impossible without assistance. Not only would you not be buying the latest gadget–you wouldn’t be buying food, either.

  • Anonymous

    I agree…..that was part of my point and the point of the article. The measure doesn’t make sense and is often misunderstood and misused……

    This women would not as I stated be considered living in poverty at that income as a single person. But no matter how frugal one is they cannot “live” on just paying for shelter, or just paying for healthcare etc.

  • Disa

    Thanks for clarifying, Kay. :)

    I think that’s the biggest, most frustrating part of the whole thing, for me. Even if we do calculate the numbers so that they include things that are necessary in this century, if we don’t take regional economic variations into account, it still won’t help. I don’t just mean regional variations like New York versus Arkansas, either. I mean regional variations like Seattle, Washington versus Lynden, Washington–towns that are only a hundred miles apart. An income that would be survivable in a small town would leave you destitute in a big one.

  • Rae Gillette

    On the other hand, in a household without a “land line” telephone and only cell phones, sometimes the most cost effective thing is to have cable/internet/cell phone service. In the west where I love most everyone under 26 is living with non-family roommates and individual cell phones saves getting stuck with someone else’s expenses or missing important calls. Also in the west, we have zero public transportation and our cities sprawl out for miles, some kind of car is a necessity and yet if you get food stamps your maximum outlay in vehicle can only be $1000, which buys you a clunker that is 1.) a gas guzzler 2.) a bottomless pit of repair costs. By poor evaluation of guidelines, we stack the deck against the working poor, those with jobs that don’t cover even minimum cost of living. Or students in school to lift themselves out of poverty.

  • Rae Gillette

    Yes, and there are not enough jobs in the small town so many are commuting to the big town. My last job before I retired I traveled 75 miles one way to work so that I could live in a cheaper small town. Now the gasoline costs (1.98 then) would prohibit that rent savings.

  • Rae Gillette

    Not aware of where you live but the price of food is NOT down in our area. In fact a lb. of hamburger was 5.95 and just today was 7.55 so now I eat two more meals of veggies, beans and cheese per week, leaving just one day of meat per week. There are great disparities in food prices around the country.

  • Rae Gillette

    I’d guess you don’t have a wife and kids. I’d also guess that you are your own mechanic and a good one. My granddaughter is a young divorced woman with two boys 6 and 4. She doesn’t own a car, has a hand me down TV from her mom, doesn’t have cable, uses used videos for $1.99 purchase as entertainment after homework and before bed. She does have Internet and a computer because you can’t follow all the rules of college classes without those things and she can’t leave the children alone and go to the campus to get on-line at night when she does her homework 9pm -midnight. Her monthly budget last year was under $400 per month. She gets food stamps and child care assistance and has to work part time to get those. None of the excesses you mention are in her life. Her worst nightmare is a sick child because now, you have to have less than 4 absences per semester or you are out of college.

  • Rae Gillette

    And the worse news is that there are few in Washington DC who are even aware of the problem, let alone want to fix it. This is what happens when we have career politicians who are all millionaires.

  • Rae Gillette

    Of course, if you can’t help support your first family of children, why would you create a second family of children? That said, in our state the rate of child support takes second families into consideration and also the child support the second family receives, as well as has to pay. Result, a disabled mother has to supply half of what her husband was paying 100% of until he decided it would be easier to bow out than continue. Nothing in life is really done fairly no matter how complex city, state, and federal laws become. The truth is that while some people with children struggle to get rent and food, let alone health care, other families in this country have 23 or more homes and nobody in the family does any countable “work” at all. This is a fact that is festering in the minds of those who work at least one job and it is not enough.

  • Rae Gillette

    Yes, but those are enlightened, 21st century countries. The USA is not among them.

  • Anonymous

    I propose that the national minimum wage be set at 50% of national median wage. The person in the middle would make twice as much as the guy on the bottom.

  • Anonymous

    How can a single working mother NOT be on the bottom of the income curve? There GREAT economic efficiencies in having two adults in a family with kids even if one is a stay home parent.

