Three Views of the Poverty Rate

Three Views of the Poverty Rate

There's a big new joint report from the conservative American Enterprise Institute and the liberal Brookings Institution on poverty and opportunity. It's packed with all varieties of policy analysis — education, marriage, etc. — but one thing that stands out is a simple chart showing three different ways of looking at the poverty rate:

I've written before about the difference between the official measure and the "Columbia" measure (also known as the anchored supplemental poverty measure). Basically, the official poverty rate does a poor job of counting money from safety-net programs; when you include that income, poverty appears to have fallen since the onset of the Great Society, rather than remaining stable.

Even the Columbia measure may shortchange the progress we've made against poverty, though, because the surveys it relies on underestimate the aid people receive. This brings us to the consumption-based poverty measure, which (naturally) measures how much people consume instead of how much they get paid. This approach doesn't always create low estimates; in the early 1970s, it sits right between the two other measures. But it shows dramatic improvement and a low poverty rate today. Even when the other rates are spiking, consumption poverty remains basically steady.

Maybe the War on Poverty was more successful than we realize. And maybe poverty is a more limited problem today than we might think.

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

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