Making Poverty Relative

...Perspectives MAKING POVERTY RELATIVE BY HARVEY D. SHAPIRO Since last summer, when President Nixon began urging the adoption of a "family assistance plan" which would furnish $1,600 a year to a household of four, a variety of proposals have been put forth for replacing the hopelessly confused welfare system with some form ot guaranteed income The President's Commission on Income Maintenance Programs, for example, has called tor payments of $2,400 a year, while a recent White House conference asked for $5,500 The basic principle of providing an income floor for everyone has gained a remarkably wide acceptance in Congress, too So it seems more than likely that some sort of annual guarantee, once considered unthinkable, is now inevitable Not surprisingly, therefore, m current welfare discussions much of the emphasis is shifting to a consideration of the amount of money that can and should be given the needy And almost always the frame of reference is provided by the Poverty Index, that widely used measurement created by the Social Security Administration in 1964 to define, officially, who is poor and who is not The scale is based on the Department of Agriculture's calculations of the cost of a temporary, nutritious, low-budget diet for households of various sizes, adjusted periodically to reflect price changes Since food purchases typically represent one-third of the expenses of a low-income family, the Index is simply the food budget multiplied by three Obviously, any measurement that designates people who earn $10 less than a certain figure as poor, and those who earn $10 more as non-poor, is highly arbitrary True, it is equally apparent that some definition of poverty is necessary for purposes of discussion, analysis and legislation What is unfortunate, however, is that the Federal government has adopted an absolute rather than relative criterion A relative view of poverty would take into account the income distribution throughout the country For unlike parts of India—where destitution is often an absolute condition—few here are starving and sleeping in the streets (or so we had assumed until recently), and many observers believe that given our affluence, the Umted States could easily sustain a higher standard of living—perhaps the world's highest They argue that there Harvey D Shapiro is a consultant to the President's Commission on Income Maintenance Piograms need not be a Hough in Ohio, when there is a Shaker Heights, a Bedford Stuyvesant in New York when there is a Scarsdale, nor a West Side ghetto in Illinois when there is a Lake Forest But because this approach gauges the poor by their distance from the rich, and the rich prefer to stay out of the picture, discussions of American poverty have been held withm the narrow context of such concrete yardsticks as the Index At a modest national standard of living, the Poverty Index offers a reasonable line of demarcation With general prosperity, tastes not only go from hamburgers to chuck steak to T-bones, but the growing affluence also means that a declining portion of family income is spent on food In other words, while the definition of a poverty mcome remams fixed at three times the cost of food, an ever larger number of financial demands have nothing to do with eating Moreover, as the overall level of well-being improves, both public and private standards of living are raised The President's Commission on Income Maintenance Programs points out, for instance, that increased prosperity means, among other things, the upgrading of city housing codes, and the poor must either pay more rent or better the modest homes they own When much of the community can afford automobiles and moves to the suburbs, urban transportation is allowed to deteriorate and the poor must obtain the wherewithal to buy cars or pay for taxis If a city "enriches" its public school curriculum, the children of the poor must find money for special assembly programs and field trips, or to buy a gym suit instead of just a pair of sneakers And while upper-class demands for greater municipal services raise local taxes, those best equipped to pay them live outside the city hmits In short, with a rise in the general standard of hving, the poor are forced to adopt ever more expensive consumer patterns merely to retain then relative position and remain a funotionmg part of the community Struggle as they may to acquire the items on an expanding list of "necessities," they nevertheless find it more and more difficult to enjoy any of the more costly amenities of American life Even though the median family income in the country has increased by about 60 per cent since 1959, the poverty line has risen only 20 per cent Thus, despite allowances m the Index for changes in the cost of living, the "poverty gap" has been widening During the 1960s, this was not overly significant With median income at about $8,000 and the poverty line near $3,200, the average family was obviously better off than the poor one, but both continued to allocate their finances withm the same basic framework By 1975, however, the median income is expected to be approximately $15,000 for a family of four, while the poverty line will climb to roughly $4,500 Once that point is reached, those below the poverty fine will have consumer opportunities radically different from the average American's, and consequently will be forced into a vastly dissimilar life style As the poor continue to be spending most of their money on basics, the majority of the nation will be thinking of long vacations, second homes, third cars, fourth television sets, and so on Clearly, the fixed definition of poverty becomes obsolete as society improves its standard of livingand a guaranteed income program geared to the Poverty Index, or another absolute measurement, is doomed to cause the poor to fall ever further behind For a "family assistance plan," or any other program, to be administratively effective and socially just, it must interpret poverty on a relative scale A minimum subsistence level should not be figured at three times the cost of a cheap food budget, but rather against the median American family income...