  • Anonymous

    If I was young, single, and knew what I now know, I would find a swing shift or graveyard job and a 24 (or so) foot class C RV to live in. Why? Because it is MUCH easier to find a free sleeping/parking space during the day than after dark.

  • Anonymous

    Every person the same amount of money – no distinction – we’re all the One – spokes on the wheel of Life. All of us important. This imbalance (+greed) of the few shall kill us. Literally. I’m all for democratic socialism, and no, don’t think of the old Russia or China when you hear the word socialism or communism – let go of that. The two words symbolize just what we need: socialistic communes. All for one – one for all.

  • Leslie

    You ask why the federal poverty line is so low?
    Simple answer. The people in the government who set this level are rich!~

  • Grandma Moon

    Best to you Becky.

    Government officials living on small salaries can never be the same as real poverty, experienced over time and with no sure end in sight. Gov. officials probably have a wardrobe, household furnishings. And they know they have a nest egg or prosperous friends and family to fall back on in an emergency. They also have health care.

    Poverty means the kids wear shoes that are too small, miss school because they cannot afford to go to the laundromat, or even soap to wash clothes in the bathtub. Dental care is out of the question; missing and decayed teeth mark one as a throwaway person. Parents leave sick kids alone so they do not miss minimum wage hours at work. Even when the poor are careful and make intelligent decisions, the deprivations and humiliations cannot be known to those who play-act poverty for a week or two.

    I have been poor and now am not.

    We help people as individuals but it is just a drop in the bucket. I WANT my taxes to help those who are poor, sick, disabled. That can happen if we stop subsidizing corporations, stop starting stupid expensive wars. I want a reasonable minimum wage and reasonable measure of poverty.

  • http://tanglesandwebs.blogspot.com/ Annie Stratton

    It’s easy to blow this off with “it’s because people who set this level are rich”. But that misses the point. Unless we look at how something developed over time, as this article does (please read it before commenting), we can’t know how to approach fixing it. We don’t have an argument to present to Congress and those policy-makers who don’t get it. Don’t blame the civil servants: they get it, and they are not rich. Right now they are stuck with a 50 year old system that was outdated at implementation, and in addition has never been used as intended (someplace we don’t want people to be). Yes, the article focusses on why. The how to fix is up to the American people and their representatives in Congress. Gosh, that means you have to do something. Write letters to the editor. Call your congressional representatives. Attend rallies and demonstrations. Lift your voices. It will take a lot of mindful discussion to resolve this, as it does any issue in a democracy.

  • http://tanglesandwebs.blogspot.com/ Annie Stratton

    Thank you. I was a working single mom with no child support (my ex had emotional problems). I put myself through college so I could get a job that paid enough for me to have retirement savings. Then I became devastatingly ill, and was misdiagnosed for well over a decade, during which time, I lost everything. By the time I was diagnosed correctly and treated appropriately, it took two years to recover enough to work part-time. By that time the recession had set in to stay, I was nearly retirement age and had been out of the job market for 20 years at a time when people were being laid off. I will never recover financially. I live on that margin between the poverty line and being in the streets. It’s a delicate balance. And sometimes a scary one. I appreciate people like you. I felt the same way when I was working and making a decent wage: my taxes were meant to help out people who needed it.. Now I’m the one on the other side, and your words validate my dignity as a human being.

  • SueZbell

    They’re aware but don’t care.

  • Guest

    when i say the word “cable” in my house, i mean internet. not only does my wife need it to keep up with work issues while at home, it is incredibly difficult to keep up with community events, apply for jobs, and pursue college classes without internet. public libraries and college campuses DO have internet, but most of us don’t have the luxury of practically living on campus. (or actually living on campus) in this case, having internet at home is perhaps not a strict necessity, but it is important if you want to do more than stay home, eat beans, and never move up. (and for some jobs, it’s a huge detriment to not have an internet connections.)

    we were gifted a Roku box and a friend of ours pays for a years subscription to netflix for a family Christmas gift, for which we are incredibly grateful. so we are able to watch movies and television shows on that, with no added cost to us besides our internet. i plan on homeschooling our daughter, and the internet will be incredibly valuable for that as well. if i WERE to work outside the home, almost every penny would be going straight to child care, making it detrimental, in my opinion, to do so. not only would we not be be bringing in any extra money (perhaps 20 or 30 dollars a month, max) but my child would be cared for by strangers. not my preference, thanks.

    in the future, i would remember that most people have “cable” for the internet, and not for 100′s of dollars a month multi-channel tv packages. we have NO cable tv at all. i still have “cable bill” listed on our monthly budget.

