Poverty Line Greatly Underestimated?

The official poverty line in the United States is $32,150 / year for a family of four, maybe that threshold should be higher:  $140,000! When the line was set in 1963, food made up 1/3 of the average family's budget, so taking a minimal grocery list and tripling it was a reasonable calculation because food prices were far easier to track than e.g. housing prices. But in 2024, food only makes up 5%-7% of the average family's budget! Tripling the food budget to reach a minimum income no longer corresponds with "people above this line are not in crisis."

Mollie Orshansky, the original author of the poverty line (1967). Photo credit: Social Security Administration History Archives

I came across this discussion thanks to a link from Cory Doctorow to Michael Green's Yes I Give a Fig site, where on November 23 he wrote "My Life is a Lie". He raised the points above, and apparently I wasn't the only person who saw him. His follow-up post indicates coverage in The Washington Post and several other news outlets. I had two big reactions: a "that can't be right" followed by "actually it mostly makes sense," and "haven't we fixed this already?"

"That Can't Be Right...Can It?

$140,000 is a big number, and for me as the main breadwinner in a four-person household and (until recently) an income not hugely above $140K, I had trouble thinking of myself as barely above the poverty line. But then I thought further about how it seemed like I should be rolling in cash and it didn't feel like that - in fact we were starting to tap our reserves - and the idea of a $140K threshold started to seem more reasonable.

My main quibble is with the childcare numbers: $32,773 per year (roughly $2700 per month) seemed high from my own experience of having two preschool children. Also, childcare costs decrease significantly once the child starts to attend public school (until they hit college at least). Because the childcare estimate is high and it's the biggest category in Green's list, I should take the rest with some skepticism, but overall his argument seems directionally correct.

"Haven't We Fixed This Already?

Almost precisely 24 years ago, on November 21, 2001 the TV show The West Wing aired "The Indians in the Lobby". One of the plot points in the episode was the mismatch between the poverty line and reality due to using food as the baseline. I know that the Bartlett administration was never actually in office, but people were talking about this issue six presidential terms ago and we're still stuck with it? Really?