How census numbers on poverty can be misleading

Print

In case you missed it, “The Mismeaure of Poverty,” an op-ed piece run in the New York Times recently, is a must-read given these congressional times and the Census Bureau’s official report that poverty in the United States remains at about 15 percent.

Writer Sheldon H. Danziger makes a case that without the country’s anti-poverty measures, life would be significantly worse for those on the lowest rung of the economic ladder.

Writer Danziger, new president of The Russell Sage Foundation , a nonprofit organization that studies poverty, disputes what U.S. Rep. Paul D. Ryan, Republican from Wisconsin, suggested earlier this year:

“We have spent $15 trillion from the federal government fighting poverty, and look at where we are, the highest poverty rates in a generation, 15 percent of Americans in poverty.’’

Community Sketchbook focuses on the economic and social challenges facing communities, especially low-income communities and communities of color, and how people are trying to address them.

It is made possible by support from the John S. and James L. Knight Foundation, The Minneapolis Foundation, and some Minneapolis Foundation donor advisors.

Community Sketchbook articles may be republished or distributed, in print or online, with credit to MinnPost and the foundations.

(The Census Bureau’s data shows Minnesota is doing better than most of the nation. Our state’s poverty rate declined from 11.9 percent in 2011 to 11.4 percent last year, meaning 23,000 fewer people are now counted as poor. Only two states showed a decline.)

Argues Danziger: “But this position is wrong, for two reasons. The first is that the official measure is misleading — it measures only cash income, and it does not count benefits from many programs that help the poor. If they were counted, the rate would be closer to 11 percent.’’

Danziger is also a co-editor of “Legacies of the War on Poverty,’’ which harkens back to anti-poverty policies of Lyndon Johnson’s administration and which helps make a case presented by poverty researchers that “poverty and racial discrimination would likely have been much greater today if the War on Poverty had not launched.” The poverty rate then was historically low at 11.1 percent.

Continuing to present evidence for his point of view, Danziger uses, for example, the benefits of the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, though stamps were long ago replaced by electronic benefits cards.

“A dollar of SNAP subsidies spent on food frees up a dollar for low-income families to spend on rent, utilities or other needs,’’ Danziger says. And that food translates into better health, higher educational achievement and greater earnings for children and adults, he says.

Counting SNAP benefits, four million people rise above the poverty line, according to Danziger.

He cites another example. Social Security benefits — which are included in the government’s official measure of poverty — help keep the elderly poverty rate at less than 9 percent, he says.

In contrast, without Social Security payouts, the elderly poverty rate would be about 44 percent, he says.

So, why does the national poverty rate continue high?

Danziger blames in part income inequality, meaning that though the 2012 economy grew by 2.8 percent, and corporate profits rose, “the earning of full-time workers, median household income and the poverty rate barely changed.’’

More benefits from growth must reach the poor, he says. That’s accomplished by recognizing the effectiveness of anti-poverty policies and expanding on those efforts as well as increasing the minimum wage, he maintains.

Minnesota Budget Bites, a blog of the Minnesota Budget Project, calls these other anti-poverty measures “effective at lifting people out of poverty” and reveals the numbers of people helped: 15.3 million Americans seniors through Social Security payments, 1.7 million Americans through Unemployment Insurance benefits and 2.9 million American children through the federal Earned Income Tax Credit.

Danziger says new numbers to be released by the Census Bureau in October do take into account the benefits of programs for low-income families, though those numbers are sometimes overlooked by the public and the press.