America Is Poorer Than It Thinks

https://www.bloomberg.com/opinion/articles/2018-11-26/poverty-in-america-greater-than-statistics-indicate
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What does it mean to be poor? Currently there are two basic ways to define poverty. To get a better measure of who needs help — and a better sense of how to provide it — society needs a third definition.

The first definition is absolute poverty — essentially, material destitution. Human beings need food, water and shelter, and if we can’t afford these things, life is pretty miserable. In the U.S., the federal government has poverty guidelines that are based on food consumption: If you make less than about three times the minimum amount people need to spend on food each year, you’re poor.

By this measure, a single adult living on $12,140 or less is considered poor as of 2018. For a family of four, the figure is $25,100. There is also a Supplemental Poverty Measure that includes not just food but clothing, shelter and utilities. Thanks in part to increased government assistance, U.S. poverty according to this measure has fallen, especially for children.

Critics of the federal poverty guidelines argue that these numbers are too low, thanks to growing inequality — in the 1960s, the federal poverty level was about half of the median income, but is now well below that. Moreover, as a country grows richer, hunger becomes less common, so using it as measure of poverty becomes less useful. When the middle class is defined by having “a chicken in every pot and a car in every backyard” (a campaign slogan from 1928), then simply having a chicken would seem to indicate that you’re not poor. But when your middle-class neighbors have several cars, several televisions and spacious homes, you might feel poor.

This is where the second measure — relative poverty — comes in. The Organization for Economic Cooperation and Development defines poverty this way: If you earn less than half of the median income, you’re poor. By this measure, the U.S. is doing a bit worse than other rich countries:
Poverty Is Relative

By one measure, the poverty level in the U.S. is higher than in many other wealthy nations

Source: Statista.com

Data from 2015.

But this, too, feels unsatisfying. Imagine a future U.S. in which the median American is fabulously wealthy — with flying cars, robot servants, and multiple overseas vacations every year. Should someone with half as many flying cars, robot servants and overseas vacations be considered poor? That seems like a stretch.

Intuitively, then, it seems that a third definition of poverty is necessary — one that measures more than just material well-being but also takes into account economic growth.

Luckily, there is just such a concept: It’s called material security. Psychologist Abraham Maslow believed that safety ranked second only to food and shelter as a basic human need. Someone who has food and a roof over their head today, but doesn’t know whether they will tomorrow, should be considered poor.