What Has Been the Effect of Using an Outdated Poverty Measure?
There is widespread agreement among virtually everyone who looks at the current poverty measure that it is seriously flawed as an economic statistic. What effect has this had? Our poverty measurement has been impervious to most of the policies designed to improve life among low-income families that were implemented in the decades after 1963. The 1970s saw rapid growth in food stamp and housing benefits. In the 1980s, Congress enacted major tax reforms that reduced tax burdens on low-income families. In the 1990s, the expansion of the EITC provided wage subsidies to many low-wage workers. Since the 1980s, the dollars paid to public medical care has expanded enormously. In the late 1990s Food Stamp participation fell sharply, but (due to substantial program revisions) rose again in the early 2000s. None of these program changes had any measurable affect on the U.S. poverty rate, nor could they have any effect given how poverty is measured. Indeed, the official U.S. poverty rate, shown in
