"Anticipate charity by preventing poverty"

Maimonides

Recently I have adopted a grace around Sunday mornings. I explore the preceding days to see what worked, what needs a little attention before Monday arrives and any cool stuff that needs sharing.

First, I tend to listen to any podcasts discussing poverty in a meaningful way. I should clarify that I hope its meaningful but I am often disappointed.

Freakonomics recently (April 28th, 2021) aired a show, The True Story of the Minimum-Wage Fight (episode 460).

In the U.S., the official poverty threshold is $26,500 in annual income for a family of four. For a one-person household, it’s just under $13,000. In 2019, the official poverty rate in the U.S. was 10.5 percent, down from 11.8 percent just a year earlier. In fact, this was the fifth annual drop in a row, and the 2019 figure was the lowest on record since 1959, when the poverty rate was first measured. 

If you saw me on my morning run dictating into my cell phone—here are my thoughts. When terms like poverty threshold are used in important discussions they should be explained. Mollie Orshansky created the thresholds we still refer to partially today. They were based on the cheapest USDA food budget estimates to meet minimal standards.

Only food was considered in the algorithm and was multiplied by a factor of 3 assuming families spent 1/3rd of their income on food. These were used by the Census to determine nationwide poverty levels by race and other demographic characteristics but have been linked to consumer price index since after 1963.

The poverty guidelines are yearly estimates used for administrative purposes and our government began issuing them in 1965 to help determine eligibility for assistance and programs. My point is when you declare a $26,500 threshold we should know what we are measuring.

Because of the important role of Consumer Price Index (CPI) in determining thresholds and guidelines we should also define this term.

“a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas. Average price data for select utility, automotive fuel, and food items are also available.”

Are you curious about the spikes in the costs of electricity, gasoline, or food and what that might mean for a family straddling the poverty lines? What I hope is evident by this discussion is the complexity of assigning a true poverty threshold in light of increases of childcare, housing, transportation (and associated costs), education, and a myriad of changes that arise from economic conditions like job loss, illness, or say, global pandemics.

The well known limits of CPI include not measuring the actual costs of living based on your geography. We are all familiar that it does not cost the same to live in rural Kansas as it does to live in San Francisco. Location matters.

What about the unemployment rate? Surprise—that also depends on geography.

This graphic shows how defining the state of the economy based on employment needs to be industry specific to complete the narrative. You often hear pundits exclaiming bold improvements in the absence of clarifying what industries are rebounding and which continue to struggle.

“…information graphics are for inferences. And you get different inferences depending on how you display the information.”— Barbara Tversky

Things you might be interested in reading:

Poverty in the United States 1959 to 1968 — interesting because it discusses the evolution of the measure of poverty.

The Humanitarian Data Exchange — a collective of humanitarian data for use.

ScreenplaySubs—Watch Netflix Through a Filmmaker’s Lens. I love this website. It is a bit out of place here but try it out next time you are streaming a movie. Especially if you keep dreaming about writing that screenplay. You get to watch the editorial process underneath your new fave movie.