Reasons for Measuring Poverty in the United States in the Context of Public Policy — A Historical Review, 1916-1995. The Period Leading Up to the War on Poverty

06/01/2000

In December 1959, the Joint Economic Committee of Congress published a paper on the low-income population by Robert Lampman, an economics professor at the University of Wisconsin at Madison; the paper was prepared in connection with a Committee study of employment, growth, and price levels.27 The paper had been requested by the Committee, and was intended to refute the claim by John Kenneth Galbraith (in his 1958 book The Affluent Society) that modern poverty would not be reduced by economic growth, as it had been in the past.28 In the introduction to his paper, Lampman wrote, "This study is directed to the general question of how much progress is being made in overcoming poverty in the United States.... A major purpose of any study of low income should be, of course, to provide background for policymaking aimed at elimination of poverty. Hence, a leading question which motivates all the others asked above is, what preventive and remedial programs can we improve or initiate to hasten the complete victory over poverty?"29 The paper included data on the number and some characteristics of families and persons with 1947 and 1957 incomes below a modified version (adjusted for family size) of the 1949 SLIF's low-income line.30

During the 1960-1962 period, there were no significant government studies which measured poverty. However, there were a number of private articles and books which did so. Several of these are discussed here because they influenced President Kennedy (directly or indirectly) to begin the process that ultimately led to President Johnson's War on Poverty31, and thus had an indirect influence on public policy.

In March 1962, Michael Harrington published his landmark book, The Other America.32 In it, he sought to convince readers that despite the rise to affluence of much of American society in the 1950's, the U.S. still had a major poverty problem — not just "pockets" of poverty, but between 40 and 50 million American citizens (roughly a quarter of the population) "existing at levels beneath those necessary for human decency." He hoped that public recognition of "the huge, enormous, and intolerable fact of poverty in America" would persuade the public that "the moral obligation is plain: there must be a crusade against this poverty in our midst."33 His analysis of the poverty population was mostly qualitative, with chapters on dispossessed workers, the rural poor, the Negro poor, and the aged poor, and shorter sections on several other groups. His actual statistical measurement or analysis of poverty was rather exiguous34: he set a poverty line of "somewhere between $3,000 and $3,500 for an urban family of four" (with unspecified adjustments to be made for family size and other factors), and concluded — without specifying a year — that this would result in a poverty population of "around 50,000,000 people."35 He did not put great stress on a particular figure: "If some statistician should find an error in technical approach, if he could say, there are 10,000,000 less poor, that would not really be important. Give or take 10,000,000, the American poor are one of the greatest scandals of a society that has the ability to provide a decent life for every man, woman, and child." On the other hand, he did note at one point that "the choice of figure will determine one's picture of the kind of people who make up the culture of poverty.... This obviously is of great importance, for at least one consequence of a study of poverty should be to point America toward those groups that must be given special help."36