  • Anonymous

    Another issue to consider when talking about the cost of living difference between small towns and large cities is the cost of food. Wages and rent match each other fairly well in small towns (more accurately small town housing/rental markets do as poor a job as city markets do), but in my experience groceries are way WAY more expensive. Transportation costs, both in terms of gas prices and miles driven are also generally much more expensive, as Rae pointed out. Any measure that strives to account for regional differences in the cost of living must look at multiple indicators to get an accurate picture.

  • Maureen Vaughn

    Sometimes it is impossible to “save” enough money for a car especially when your income won’t even cover the necessities such as rent, utilities and groceries.

  • Maureen Vaughn

    I live in the central valley here in CA and we are the largest producers of produce there is and I cannot afford to buy fresh vegetables for my family.

  • Maureen Vaughn

    Here in CA if you have SSI you cannot have SNAP for yourself only for other family members who do not have SSI.

  • Maureen Vaughn

    You should be eligible for SSI as well as Medicaid if that is all your getting you need to go to the SS office and tell them to help you apply.

  • Anonymous

    As my friend Anthony Ramos states: “Imagine you were a head of a household working construction in the early 2000s. You found work in the suburbs building single family homes in a booming bedroom community about 30 minutes outside a major city, and put down roots there. But the Great Recession gutted your business and you were laid off. You don’t have the skills to work in technology or medicine, and even if you wanted to there aren’t any jobs nearby.

    “What do you do?”

    Sadly, the Great Recession or Depression continues and the reality is that millions and millions more are destined for poverty subsistence.

    We need, going forth, to recognize that tectonic shifts in the technologies of production will increasingly replace human labor with non-human means of production, and without extending equal opportunities to own (not equal results but equal opportunity for capital credit) more millions and millions of Americans will be displaced from their jobs and not be able to find a job, especially a job with decent wage or salary earnings to support a family. Then what? The hoggist greed of narrow minded, money-focused own-at-all-cost hoarders, needs to be confronted and opportunities for FUTURE private, individual ownership of FUTURE economic growth dramatically expanded to enable EVERY American to become a capital share owner in the assets of the major corporations that produce the bulk of our products and services, all financed using insured capital credit loans that will pay for themselves.

    We talk a lot about the conditions of poverty but we continue to fail to address why people are rich and thus have more income than those who are not. The reason is that rich people are OWNERS of significant wealth-creating and income-generating productive capital assets reflected in corporate organizations invested in productive land, buildings, human-intelligient machines, super-automation, robotics, digital computerized operations, etc.

    The growing income inequality is all fundamentally an economic problem and the result of CONCENTRATED OWNERSHIP of the non-human means of production embodied in corporate assets that are replacing the need for human labor with “machines” of all characterizations, OWNED by a wealthy few.

    Prior to and from 1929 to 1980, the production of products and services was largely labor based and produced in the United States, but exponentially tectonic shifts in the technologies of production began to take hold of the American economy and global economies as increasingly the non-human factor of production––productive “thing” such as human intelligent machines, super-automation, robotics, digital computerized operations, etc.––replace the need for labor. The OWNERS of the productive capital began to reap tremendous wealth and non-labor income as this transition occurred and continues to occur. The reality in today’s technologically advanced societies is to either OWN or BE OWNED! This is why we need to provide equal opportunity to EVERY American to acquire individual ownership in FUTURE wealth-creating, income-generating productive capital assets and pay for their acquisition using insured capital credit loans whereby the investments generates the income to pay for the initial creation of the assets. In this way over time EVERY American can acquire a viable capital estate income source without taking from those who already OWN, because the focus in not on redistribution of wealth but on the FUTURE creation of wealth and new capital owners.

    Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

    See my article “The Absent Conversation: Who Should Own America?” published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/who-should-own-america_b_2040592.html and by OpEd News at http://www.opednews.com/articles/THE-Absent-Conversation–by-Gary-Reber-130429-498.html

    Also see my article “The Path To Eradicating Poverty In America” at http://www.huffingtonpost.com/gary-reber/the-path-to-eradicating-p_b_3017072.html and “The Path To Sustainable Economic Growth” at http://www.huffingtonpost.com/gary-reber/sustainable-economic-growth_b_3141721.html, and the article entitled “The Solution To America’s Economic Decline” at http://www.nationofchange.org/solution-america-s-economic-decline-1367588690

  • ianr1

    You failed to mention where the father of these two children was, and what his financial contibution to the family was. I agree with the poster, we need to redefine what it means to be poor in this country.

  • ianr1

    Don’t forget about the need to have it ALL instantly…

  • http://www.facebook.com/RPManke.solar RevPhil Manke

    We have fairly fast DSL on our landline phone. I do business on the computer.

  • Ignatz

    You didn’t read it, did you? The person who set it was poor. The problem is that the method hasn’t been updated to meet changing times.

  • Ignatz

    Reading this article, you can also see how different Government work used to be. We used to respect it as a nation, and the result was that we had dedicated self-starters in Civil Service, like Gordon Fisher and Molly Orshansky – people who were proud of what they did and went the extra mile to serve the public.

    Since Reagan, we’ve treated Government workers like trash – freeloaders who take our money and do a job to be ashamed of. And the result is that there is nobody to replace these people and to revisit what they did. They AREN’T wiling to go the extra mile anymore, because their efforts are shat upon by the Republican Party. So they just keep doing what they did last year. And we now have an understaffed Government that can’t respond to changing times.

  • Jim Bullard

    The other thing that needs to be looked at is the so-called inflation rate. I’m retired with a pension and SS both of which (supposedly) have a COLA provision yet my health insurance alone has taken up more than the COLA every year since I retired. Somebody’s math is off when it comes to the actual inflation rate.

  • Diana Reichardt

    There again in another issue. No one wants to pay a fair salary for a hard day of work!! They want to pay as little as possible with no benefits. This is one of the reasons we are in this mess!

  • Ms_Phillips

    I can guarantee I know the Republican response to the single mother’s cry for help, “Not my problem.”

  • Anonymous

    I like the idea of a new series of poverty measures that take into account real expenses, but then there is the battle of what expenses should be considered. When I teach Sociology of Poverty, I always ask my students whether an internet connection should be considered a basic expense, like electricity. Until they think about what is required to get a good job, they don’t. But the more complicated the measure gets, the less useful it is. Then there is the problem of trying to define poverty. Do we use a subsistence measure, or do we use Sen’s and Nussbaum’s capabilities approaches?

    One option is to measure inequality instead of “poverty.” The OECD generally uses a percentage of the median income. The problem with that is that it assumes that the median is a good measure of well-being. We are seeing the median income lose value over time, so that people who earn the median have a more difficult time affording all those things that denote them as “middle class.”

  • Anonymous

    In most cases, the father of poor children is also poor, and any child support can be counted on to cover only minimal needs. The child support argument was crafted to meet the needs of middle income moms, not women from low income communities.

  • Anonymous

    Husband (or wife) dumps you? That is not always (maybe not even often) the fault of the dump-ee.

  • sb

    I was a divorced young woman as well with two young boys. I got a job instead of expecting society to pay me while I went to college. THAT is a luxury.

  • Majik53

    c/i/c bundles are great, until the cable goes out…

  • RON_KING

    No, poverty is when you have in sufficient resources for basic necessities of life, which includes basic cable for entertainment purposes. Entertainment is needed for good mental health. Anything below these necessities and we are talking degrees of poverty, not IF there is poverty. The definition of poverty is not limited to homelessness.

