Do you want to know what poverty is?

Date: July 17, 2021

According to a new study, you should think about more than just your income.

We're used to thinking of poverty as a measure of income: impoverished individuals make very little money and, as a result, can't afford basic necessities like food, housing, or health care. The U.S. Census Bureau determines the federal poverty line income barrier each year; in 2016, that threshold is roughly $16,000 per year for a family of two, and just over $24,000 for a family of four.

Is income, however, the sole data point we should collect when studying poverty in America? Bhutan, Colombia, Chile, Malaysia, and Mexico all use a multidimensional index to evaluate poverty – Mexico, for example, considers income with education, housing, health, social cohesion, and food access. However, every country is different, and a multidimensional poverty index should look different in a country where living in a house without electricity, a permanent floor, or sanitation facilities isn't all that uncommon, compared to the United States, where many poor people have those things that would be considered luxuries in other places.

A new study in the journal Social Indicators Research offers just such a multidimensional strategy to looking at poverty in the U.S. It would lead to more accurate assessments of whether a household's basic needs are being satisfied, it claims.

"The federal poverty level was put up during Lyndon Johnson's War on Poverty - that's how dated the poverty line is," says author Shatakshee Dhongde, an assistant professor in the School of Economics at Georgia Tech. "It's been updated to account for inflation, but the concept of income, what you include in income, and the formula that was developed in the 1960s to determine whether families can fulfil their basic needs haven't changed."

The Supplemental Poverty Measure was developed by the Census Bureau in recent years to represent overall level of living. It looks at a broader idea of income, and captures those portions of income the federal poverty line doesn't: costs on childcare and travelling to work, for example. While this is beneficial, Dhongde and her co-author, Robert Haveman, professor emeritus at the University of Wisconsin-Madison Institute for Research on Poverty, contend that it is insufficient because it is still dependent solely on income.

"We have to go beyond income," Dhongde argues.

Dhongde and Haveman describe poverty as a "deprivation" of essentials rather than a set income level, implying that a family is "multidimensionally deprived" if it is unable to meet its needs in two of six dimensions:

• well-being

• instruction

• living conditions

• safety and security

• relationships with others

• the standard of living

They examined data from the United States Census Bureau's American Community Survey, which collected about 3 million observations per year from 2008 to 2013, spanning the Great Recession in the United States. With such a large data set, they were able to look at deprivation dimensions other than income, and while they found only a small difference between the income-based poverty rate (13.2%) and the multi-dimensional deprivation index (14.9%) during the recession, they discovered only a 6.6 percent overlap between the two groups. As a result, the two groups were almost completely distinct.

Lack of education, high housing burden, and lack of health insurance were the most common aspects of deprivation among Americans. They also looked at deprivation by age group, and discovered that young adults aged 18 to 24 encounter a lot of challenges as they begin their careers. It's fair to say that there's a stereotype in popular culture that the African-American population makes up a large percentage of the poor in this country — incoming president Donald Trump frequently equates black America with inner cities and hellish living conditions, despite the diversity of experiences in that community, for example — but according to this index, Asians make up a large percentage of the poor in this country. When comparing male- and female-headed households, solitary male-headed households had the highest levels of deprivation.

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