It does adjust the poverty line for inflation, but poverty today looks very different from what it was like back when statistician Mollie Orshansky based the government’s initial poverty calculation in the early 1960s on 1950s data that suggested people spend one-third of their budget on food. She was figuring out not how much money people needed to thrive, but rather the point below which people would starve. Nor was she trying to devise an indicator to be used in policymaking.
There were issues with this formula from the beginning. For one thing, food prices vary from place to place, causing regional differences in how much it costs to put food on the table. For another, families differ in terms of what they need to eat.
Another reason to not get too excited about a lower 2020 poverty rate is that the share of Americans experiencing food insecurity, meaning that they couldn’t get enough of the food needed for a balanced diet, rose to an estimated 13.9% in 2020 from 10.9% in 2019.
This discrepancy is another reason I believe the government needs to improve how it measures poverty. Something doesn’t add up when there are more Americans who cannot get enough of the food they need than there are living below the poverty line.
Elena Delavega does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.