  • Anonymous

    Most people can’t get to work with no car. Public transport in many places is very poor. Cable includes internet access for most people. Many people who are hunting for work need to have an e-mail address. Getting to a public library is not practical, and the computers there are frequently substandard.

  • Jeanette Bill-Cole

    While she does mention cable, it’s likely she can not get TV without basic cable- that is the case in many areas of the country. In many cities, having a car is a necessity if you want to get to work on a consistent basis. Which you would know if you have ever relied on public transportation. I agree with Ron- there are degrees of poverty. Homelessness is the very extreme level, but there are other levels where you can’t afford new clothes, dental checkups, proper nutritional variety in your diet.

  • Susan

    Urban poverty and rural poverty look different, too. And suburban areas have unique problems related to transportation. Things like building codes make it harder for the poor to live in the US, too. For example, in Russia, a middle-class family may have a country house (dacha) where they grow their own food during the gardening season, yet if they live in an urban house (rather than an apartment) they likely have no indoor bathroom. Very, very few places in America would allow a family to live in a house built of four garage doors and a roof, as many working-class families do just over the border in Tijuana.

    I’m not trying to say that “substandard” housing would be a solution to American poverty, but we do see that in the developing world there are steps between homelessness and the comfortable middle class that don’t exist in the US. Conservatives who want the poor to pull themselves up by their bootstraps should be aware of the hurdles (created largely during the mid-20th century, when American income inequality was much smaller than today) that make gradual improvement in living standards difficult, if not impossible.

  • Susan

    Here’s another difference between what it takes to get out of poverty in the US vs. the developing world. Think of the businesses set up by microfinance in the developing world. Buying a cow to be able to sell milk can lift an African or Indian family out of poverty. A Latin American or Chinese woman might borrow for equipment and materials to sell food in the streets. Americans help people in other parts of the world start businesses that would be illegal here.

  • sb

    I agree that many doable solutions are deemed illegal now. Americans are regulated to extremes that make simple living very difficult if not downright impossible. So many neighborhood restrictions on what you can grow in your own yard, you can’t sell fresh milk from your own cow anymore (or buy it), and building codes are ridiculous these days. Even now in New York City they are trying to prevent small efficiency-size micro-apartments from being built. I think over-regulation is a huge problem. It does none of us any good to be forced into either welfare or overpriced, overregulated nonsense “for our own good” or “safety”.

  • sb

    Understaffed Government? Seriously? It’s bloated and grossly overpopulated and the only people who pay for it are working Americans.

  • Ignatz

    The fact that gasbags on the radio keep telling you that doesn’t make it so. It’s standard propaganda. How many people do you think are needed to administer a government of a nation 300 million people? A few hundred?

    But thanks for demonstrating the point in my second paragraph. People like you are the problem. Attacking public workers and then wondering why they don’t seem to have much morale.

  • sb

    People like you are the problem. We certainly don’t need “more government”. “More Government” has made the mess we’re in. It’s not about the average government worker per se. They aren’t to blame. But the number of people who can and do pay their salaries is shrinking and those people are struggling as well.

  • Jan Hoag

    Perhaps, with a car she could get a better paying job. Do Not put other down until you walk in there shoes. Would you like to live without cable and a car? If the only way your kid will see Scotland or france is by watching TV, cable is not a luxury.
    The government LIES to us about poverty. They count Food alone for an extreme count. Point out the governments Big Lie why dont you. This harms YOU.

  • Jan Hoag

    Write Pres.Obama to IMPROVE the poverty level. I and 50 more tenants has a greedy landlord, in 60 units not 5 passes the Code enforcement standards, yet he wants $800 a month it was $720 when we moved in a year and half ago. Yet all the poverty level counts is food, not cooking it, or keeping it cold. The mployees at the human services are but pawns of the elite. So email the president, to improve the poverty level.

  • Ardeare

    Sounds like a tremendous business opportunity exists building housing for the poor. But, that will never happen. The 1% get rich off the working poor. If the poor become independent, the 1% might have to actually put in a 40 hour week.

  • Anonymous

    Imagine if the 1% actually worked even 20 hours a week!! They would never survive it.