A Poor Statistic

No one thinks that life below the poverty line (at just $22,350 for a family of four) is easy. But how bad is it, really?

That’s the question raised this week by a New York Times article. Although the number of poor Americans has officially risen by 10 million since the start of the recession, most poverty experts consider the statistic flawed because it fails to take into account assistance in food, housing and health. At the same time, the newspaper noted, the measure overlooks “the similarly formidable amounts” that the poor “lose to taxes and medical care.”

Image credit: Greg Groesch

On Monday, that may start to change. That’s when “the Census Bureau releases a long-promised alternate measure meant to do a better job of counting the resources the needy have and the bills they have to pay,” the Times reported.

[EXPAND More]Peter Drucker well understood that the only thing you can measure purely are physical phenomena, such as the rate of a falling stone. Whenever we stray into social territory, “the act of measurement is neither objective nor neutral,” he wrote in Management: Tasks, Responsibilities, Practices. “It is subjective and of necessity biased.”

When it came to poverty, Drucker’s observations coincided precisely with the points that current experts are making. “In terms of income America’s welfare recipients are doing quite well,” he argued in Managing in a Time of Great Change. “If non-cash benefits (e.g., food stamps or housing allowances) are included, the incomes of most are above the ‘poverty line.’”

In The New Realities, Drucker added: “In a modern society, poverty is far more a social than an economic condition.”

That didn’t mean, however, that Drucker didn’t see a real problem among those making little money. Despite the benefits they receive, Drucker asserted, many people “live in a squalor and degradation as bad as that of yesterday’s worst slums, if not worse.”

“The need for help—at least for temporary help—is surely going to grow,” Drucker predicted. “Developed and developing countries alike are undergoing major transformations of economy and society.”

What do you think: Is life below the poverty line better than most people think it is—or is it worse? And why?[/EXPAND]