Reasons for Measuring Poverty in the United States in the Context of Public Policy — A Historical Review, 1916-1995. The 1995 Report of the National Research Council's Panel on Poverty and Family Assistance and Events Leading Up to It


In 1989-1990, there were several calls for a review or revision of the official poverty measure.103 Among those calling for a revision of the poverty measure were the Joint Economic Committee (JEC) of Congress and Patricia Ruggles of the Urban Institute.

In October 1989, a staff study104 on alternative measures of poverty was prepared for the JEC. The staff study appears to have been at least in part a response to a new alternative poverty series released by the Census Bureau which recalculated the thresholds using an alternative price index but made no other changes in the poverty measure.105 While the staff study was largely a review of several alternative poverty measures, it did include a comment that "the recent series of changes in poverty measurement introduced on a piecemeal basis by the Census Bureau highlight the need for a more complete and coordinated overhaul of the methodology we use to calculate poverty statistics."106

In April 1990, Ruggles published a book107 in which she called for a revision of the poverty measure and presented several alternative poverty measures. In the book, Ruggles noted several reasons for having a poverty measure. "One fundamental reason for having a poverty measure is to allow comparisons of economic well-being — across families, across population groups, across regions, and perhaps most of all, across time. These comparisons in turn may help us to judge the effects of economic growth and of public policies and to evaluate the need for public intervention of one type or another." But in the context of public policy, "the major purpose of a poverty measure is to allow us to assess the effects of our policies and programs and to identify people and groups whose most basic economic needs remain unmet." She also noted that the federal government uses its official poverty measure "in setting eligibility standards for certain public programs."108

In June 1990, the JEC held a hearing109 on the measurement of poverty, while in October 1990 the House Select Committee on Hunger held a hearing110 on redrawing the poverty line. In the June 1990 hearing, John Weicher (appearing "as a private citizen" rather than in his capacity as an Assistant Secretary of the Department of Housing and Urban Development) described "three purposes in our society" that a poverty measure serves. "First and most important, it is a broad measure of economic and social well-being." Additionally, the poverty measure is used "to design low-income programs assess the effectiveness of various programs." (Under "designing programs," he noted that the poverty measure "is used to determine eligibility...and to allocate grant funds" based on poverty population data.)111

During the summer of 1990, JEC members worked successfully to get funds appropriated for the National Academy of Sciences/National Research Council to study poverty measurement.112 Under provisions of an appropriation bill passed in the fall of 1990, funds were provided for the NRC to make a study of the official U.S. poverty measure to provide a basis for a possible revision of the poverty measure. In 1992, the NRC's Committee on National Statistics appointed a Panel on Poverty and Family Assistance (comprising thirteen non-government academic experts) to conduct this study. The Panel published its report113 of its study in May 1995. In the report, the Panel did not propose a specific set of dollar figures as poverty lines, but it did propose a new approach for developing an official poverty measure for the U.S., and it did present what it called a "reasonable range" of dollar figures within which it recommended the reference threshold for a four-person family should be set.114 Describing the effects and uses of the poverty measure, the report noted that it is "an important social indicator that affects not only public perceptions of well-being in America, but also public policies and programs.... The poverty measure influences policy an indicator of economic well-being to which policy makers, advocates, analysts, and the general public are sensitive. Trends in poverty rates over time and differences in poverty rates across population groups are often cited as reasons that a particular policy (or set of policies) is, or is not, needed.... The nation's understanding about and commitment to the alleviation of poverty has been informed for many years by the official measure of economic deprivation [poverty].... [The poverty measure] is important in its own right as a barometer of the extent to which there is a segment of U.S. society that lacks the means to obtain basic economic necessities; it is also important because it correlates highly with other aspects of deprivation, such as poor health and low educational levels." "The poverty measure also plays a role in evaluating government programs for low-income people and, more generally, the effects of government policies and economic growth on the distribution of income. In academia, there is a large literature on the characteristics of the poor, factors leading to poverty and other kinds of deprivation, and the effects of poverty on other behaviors and outcomes." In addition, "[s]ome government assistance programs for low-income people determine eligibility for benefits or services by comparing families' resources to the poverty thresholds or a multiple of them. Also, some formulas for allocating federal funds include state or local poverty rates as a factor."115

103.  For accounts of these calls, see Richard J. Margolis, "The Arithmetic of Poverty," New Leader, Vol. 73, No. 6, April 16, 1990, pp. 14-15; Julie Kosterlitz, "Measuring Misery," National Journal, Vol. 22, No. 31, August 4, 1990, pp. 1892-1896; and Jason DeParle, "In Rising Debate on Poverty, The Question: Who Is Poor?", New York Times, September 3, 1990, pp. 1 and 10. Cf. also Spencer Rich, "Drawing the Line on Poverty[:] Census Bureau Measurement Sparks Criticism From Many Quarters," Washington Post, October 30, 1989, p. A13.

