Washington – The Census Bureau on Tuesday will release the latest statistics on poverty in the United States, the income level of an average household and the number of Americans still lacking health insurance.
Don’t believe the numbers.
A growing chorus of experts and politicians is raising questions about the data that frame Americans’ understanding of their nation’s well-being. From poverty levels to health insurance, inflation to personal savings, widely accepted statistics are overstating some problems and understating others, miscounting people and sending policymakers down blind alleys.
“We’re getting at best an impressionistic sense of what’s going on in the economy,” said Rep. Rahm Emanuel, D-Ill., who recently introduced legislation to establish an independent commission aimed at overhauling government economic statistics. “Major policy decisions are being made based on data that is inadequate to the task.”
This seemingly technical problem has real-world consequences, allocating federal assistance to some who don’t need it while cutting off others who do, raising the costs of programs such as Social Security or pushing policies for problems that may not exist.
For example, since poverty levels are not adjusted for regional costs of living, the working poor in expensive urban centers such as Washington are routinely excluded from federal programs because their income lifts them above the official poverty line. The rural poor in low-cost states such as Arkansas often can afford considerably higher standards of living than their urban compatriots. Yet they may be eligible for food stamps, housing aid, free school lunches and other programs that exclude urban dwellers.
In March, Michelle Billups, 42, began working full time in the dining hall of the Washington charitable group So Others Might Eat.
She earns $8 an hour to support herself and her 17-year-old daughter, Shannon. This month, Billups was told she is no longer eligible for $225 in food stamps, a program available for Washington residents with incomes up to 130 percent of the federal poverty line. Billups’ $16,640 annual income is $153 higher than that threshold for a family of two.
In a study to be released Thursday, the liberal Economic Policy Institute estimates a family like Billups’, with one parent and one child, requires an annual income of $47,460 to meet its basic needs in Washington. That family in Fayetteville, Ark., would need $24,096.
Perhaps no statistic has more critics than the poverty rate, which in 2003 stood at 12.5 percent, the latest census data available.
University of Chicago economist Robert Michael, who led a National Academy of Sciences panel tasked to update poverty statistics a decade ago, called the poverty data “truly awful.”
“The poverty statistics are absolutely wrong,” agreed Rebecca Blank, dean of the University of Michigan’s school of public policy, who served on the panel.
Officially, the poverty rate has drifted upward since 2000, from 11.3 percent to 12.5 percent in 2003. But a more sophisticated measurement that the census also publishes, which accounts for variable costs of living, rising medical expenditures and more accurate price inflation, shows the official rate has consistently understated poverty.
By that alternative measure, the percentage of Americans below the poverty line has risen from 12.8 percent in 2000 to 14.2 percent in 2003. At the same time, household incomes might be understated because they do not include non-cash income such as food stamps.
