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Thrifty Food Plan) designed by the U.S. Department of Agriculture (USDA) for families of different sizes and compositions and then multiplying the cost by a factor of three. This approach was based on analysis of the 1955 Household Food Consumption Survey, which showed that food consumption represents one-third of family income (orshansky, 1963, 1965). Official poverty thresholds are derived by using the Consumer Price Index (CPI) to update this measure annually.
Over time, several criticisms of official poverty statistics have emerged, each with different implications for estimating the prevalence of poverty. The first type of criticism is conceptual and questions whether absolute measures of poverty truly reflect what is meant by being poor in U.S. society. Alternative poverty measures include both relative and subjective measures and may better reflect current living and consumption standards (Ruggles, 1990). However, such measures rarely have been considered official measures of poverty.
A second and more common criticism of official poverty statistics focuses on the specific components used to construct the poverty thresholds (Lewit, 1993; NRC, 1995; Ruggles, 1990). Three specific issues are important. First, current poverty thresholds are based on 1955 food consumption and expenditure patterns and do not reflect the resources required for a minimally adequate standard of living today. Second, measures of family income do not account for in-kind benefits such as food stamps, free or reduced-price school meals under the child nutrition programs, donated USDA commodity food, Medicaid, and public housing subsidies, nor do they consider fixed expenses, such as child care and child support, taxes, housing, and medical expenses. Since the 1960s, when the poverty concept was introduced, there has been tremendous growth both in the value of benefits from in-kind programs and in fixed expenses.
Finally, the CPI, as opposed to an index based on the price of food, is used to update poverty thresholds. If poverty is theoretically linked only with having a minimally adequate amount of food, then official poverty statistics will over-state the prevalence of poverty during periods of rapid inflation in the price of nonfood items. In addition, use of the CPI alone to update poverty thresholds ignores the substantial geographic variation in the cost of housing.
Despite considerable controversy over official poverty thresholds and statistics, the measures in use form the basis for determining the size of the population in need, designing and evaluating antipoverty programs, and assessing economic well-being over time. Poverty guidelines used as the basis for determining income eligibility in the WIC program are those published annually by the U.S. Department of Health and Human Services (Federal Register, February 19, 1994, 59(28):6277–6278).