Food costs were based on the Department of Agriculture’s “economy” food plan. This diet itemized the cost for food in temporary or emergency situations. This calculation was developed during the 1950s in response to concerns for disas-ter planning, particularly in the event of nuclear war. The diet was not meant as a long-term food plan but rather as the minimum needed to get through an emer-gency. The other statistic available at the time was the Department of Agriculture’s assessment that the average family spent one third of their income for food. There-fore, the line was developed using the estimate for the economy food plan and mul-tiplying that by three.
However, absolute and relative costs have changed over the years. Because of growth in other family expenses such as housing and health care, food requires less than one fifth of a typical necessity budget, not one third (Bernstein, Brocht, & Spade-Aguilar, 2000). Figure 8.1 demonstrates this relationship. Consider that a fam-ily of four needs $500 a month for food. If the 1960s relationship of one third were used, then the entire family monthly budget would be calculated to equal $1,500 ($500 is one third of $1,500). But if the more current proportion of 17 percent is used, then the entire family budget would equal $2,941 ($500 is 17 percent of were used $2,941). The SSA budget also did not address other needs that are costly today, such as health care, child care, and transportation. In the administrative view of what the typical family of the 1950s and 1960s looked like, there were two parents and the mother stayed at home; therefore, there was no child care cost in dollar terms. Furthermore, most people lived in the cities where factories and businesses were clustered, so they had access to employment and public transportation. Now, many workers live far from viable jobs and need a car to get to work. In addition, health care costs have risen dramatically over the past 20 years and people today pay more out-of-pocket costs than previous generations. Although the cost of food has gone up, other expenses have too, and the proportions for family budgets have changed.
The change in living costs in the almost 50 years following the creation of the poverty threshold means that the absolute line below which people are officially recognized as poor is proportionately much lower than when it was developed. If a new line were to be constructed based on the typical cost of food in relation to the other costs of living, and took into account the dramatic increases in child care and health care, many millions more people would be officially counted as poor in this country.
Another way to examine the validity of the poverty threshold is in comparison to the income of a typical household. The poverty line in the 1960s for a family of four was almost half of the median family income. Today it has dropped to 29 percent (Mishel, Bernstein, & Allegretto, 2007). Changing the poverty line to reflect changes in economics would have an immediate impact on how many peo-ple are categorized as poor. For example, if the poverty line were 25 percent higher, 12 million more people would be counted as officially poor, raising the rate more than 4 percentage points (U.S. Census Bureau, 2007). Such an immediate increase is a strong disincentive for policy makers to change the measure.
Why is an absolute measure used instead of a relative measure? Although many assumptions and values go into both determinations, in the end the absolute measure is fixed and less debatable. Viewing poverty from a relative perspective