Items in a Basket: The Poverty Line

As Washington continues to debate the bailout package for Wall Street, we turn our thoughts to an outdated poverty line and main street.            

Ever wonder how the government determines the poverty line?  They use a hypothetical consumption basket to determine if an individual or family has the resources to meet the basic needs for healthy living.  The hypothetical consumption basket used today is still based on a 1964 shopping list that does not take into account modern needs which include out of pocket medical expenses, child care and transportation, as well as the typical housing, clothing and food.  Ratios of the real price of these items need to be updated and based on current consumption patterns.  Neither does the basket take into account which area of the country one goes shopping; the cost of living in Washington D.C. and the cost of living in rural Washington State have two different price tags. 

Rep. Jim McDermott of Washington State introduced the “Measuring America Poverty Act of 2008” into congress (H.R. 6941) last week.  The bill would revise the standard measure of poverty to better reflect modern realities.  Bread for the World supports this legislation.  Recently even the global poverty line was revised to create a better understanding of real poverty in developing countries to better address solutions to combat hunger. It’s time the U.S. took the same step.

* Photo by Gene Krebs