In April 1962, the Conference on Economic Progress (CEP) — a non-profit group which favored increased public spending to stimulate economic growth, full employment, and full production, and to meet important human needs — published a study37 on poverty and deprivation in the United States — the "bulky pamphlet" referred to by Macdonald (see footnote 31). (The study was directed by Leon Keyserling, the former chairman of the Council of Economic Advisers under President Truman.) The study identified the "top domestic problem for the 1960's" as being "to prevent the swiftly advancing technology and automation from continuing to cause — with periodic ups and downs — a long term rising volume of unemployed workers and idle plants," equating this problem with "maintaining a high enough rate of national economic growth to utilize fully the constant upsurge in our productive powers." It noted that economic growth since 1953 had been "little better than half the needed rate," resulting in higher unemployment after the most recent economic recovery than after earlier post-World-War-II economic recoveries. "Satisfactory" economic growth "requires expansion of both private consumption and public programs devoted to the general welfare — which means serving unmet human needs."38 The study presented figures on the number of Americans in "poverty" and "deprivation" in 1929, 1935-36, 1947, 1953, and 1960. It set a poverty line of $4,000 (in 1960 dollars) for families of all sizes and $2,000 for unrelated individuals, and defined "deprivation" (also in 1960 dollars) as being between this poverty line and $6,000 (for families) or $3,000 (for unrelated individuals). By these definitions, a total of 77 million Americans — 43 percent of the total population — were living in either poverty or deprivation in 1960; the study used these striking figures and other arguments to seek to dispel what it described as the "growing complacency" of recent years about the existence of poverty and deprivation in the U.S. The study noted that under its (constant-dollar) definition of poverty, the number of Americans in poverty had dropped at a much slower rate during the period of low economic growth between 1953 and 1960 than it had from 1935-36 to 1953.39 The study's policy recommendations included the following: government statement of "higher and more realistic goals" for economic performance (e.g., low unemployment, high economic growth rate), "including specific targets for the reduction of poverty and deprivation"; higher outlays under the federal budget "as an instrument of economic growth"; higher transfer payments under Social Security, Old-Age Assistance [a federal-state public assistance program which was a predecessor of the present Supplemental Security Income program], and unemployment insurance; reduction of the tax burden on low-income families to stimulate consumption and economic growth as well as to directly reduce poverty and deprivation; a liberalization of the existing tight money policy; an "all-out attack...against farm poverty"; and higher wage increases to keep up with productivity increases, as well as a "considerabl[e]" increase in the minimum wage and a broadening of its coverage.40

In 1962 Gabriel Kolko published a book41 on the distribution of wealth, income, and power in the United States. He wrote the book in hopes of refuting what he called "the dominant social theory of our time" — that there had been a significant redistribution of income in the U.S. since the Great Depression, extending prosperity to the great majority of the population and making America into a mass-consumption, almost classless society.42 As part of his refutation, he presented figures on the proportion of American spending units (families and unrelated individuals) who were below what he called the "maintenance" and "emergency" levels in 1947, 1951, and 1957. His "emergency" level can be considered a poverty level, while his "maintenance" level was conceptually equivalent to the CEP's deprivation level. He found that during those years, a total of roughly half of all families and unrelated individuals had been below the maintenance level, while roughly a third had been below the emergency level.43 He did not propose a specific set of reforms to deal with the "far-reaching problems" he had described. "Rather, I have attempted to focus attention on the economic realities of our society, and on the disparity between them and the dominant theories on equality and economic justice in the United States. Perhaps the ideal of a social and economic democracy — the type of society erroneously said to exist in the United States today — will at least serve as the stimulus for its ultimate creation."44

In May 1963, Walter Heller, Chairman of the Council of Economic Advisers (CEA), sent a memorandum45 to President Kennedy about "Progress and Poverty." This memorandum was not published, but it is discussed here because of its role in the sequence of events that led to the declaration of the War on Poverty.46 Using figures prepared by Robert Lampman, "CEA's expert on poverty," the memorandum discussed "the drastic slowdown in the rate at which the economy is taking people out of poverty." In two tables attached to Heller's memorandum, Lampman added poverty/low-income figures for 1961 to the figures for 1947 and 1957 presented in his 1959 study discussed above, and also provided figures on the number of families in various years between 1947 and 1961 with incomes below $3,000 in 1961 dollars (an earlier version of what became the CEA's family poverty line presented in its January 1964 report discussed below). Both sets of figures showed that the decrease in the poverty rate slowed sharply between 1956/1957 and 1961. Heller's memorandum said that the "distressing" figures "offer one more demonstration of the costs of economic slack. And they, therefore, also provide another dimension of what's at stake in the proposed tax cut." In this particular memorandum, however, Heller did not use the poverty figures to argue for a specific policy such as an attack on poverty.

