Yet general agreement about basic needs does not mean that everyone agrees about the level of consumption that distinguishes a state of poverty from a state of adequacy. Thus, there is a question about how much food, shelter, and clothing distinguish a person in poverty from one who is not in poverty. This question cannot be answered in the abstract. No concept of economic poverty, whether ours or another, will of itself determine a level for a poverty threshold. That determination necessarily involves judgement. Moreover, as we show below and in Chapter 2, no matter what the particular concept, the determination of a poverty threshold invariably considers people's actual spending patterns and hence, inevitably, has a relative aspect.
Under our threshold concept, we propose that the values for food, shelter, and clothing—the basic bundle—and for a small amount of other needed spending—the multiplier—be developed by direct reference to spending patterns of American families below the median expenditure level. More important, we propose that real changes in spending on food, clothing, and shelter be used to update the poverty thresholds each year. By so doing, the thresholds will maintain a relationship to real changes in living standards, but only to the extent that these changes affect consumption of basic goods and services that pertain to a concept of poverty, not all goods and services. In this sense, our concept is quasi-relative in nature.
Because the most judgemental aspects of any poverty measure concern the reference family threshold, there is a danger that the need to improve the official measure may founder on debates about the "right" concept and level of that threshold. (We do not recommend a particular value for that threshold; rather, we suggest a range within which we believe it could reasonably fall.) It is important that a threshold concept satisfy the criteria we outline below and that the level chosen for the threshold is credible, but other characteristics of a poverty measure are equally or more important. Significant improvements will result in the accuracy of official U.S. poverty statistics by implementing our recommendations for adjusting the threshold along the three dimensions of family composition, geographic location, and time period and by implementing our recommended definition of family resources. It is in these recommendations that we are confident that the new measure of poverty is a considerable improvement over the current official measure.
Finally, by focusing on and recommending a specific measure of economic poverty, as we do, we do not advocate the idea that there is but a single measure of economic deprivation that should be featured as sacrosanct in policy evaluations. Rather, we urge the Census Bureau to develop reports on a range of poverty statistics, just as the Bureau of Labor Statistics (BLS) publishes a range of unemployment statistics in addition to the official unemployment rate. Examples of such useful poverty indicators, in addition to the poverty rate itself, would include measures of the intensity of poverty in terms of the average income and distribution of income of the poor.