the Long of it ........

unintended consequences and other musings


Am I in Poverty?

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The Federal Government just released updated poverty statistics that showed a large increase – now 14% of Americans (43 million) live in poverty!  In reading the various news reports, none seemed to tell me what the metric was?  How little income does it take to be in poverty?  After a bit of research, turns out an annual income of 21,756$ per year (1813$/month) for a family of four will put you in the poverty statistics.

Unfortunately, this income does not measure the non-cash income that this family might receive:
Income:                    1813$/month  or 21,756$/yr
Food Stamps:             668/month     (max)
Housing Assistance:    600/month
Medicaid:                    ???
Tax Credits:                 ???
Total Income             $36,972 before Medicaid and any tax credits
I am not suggesting that these families are not struggling in making a living, but as usual, the news orgs are not telling you the full truth.  In addition, it lumps many older people in this category even though they may have a car and house completely paid off and are drawing on a savings account.   While we will have a new metric that will address some of these issues, this is a metric that has lost all meaning/worthiness.  Some have suggested using consumption as a metric – truly poor people almost always spend less on consumption – I support this.
I have also seen the same reporting in churches who post salaries of their pastors; these numbers often leave out tax benefits, housing allowances (which are very generous), car allowances, book allowances, etc.
When you tell me that 43 million American people live in poverty, tell me what this really means? – I suspect that many don’t want to hear that people living in poverty can make 36K$/year.  On my next trip to the barrios in Mexico, I will try and explain that to be poor in the US means you only have 36K$/year to spend – suspect I may not be able to get this across…..

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