In June 1963, an Advisory Committee on Standard Budget Research appointed by the Bureau of Labor Statistics (BLS) made its report to the Bureau. The focus of the Committee's report was the revision of BLS' City Worker's Family Budget (CWFB), which represented a living standard higher than poverty. However, the uses which the report described for the CWFB and other standard budgets are also applicable to poverty lines. The three major uses described in the report were: appraisal of the economic condition of groups or of the total population; evaluation of the need for and the effect of specific laws and programs; and guidance of administrative determinations of need.47

In July 1963, Mollie Orshansky — a social science research analyst working for the Social Security Administration (SSA) — published "Children of the Poor,"48 an article in which she described an initial version of her poverty thresholds (for families with children only). The article seems to have been connected with an SSA research project on poverty as it affected children; Orshansky's original purpose was not to introduce a new general measure of poverty.49 In the introduction to this article, Orshansky wrote, "...there is an underlying disquietude reflected in our current social literature, an uncomfortable realization that an expanding economy has not brought gains to all in equal measure. It is reflected in the preoccupation with counting the poor — do they number 30 million, 40 million, or 50 million?...It would be one thing if poverty hit at random, and no one group were singled out. It is another thing to realize that some seem destined to poverty almost from birth — by their color or by the economic status or occupation of their parents.... Year after year the same kinds of people continually appear at the bottom of the income pyramid."50 In the body of the article, Orshansky presented statistics on the number of families with children and the number of children in poverty using two sets of poverty thresholds — one set based on the Agriculture Department's low-cost food plan and another set (the set ultimately adopted for official use) based on the even cheaper economy food plan.51 At the end of the article she noted the need for refining the standard for measuring poverty and the need for basic research into the cause and cure of chronic poverty, and concluded, "If it be true that the children of the poor today are themselves destined to be the impoverished parents of tomorrow, then some social intervention is needed to break the cycle, to interrupt the circuits of hunger and hopelessness that link generation to generation. For the common benefit of all we must assure the security and well-being of all our children — at the same time the Nation's most precious and most perishable resource."52


27.  Robert J. Lampman, "The Low Income Population and Economic Growth" (Study Paper No. 12), pp. 1-36 in United States Congress, Joint Economic Committee, Study Papers Nos. 12 and 13[,] The Low Income Population and Economic Growth...The Adequacy of Resources for Economic Growth in the United States...Materials Prepared in Connection With the Study of Employment, Growth, and Price Levels...(December 16, 1959), Washington, D.C., United States Government Printing Office, 1959. For a brief discussion of this paper and its low-income line, see Fisher, "From Hunter to Orshansky..." (1997 revision), pp. 47-48.

28.  Study Papers Nos. 12 and 13..., p. v; and Lampman, "The Low Income Population...", pp. 4 and 24-28. See also the comments on this point on p. 47 of Fisher, "From Hunter to Orshansky..." (1997 revision). For Galbraith's assertion that "modern poverty...is not efficiently remedied by a general and tolerably well-distributed advance in income," see John Kenneth Galbraith, The Affluent Society, New York, New American Library, 1964 [original edition published in 1958], p. 254 (Chapter XXIII, Section III).

29.  Lampman, "The Low Income Population...", p. 3.

30.  Lampman, "The Low Income Population...", pp. 4-6, 12-15, and 34-35.

31.  Although sources differ on this point, it appears that Michael Harrington's The Other America and the other books may have influenced Kennedy less directly than indirectly, through a 1963 review article by Dwight Macdonald in the New Yorker. (See Sar A. Levitan, The Great Society's Poor Law[:] A New Approach to Poverty, Baltimore, Johns Hopkins Press, 1969, p. 13; and Michael B. Katz, The Undeserving Poor: From the War on Poverty to the War on Welfare, New York, Pantheon Books, 1989, p. 82. For other readings of the record, see Michael Harrington, The New American Poverty, New York, Holt, Rinehart and Winston, 1984, pp. 4-5 and 17-18; and James T. Patterson, America's Struggle Against Poverty, 1900-1994, Cambridge, Massachusetts, Harvard University Press, 1994, p. 99.) In addition to Harrington's book, Macdonald also reviewed books by Kolko and Morgan et al. and a "bulky pamphlet" by the Conference on Economic Progress. (See Dwight Macdonald, "Our Invisible Poor," New Yorker, Vol. 38, No. 48, January 19, 1963, pp. 82-132.)

