Friday , September 18 2020
Home / CEPR Blog / Should We Care How Many People LBJ Would Think are Poor Today?

Should We Care How Many People LBJ Would Think are Poor Today?

Summary:
In a new National Bureau of Economic Research (NBER) working paper, Richard Burkhauser and his coauthors argue that only 2.3 percent of Americans lived in poverty in 2017, if we define poverty in the way they claim “President Johnson defined it.” By comparison, the OECD put the US poverty rate at 17.8 percent using the ...

Topics:
CEPR Blog considers the following as important:

This could be interesting, too:

Karen Conner writes The Black-White Disability Gap Increases with Age

Karen Conner writes Multiple Jobholders: Who Are They and How Are They Impacted by the Pandemic?

Dan Beeton writes From a Broken Economy to a People’s Economy

Karen Conner writes Cutting State and Local Budgets is an Attack on the Country’s Black Workers

In a new National Bureau of Economic Research (NBER) working paper, Richard Burkhauser and his coauthors argue that only 2.3 percent of Americans lived in poverty in 2017, if we define poverty in the way they claim “President Johnson defined it.” By comparison, the OECD put the US poverty rate at 17.8 percent using the standard international measure of poverty, which sets the poverty line at half of median disposable income (about $34,000 a year for a family of four in 2017).  

To reach this conclusion, Burkhauser et al. make a long list of changes to the official poverty measure. Some of these adjustments are sensible. For example, they follow the international practice and use disposable income (including taxes and near-cash, in-kind benefits) to measure poverty. At least two other changes they make are controversial and problematic. First, they make inflation adjustments that have the effect of pushing down the value of the poverty line, compared to other relevant poverty lines, over the last half-century (to about $18,800 in 2017 for a family of four). Second, they count the dollar value of public and employer-sponsored health insurance as income. 

What does it mean to say only 2.3 percent of Americans live in poverty today, as LBJ supposedly defined it? Imagine two adults raising two children in 2017 on a disposable income of $19,000 without receiving any public or employer-provided health insurance. According to most Americans and any modern poverty measure, this family would not only be poor, they would fall substantially below the poverty line. Yet, according to Burkhauser et al., they are not living in poverty, as Johnson defined it.

Read More ...

Leave a Reply

Your email address will not be published. Required fields are marked *