Sunday, January 22, 2006

Is it time to change the poverty guidelines?

Officially, 10.1% of America’s elderly live in poverty, but a new report from the AARP suggests that the standards we use to measure poverty are outdated and, as a result, the number of poor older people is understated.

A different standard, which includes out-of-pocket medical expenses, child-care costs, work-related expenses like transportation and other costs, indicates that 16.5% of elderly Americans live in poverty.

This is more than a conversation topic for statisticians. The official poverty standards are used to determine a person’s eligibility for housing subsidies, food stamps and other benefits -- as well as access to legal help from programs like Florida A&M’s clinics.

The official poverty guidelines (see them here) are based on the cheapest of four food plans designed by the USDA. The guidelines were developed in the early 1960s and haven’t changed since then, except for adjustments for inflation.

The differences in the poverty rates are much smaller for younger age groups, which emphasizes the importance of health-care costs. In 2003, AARP estimated that the average medical out-of-pocket expenditure for older persons covered by Medicare was $3,455 -- a huge portion of the poverty-level income of $8,825 for a single person age 65 or older.

Read the AARP report here.

5 Comments:

At 1:35 PM, Anonymous annual credit report said...

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At 10:42 AM, Blogger Jacqueline Dowd said...

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At 8:51 PM, Anonymous Rachel S said...

I agree that we need to recalculate the poverty level...the Orshansky method, which argues that staple food items should take up 1/3 of income, is the basis for many of the measurements, and it is clearly flawed. Expecially in a place like NYC where rent of a one bedroom is about $1000 even in the "worst" neighborhood.

However, I personally find the problem of child poverty much greater in this era, and the programs that benefit children are the ones systematically being slashed AFDC in particular. Nevertheless, your point is well taken.

 
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