Poverty indexes are determined by pretax money income only and are adjusted annually for changes in the national cost of living, as reflected by the Consumer Price Index for urban dwellers. The official poverty threshold for a family of four, for example, has grown from $2,973 in 1959 to $22,314 in 2010. However, the indexes and thresholds are not adjusted for regional differences in living costs. Consequently, since the cost of living in the Chicago metropolitan area is 18% greater than the national average for all urban areas, 23% greater in Los Angeles/Long Beach, and 140% greater in New York City, poverty is substantially underestimated in each of the three most populous urban centers.
Counts and incidences of U.S. poverty are constructed from definitions and procedures adopted by the Bureau of the Census. These official estimates are universally employed by governmental agencies at all jurisdictional levels and have been used consistently since their original development by the Social Security Administration. In 1969, the Bureau of the Budget (now the Office of Management and Budget) formally prescribed the poverty thresholds as the official standard to be used by all federal agencies.
Yet, the estimates have been criticized and been modified over the years by several federal inter-agency committees. Some major points of criticism that still remain include that non-cash benefits (such as food stamps, school lunches, health benefits, subsidized housing, income-in-kind, and deferred benefits) as well as assets are excluded from the determination of poverty status; either median income or disposable income would be a more appropriate benchmark for poverty; money income is under-reported by recipients; inter-household transfers are unreliably estimated; intra-household transfers are ignored; poor Blacks, Hispanics, and the homeless are particularly undercounted; the mix and cost of a nutritionally adequate diet needs to be updated.
Nevertheless, as stated by Wendell Primus, “The real importance of a ... poverty measure is not the number who is poor in any one year but the indicator’s ability to show whether the number is decreasing or increasing over time.” Despite modifications and numerous criticisms, it appears that the Census Bureau will continue to use the present definition of U.S. poverty and its methods of tabulation for the foreseeable future.
There can be a wide variety of economic, social, psychological, and chance influences on the levels, trends, and divergences of the rates of poverty. Further, exogenous common factors may likely have affected the individual demographic groups in distinct ways. For example, a period of economic contraction does not provide a blanket of uniform hardship upon all subgroups.
Ultimately, the end goal is to prevent and counteract those factors that cause poverty. The factors are likely to have time-, location-, and group specific influences.
1. According to the passage, which of the following is true regarding U.S. poverty definitions?A. Federal poverty estimates and definitions have gone unchanged since 1969.
B. Despite heavy criticism, poverty indexes have not been adjusted for the national cost of living for many years.
C. Subsidized housing has recently been included in the determination of poverty status.
D. The current definition of poverty has shown that the number of poor has increased recently.
E. A city with a cost of living below the national average would have its poverty level overestimated.
2. In the fourth paragraph of the passage, the author is concerned primarily withA. responding to critics who claim the poverty level in the U.S. has risen
B. pointing out an argument against the assertion that the current definition of poverty in the U.S. can be measured
C. suggesting a reason behind the persistence of the current definition of poverty in the U.S.
D. tracing the recent history of the Census Bureau’s stance on the definition of poverty in the U.S.
E. discussing the implications of a radical modification of the current definition of poverty in the U.S.
3. According to the passage, which of the following would NOT be considered an improvement to the current definition of poverty by one of the critics mentioned in the passage? A. Include health care benefits in the determination of poverty status.
B. Include owned vehicles and real estate in the determination of poverty status.
C. Determine poverty status by using a family’s income before taxes have been taken out of it.
D. Instill a method to increase the accuracy of reported money income by recipients.
E. Conduct a review of whether the current allotment of money for food is sufficient to buy healthy food.
4. Which of the following statements can be inferred from the passage?A. The Consumer Price Index is the most accurate measure of the national cost of living.
B. The Bureau of the Budget had its name changed to reflect its expanded role in managing welfare programs.
C. Of the poverty in all U.S. cities, the poverty in New York City is the most underestimated.
D. The number of poor Blacks and Hispanics is larger than the number of poor whites in most U.S. cities.
E. During a recession, certain groups that fit the federal definition of poverty suffer less economic hardship than do other groups.
12 Sep 2025, 11:01
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