32.  Michael Harrington, The Other America[:] Poverty in the United States, Baltimore, Penguin Books, 1966 [original edition published in 1962]. For a brief review of the poverty lines discussed in the book, see Fisher, "From Hunter to Orshansky..." (1997 revision), pp. 50-51. For the article out of which the book grew, see Michael Harrington, "Our Fifty Million Poor[:] Forgotten Men of the Affluent Society,"Commentary, Vol. 28, No. 1, July 1959, pp. 19-27.

33.  For the quotations, see Harrington, The Other America..., pp. 9, 10, and 163.

34.  However, few statistically detailed analyses of the poverty population have had as great an influence on public policy as Harrington's book did.

35.  Harrington, The Other America..., p. 177.

36.  Harrington, The Other America..., pp. 172-173.

37.  Conference on Economic Progress, Poverty And Deprivation In The United States[:] The Plight Of Two-Fifths Of A Nation, Washington, D.C., April 1962.

38.  Poverty And Deprivation..., pp. 1 and 7.

39.  Poverty And Deprivation..., pp. 2-3, 8-15, 19-22, 29, and 93. For a further discussion of the poverty and deprivation lines and other income levels used in this study, see Fisher, "From Hunter to Orshansky..." (1997 revision), pp. 51-52. For versions of this poverty line used in earlier CEP publications, see Conference on Economic Progress, Toward Full Employment and Full Production[:] How to End Our National Economic Deficits, Washington, D.C., July 1954, p. 32; and Conference on Economic Progress, Consumption[:] Key to Full Prosperity[ — ]Toward Rising Living Standards..., Washington, D.C., May 1957, pp. 4 and 30-33.

40.  Poverty And Deprivation..., pp. 5-7 and 76-82.

41.  Gabriel Kolko, Wealth and Power in America[:] An Analysis of Social Class and Income Distribution, New York, Frederick A. Praeger, 1962. For the article out of which the book grew, see Gabriel Kolko, "The American 'Income Revolution,'" Dissent, Vol. 4, No. 1, Winter 1957, pp. 35-55.

42.  Kolko, Wealth and Power in America..., pp. 3-7.

43.  Kolko, Wealth and Power in America..., pp. 96-101.

44.  Kolko, Wealth and Power in America..., p. 133.

45.  May 1, 1963, Memorandum for the President [John F. Kennedy] from Walter W. Heller, Chairman of the Council of Economic Advisers — Subject: Progress and Poverty (Theodore C. Sorensen Papers: Subject files - 1961-64, "Council of Economic Advisers. 5/1/63-9/23/63," Box 31, John Fitzgerald Kennedy Library).

46.  For that role, see Arthur M. Schlesinger, Jr., A Thousand Days[:] John F. Kennedy in the White House, Boston, Houghton Mifflin Company, 1965, pp. 1009-1012; James L. Sundquist, Politics and Policy[:] The Eisenhower, Kennedy, and Johnson Years, Washington, D.C., Brookings Institution, 1968, pp. 135-137; Sar A. Levitan, The Great Society's Poor Law[:] A New Approach to Poverty, Baltimore, Johns Hopkins Press, 1969, pp. 13-18; and Patterson, America's Struggle against Poverty..., pp. 134-137.

47.  Advisory Committee on Standard Budget Research, "Report of the Advisory Committee on Standard Budget Research," Washington, D.C., U.S. Department of Labor, Bureau of Labor Statistics, Office of Prices and Living Conditions, June 1963, pp. 2-4.

48.  Mollie Orshansky, "Children of the Poor," Social Security Bulletin, Vol. 26, No. 7, July 1963, pp. 3-13.

49.  For a discussion of the July 1963 article and its genesis, see Gordon M. Fisher, "The Development of the Orshansky Poverty Thresholds and Their Subsequent History as the Official U.S. Poverty Measure" (unpublished paper), May 1992 — partially revised September 1997, pp. 2, 11-12, and 14-17. (This paper is available on the WorldWide Web at <http://www.census.gov/hhes/povmeas/publications/orshansky.html>.) 

50.  Orshansky, "Children of the Poor," p. 3.

51.  Orshansky, "Children of the Poor," pp. 8-9.

52.  Orshansky, "Children of the Poor," p. 13.