Those 26 Million "Poor"

The "war on poverty" that Lyndon Johnson launched in the mid-1960s began winding down when Richard Nixon and the Republicans moved into the White House in 1969, but many signs of L.B.J.'s battle are still around. One of them is the U.S. Census Bureau's annual reckoning of how many Americans are "poor." The latest report, issued three weeks ago, was a shocker: it counted 12.3% of the total population--precisely 25.9 million Americans--as living at or below the poverty line, the highest percentage of poor since 1970. Worse still, there were 2.5 million more poor than in 1974, a record increase suggesting that a long period of decline in their number since the Eisenhower recession days of the late 1950s and early '60s had come to an end.

That poverty increased in 1975 is no surprise: that year saw the low point of the recent recession, with its idled factories and 8%-plus unemployment rates. But could there really be nearly 26 million "poor" in an economy that, even in a downturn, is more bountiful and broadly based than any other?

Lurid Picture. Measuring poverty is a peculiarly American compulsion. With the exception of Israel, no other country regularly assembles--and publishes--official statistics on its poor. Government interest in measuring poverty goes back to the 19th century, but today's system of annual reports began in 1965, when Congress decided that the flood of Great Society legislation demanded some useful yardsticks of prosperity. The result has been a system that is necessarily arbitrary and, some critics say, paints an unnecessarily lurid picture of U.S. poverty.

Basically, the statisticians define the poor by establishing a series of poverty-threshold incomes that are adjusted every year according to the inflation rate. For 1975, the poverty cutoffs ranged from $2,717 for a single person to $5,500 for a nonfarm family of four. But how are the numbers determined?

Deep down underneath a maze of statistical formulas designed to compensate for assorted variables such as sex, age, race, geographic location and family status, the definition of poverty rests on one bedrock invariable: people must eat.

In the mid-'60s, the statisticians decided to establish the poverty line for individuals and families simply by multiplying what it cost them to eat for a year by three. Why three? Because a 1955 survey of food spending habits showed that the average U.S. family spent about $1 of every $3 of income on food. Over the years, various refinements have been made in the system, most notably a linking of the poverty figures to all of the components in the Consumer Price Index, including fuel and clothing as well as food. Distinctions are also made for price differences in various parts of the country, and the fact that it generally costs less to live on a farm than it does in an urban area.

Still, Government statisticians themselves warn that poverty figures serve only as relative measures and not hard and fast pictures of reality. The '75 figures, for example, include only money income. They do not include such "in kind" payments as food stamps or the value of subsidized public housing. This sort of benefit increased during the recession, suggesting that the U.S. poor were better off in 1975 than their dollar-income numbers suggest.

The poverty figures are more than just an interesting--and imprecise --measure of the nation's wellbeing. They are used to determine, among other billion-dollar matters, which citizens are exempted from paying federal income taxes (almost all of those below the poverty line) and what communities receive federal school aid. A small rise in the poverty line, for example, could cause a shift of millions in federal education aid from the South to Northern states, as more low-income citizens in and around Northern cities officially joined the "poor." Thus, the poverty yardstick has become a policy tool as well as a measure, making further refinement in it all the more imperative.

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