Reasons for Measuring Poverty in the United States in the Context of Public Policy — A Historical Review, 1916-1995. The New Deal Era


After the above late-Progressive-Era report, there were essentially no federal documents with quantitative information on the low-income or poverty population until the Depression and the New Deal. Historian James Patterson has pointed out that during the Depression, public policy focused so intensely on the concept of unemployment that the concepts of poverty and low income were almost ignored.5 Despite this concentration on unemployment, however, there were a few New Deal federal documents that did present some quantitative information on the poverty or low-income population

The earliest such New Deal document that I have found was a chartbook issued in late 1934 by the Committee on Economic Security, the Cabinet-level group that drafted the legislative proposals that ultimately became the Social Security Act. The majority of the charts were on unemployment and relief, but one chart showed estimates (not based on Decennial Census or national sample survey data) of the number of families in various income classes in 1929.6 According to these estimates, which were taken from a private study7, 42 percent of all American families were estimated to be in "subsistence & poverty" in 1929, with annual incomes of $1,500 or less. ("Subsistence & poverty" were terms commonly used at the time in categorizing standard budgets by level. The "subsistence & poverty" groups correspond to what we today think of as the poverty population.) The caption to the chart stated that "It is generally conceded that the families in these categories need some form of protection against loss of income from such hazards as unemployment, old age, destitution, and sickness."

A few years later, somewhat more information on the low-income population (using a different definition) was presented in a 1938 federal government report on consumer incomes based on 1935-1936 data from an extensive national sample survey, the Study of Consumer Purchases. The report included several paragraphs and a small amount of tabular data on the lower third of consumer units (families and "single" [unrelated] individuals, with incomes not adjusted for family (consumer unit) size). The material briefly described some social and economic characteristics of this lower "third of the Nation," which comprised all consumer units with annual incomes below $780.8 The breakdown of consumer units by thirds presumably reflects the "one-third of a nation ill-housed, ill-clad, ill-nourished" of President Franklin Roosevelt's 1937 Inaugural Address.The overall purpose of the Study of Consumer Purchases was to develop estimates of consumer expenditures to study the nation's consumption demands in relation to its productive capacities, but the income distribution data that it also yielded were the most complete ever published to that date. The report noted that the income data would help legislatures apportion taxes equitably and without damaging industry, and that businessmen needed better data on potential demand for their products. In addition, "Those concerned with the living standards of the people need more accurate information on the extent to which shortage of income brings poverty damaging to health and happiness.... Any attempt on the part of Government or business to grapple with basic economic problems must rely heavily on what can be learned of the distribution of income among the various groups of the Nation's consumers."10

In January 1940, at the end of the Depression decade of the 1930's, the White House Conference on Children in a Democracy — the fourth of a series of decennial conferences on child welfare held under White House auspices — was held in Washington, D.C. The U.S. Children's Bureau published the final report of the conference early in 1942. Like the earlier conferences, the 1940 conference sought to call public attention to urgent unmet needs of children, and to contribute to the improvement of the condition of children. The final report noted that the conference was concerned with three overlapping groups of American children: all children; children in specific disadvantaged groups (e.g., crippled and blind children, and orphans); and children who were in families whose income "does not permit the level of material comfort and security that we have come to think of as a tolerable American standard of living."11 To estimate the size of the third group, the conference staff made use of the "maintenance" budget, the higher of two budgets developed by Margaret Stecker of the Works Progress Administration (WPA) during 1935-1937.12 Using a version of the maintenance budget roughly adjusted for variations in family size, the conference staff estimated that one half to two thirds of children in urban families were below the level of the maintenance budget. (The two thirds figure applied to 1935, while it was believed that the 1939 proportion would have been between one half and two thirds.)13

In 1942, the National Resources Planning Board published a report, Security, Work, and Relief Policies, which examined existing social welfare programs (various forms of cash relief, social insurance, and work relief) and made recommendations for improvements in them. The report included several estimates of unmet need for "public aid" [cash transfers — e.g., general relief]. For one of these estimates, the report adopted the WPA emergency budget (the lower of the two budgets mentioned in the previous paragraph) as a criterion of need for public aid. Using a version of the emergency budget adjusted for variations in family size, the report estimated that in 1935-1936, 21 percent of all persons and over 25 percent of all children in urban communities were members of families (of two or more) that had not received some form of relief but had incomes below the level of the emergency budget.14 (The report also used the emergency budget to assess the adequacy of benefit levels under various public-aid programs.15)

5.  James T. Patterson, America's Struggle against Poverty, 1900-1994, Cambridge, Massachusetts, Harvard University Press, 1994, p. 42.

6.  Committee on Economic Security, The Need for Economic Security in United States [chartbook], Washington, D.C., November 1934, Chart VII, "The Number of Families in Various Income Groups, 1929." 

7.  Maurice Leven, Harold G. Moulton, and Clark Warburton, America's Capacity to Consume (Publication No. 56 of the Institute of Economics of the Brookings Institution), Washington, D.C., Brookings Institution, 1934, p. 87.

8.  [U.S.] National Resources Committee, Consumer Incomes in the United States[:] Their Distribution in 1935-36, Washington, D.C., U.S. Government Printing Office, August 1938, pp. 1, 7-9, and 95.

9.  Franklin D. Roosevelt, "The [Second] Inaugural Address, 1937," pp. 29-30 in Harold L. Sheppard (editor), Poverty and Wealth in America(a New York Times Book), Chicago, Quadrangle Books, 1970. 

10.  Consumer Incomes in the United States..., p. 1.

11.  White House Conference on Children in a Democracy[,] Washington, D.C.[,] January 18-20, 1940: Final Report (Children's Bureau Publication No. 272), Washington, D.C., United States Government Printing Office, 1942, pp. ix, xiv, 3, and 6-9.

12.  For the WPA "maintenance" and "emergency" budgets, see Margaret Loomis Stecker, Quantity Bu[d]gets of Goods and Services Necessary for a Basic Maintenance Standard of Living and for Operation Under Emergency Conditions..., Research Bulletin [Series I, No. 21], Division of Social Research, Works Progress Administration, Washington, 1936; Margaret Loomis Stecker, Intercity Differences in Costs of Living in March 1935, 59 Cities, Research Monograph XII, Works Progress Administration, Division of Social Research, Washington, U.S. Government Printing Office, 1937; and Gordon M. Fisher, "From Hunter to Orshansky: An Overview of (Unofficial) Poverty Lines in the United States from 1904 to 1965" (unpublished paper), October 1993 — revised August 1997, pp. 33 and 36-38. (The latter paper is available on the WorldWide Web at <>.) While the 1940 White House Conference staff used the maintenance budget as a measure of income inadequacy, note that it was the lower WPA budget — the emergency budget — that was conceptually equivalent to Orshansky's poverty thresholds. (For the latter point, see Fisher, "From Hunter to Orshansky..." (1997 revision), pp. 33, 36, and 11, and footnote 159.)

13.  White House Conference on Children in a Democracy..., pp. 10, 78-82, and 379-380.

14.  Committee on Long-Range Work and Relief Policies, Security, Work, and Relief Policies ( the National Resources Planning Board), Washington, D.C., United States Government Printing Office, 1942, pp. 153, 155, 569, 571-572, and 578-581; cf. also p. 163. 

15.  Security, Work, and Relief Policies, Chapter VII, "The Level of Living Provided to Recipients of Public Aid," pp. 161-205.