How useful is the poverty line?

The Census released its supplemental poverty measurement today. The details are numerous, but the headline is that under the SPM, the number of impoverished people climbs to 49.1 million, 2.5 million more than the conventional poverty measurement. Under the SPM measurement — which takes into account government benefits, child support, and other factors — the number of impoverished people ends up shifting to and from different populations. For instance, much fewer children are considered impoverished under the SPM, and many more elderly are considered impoverished. Despite its efforts, the SPM falls prey to all sorts of problematic simplifying assumptions.

One could drone on endlessly — and indeed many do — about what methods should be used and what factors should be included in calculating the number of impoverished people. Although establishing a poverty line has some value, the heavy emphasis on it is very misguided. Trying to figure out some sort of minimal standard of living is great, but relying on it to talk about injustice is not so great.

Suppose tomorrow that we were able to lift every single American $1 above a legitimately-derived poverty line. This would of course be an improvement, but would we have solved the problem of economic injustice? Of course not. Yet, reliance on poverty lines in any sort of analysis falls prey to problems just like this. Some set of policies might lift a significant number of impoverished people who are right on the poverty line slightly above that line, and it would seem as if we had made a very significant stride in poverty reduction. But would we have really made significant improvements in the lives of the impoverished if we lifted a few million of those who are right on the line slightly above it? Not really.

What we should be talking about then, in addition to poverty, is inequality and individual capabilities. Lifting a few million people just above the poverty line would not significantly reduce inequality and would very marginally (if at all) increase the ability of those lucky few to lead more secure and fulfilling lives.

Economic justice is about a lot of things and poverty is certainly one of them. But poverty should not be the exclusive or even primary focus of statistical representations of economic injustice. In the United States where the dominant “left-wing” alternative to frightening right-wing ideologies is a form of pity-charity liberalism, poverty-focused discourse often predominates. However, that kind of discourse and focus is not nearly as useful as people think, and should probably be subordinated to broader discussion about income and wealth distribution.