104.  [Patricia Ruggles — unattributed], "Alternative Measures of Poverty," A Staff Study Prepared for The Joint Economic Committee, October 18, 1989. The 22-page study was an earlier version of material that appeared in Ruggles' 1990 book.

105.  For the first release of this particular alternative series, see U.S. Bureau of the Census, Current Population Reports, Series P-60, No. 166,Money Income and Poverty Status in the United States: 1988 (Advance Data From the March 1989 Current Population Survey), Washington, D.C., U.S. Government Printing Office, October 1989, pp. 2, 10, 12-13, and 127-153. See also the Spencer Rich article cited in footnote 103.

106.  "Alternative Measures of Poverty," pp. 4-5.

107.  Patricia Ruggles, Drawing the Line: Alternative Poverty Measures and Their Implications for Public Policy, Washington, D.C., Urban Institute Press, 1990. See also Patricia Ruggles, "The Poverty Line — Too Low for the 90's," New York Times, April 26, 1990, p. A31; Spencer Rich, "Economist Says Poverty Line Should Be Higher[:] Revised Formula Would Take Into Account Rising Social Standards for a Decent Life," Washington Post, May 4, 1990, p. A25; "U.S. Poverty Measurements Outdated, Policy Analyst Asserts in New Book,"Economic Opportunity Report, Vol. 25, No. 19, May 14, 1990, p. 147; and Daniel B. Radner, "Book Review: Drawing the Line," Social Security Bulletin, Vol. 53, No. 12, December 1990, pp. 31-34.

108.  Ruggles, Drawing the Line..., pp. 1 and 3; cf. pp. xv and 163. She had included similar comments on uses of the official U.S. poverty measure in "Alternative Measures of Poverty," p. 3.

109.  United States Congress, Joint Economic Committee, Measuring Poverty[:] Hearing... (One Hundred First Congress, Second Session, Senate Hearing 101-971, June 14, 1990), Washington, D.C., U.S. Government Printing Office, 1990. See also United States Congress, Joint Economic Committee, "Is the Official Definition of Poverty the Best One?" (Press Release), June 7, 1990.

110.  U.S. House of Representatives, Redrawing the Poverty Line: Implications for Fighting Hunger and Poverty in America[ — ]Hearing Before the Select Committee on Hunger...Held in Washington, DC, October 4, 1990 (One Hundred First Congress, Second Session, Serial No. 101-24), Washington, D.C., U.S. Government Printing Office, 1991.

111.  John C. Weicher, "Statement...", p. 47, and Weicher, "Prepared Statement...", pp. 51-52 in United States Congress, Joint Economic Committee, Measuring Poverty[:] Hearing....

112.  An August 1990 news story noted that "[k]ey members" of the JEC had gotten funds for this purpose included in a House appropriations bill; see Kosterlitz (cited in footnote 103), p. 1892. Describing the origin of its study, the Panel on Poverty and Family Assistance wrote, "the Joint Economic Committee of Congress initiated an independent, in-depth review of the U.S. poverty measure, working with the House Subcommittee on Census, Statistics, and Postal Personnel. Funds for a study by the National Research Council (NRC) of the official poverty measure and alternatives to it were appropriated to the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor" (Citro and Michael (cited in the immediately following footnote), p. xv).

113.  Constance F. Citro and Robert T. Michael (editors), Measuring Poverty: A New Approach, Washington, D.C., National Academy Press, 1995.

114.  For further details on the Panel on Poverty and Family Assistance and its report, see Fisher, "The Development of the Orshansky Poverty Thresholds..." (1997 revision), pp. 47-50. For additional information, see Gordon Fisher, "An Overview of Developments Since 1995 Relating to a Possible New U.S. Poverty Measure (plus a Summary of the Recommendations of the National Research Council's Panel on Poverty and Family Assistance)," October 1998 — revised May 14, 1999. (This paper is available on the WorldWide Web at <>.)

115.  Citro and Michael, pp. 1, 18, 21, and 89.