“We have . . . almost half the people in the United States living in poverty.”
The Census Bureau calculates the poverty rate in different ways. Using the official poverty measure, 12.3 percent of U.S. residents were below the federal poverty line in 2017. Using the supplemental poverty measure, the rate was 13.9 percent. Biden says it’s much more: almost half the country.
We surveyed several leading researchers on poverty, and almost all agreed Biden was including people who are not poor.
The Biden campaign told us he was using the supplemental poverty measure (SPM) and counting every individual and family whose income was below 200 percent of the poverty line. That formula gets him to 140 million people, or 43.3 percent of the U.S. population in 2017.
Biden spokesman Andrew Bates said the Poor People’s Campaign, which hosted the candidate forum where Biden made these remarks, uses the same formula.
“Poverty spans every race, creed, color and sexual orientation,” the Rev. William J. Barber II of the Poor People’s Campaign said at the start of the forum. “... All of those numbers combined makes up 43.5 percent of this nation — not 30, not 23, but almost half of this nation — and any nation that ignores half of its people, half of the people, is in a moral and economic crisis that is constitutionally inconsistent, economically insane and morally indefensible.”
When Biden took the microphone, he echoed Barber: “Reverend, it’s not only that we have less than half the people in the United — almost half the people in the United States living in poverty — it’s ridiculous that we have this extreme, extreme, extreme change that’s going on. Deep inequities in our society. Our policy discriminates against and devalues black people, Native Americans, people of color, women, LGBTQ individuals, people with disabilities.”
But in the written materials the Biden campaign sent us, the Poor People’s Campaign is careful to note that the formula includes both “poor” and “low income” people. The two terms sound alike, but they describe different economic conditions. “Poor” includes those below the poverty line. “Low income” goes further, to twice the poverty line.
“Poverty policy researchers would not refer to the people with incomes at twice the poverty line or less as ‘living in poverty,’ ” Sandra K. Danziger, an expert on the subject at the University of Michigan, wrote in an email.
“It is wrong to say that ‘half the country lives in poverty,’ ” Robert A. Moffitt, an economics professor and poverty researcher at Johns Hopkins University, wrote in an email. “Only 12-14% live in poverty. The difference in poverty versus 200% of the poverty line is large.”
“I think it’s extremely misleading to say half the people in America are in poverty when you’re talking about twice the poverty line. It’s crazy to do that,” Ron Haskins, a leading poverty scholar at the Brookings Institution who helped the Census Bureau design the supplemental poverty measure, told us. “And that’s especially the case, because we have made great progress on poverty.”
Both of the Census Bureau’s poverty rates have been declining, Haskins said. Comparing the official poverty measure in recent years with the rates seen in the 1990s or late 1960s, the decline has been especially pronounced for African Americans, Hispanics and the elderly.
We traced Biden’s claim to an April 2018 report, a collaboration between the Poor People’s Campaign and other groups. The claim has since appeared in a Washington Post op-ed by Barber and Karen Dolan of the Institute for Policy Studies and an op-ed in the Guardian by Barber and the Rev. Liz Theoharis, also of the Poor People’s Campaign.
Their original report uses 2016 data, but the overall figures of roughly 43 percent, or 140 million people, held up in 2017. The Census Bureau has not released 2018 figures.
“By the Official Poverty Measure (OPM), more than 95 million Americans (nearly 30 percent of the total population) are either in poverty or considered ‘low-income’ (living below twice the poverty line),” the report says. “That number rises to 140 million people (43.5 percent) when using the SPM, which takes into account federal assistance resources, such as refundable tax credits, as well as critical out-of-pocket expenses for food, clothing, housing, and utilities. It also takes into account geographic differences in costs of living.”
The OPM was adopted in the mid-1960s and has garnered widespread criticism because it measures pretax income and food-purchasing power, updated yearly to account for inflation. That methodology, experts say, fails to capture many people struggling financially in modern society.
The Census Bureau responded with the SPM, which since 2011 has measured after-tax income, food costs and other necessities such as clothing, housing and utilities. The SPM accounts for geographic variations in the cost of living, includes welfare benefits such as food stamps and housing subsidies, and subtracts child-care expenses.
“Most researchers also think that the poverty line should be adjusted periodically for the standard of living in the country,” Moffitt wrote. “For example, today most people would say you’re poor if you don’t have enough money to even buy a cheap cellphone. Cellphones are a necessity of life today. But there were no cellphones in 1960, so people who like the OPM would say that people without a cellphone have more to eat than people in 1960 did, so poverty has gone down. And today’s low income families definitely have more to eat than most families in the 19th century. ... The SPM tries, instead, to adjust the poverty line for the changing definition of what ‘being poor’ means.”
But it’s not a flawless measure of poverty. As the nonpartisan Congressional Research Service noted in 2017, “Medical needs are not included in the SPM poverty thresholds.” The formula subtracts out-of-pocket medical expenses from household income when setting poverty thresholds, but it doesn’t add in the value of benefits such as private health insurance, Medicare, Medicaid or premium subsidies under the Affordable Care Act. Depending on medical needs, these benefits can swing a family’s fortunes.
“Both Medicare and Medicaid had a dramatic impact on the poverty gap between poor and middle-income people and the reason is that poor people get more benefits relative to their income than middle-income people do,” Haskins said.
“The key issue is that it is difficult to estimate the value of health needs and health insurance in a poverty measurement context,” Robert Paul Hartley, a researcher in the Center on Poverty and Social Policy at Columbia University, wrote in an email. Policy experts and the Census Bureau are researching ways to incorporate these health-care factors into the SPM, Hartley and Haskins said.
“There will always be strong critiques of any poverty measure, but as an indicator with comparable benchmarks over time, at least one can estimate a consistently validated metric of poverty that government, academic and policy communities have agreed upon,” Hartley said.
Hartley, who collaborated on the report from the Poor People’s Campaign, said “a 200-percent of SPM threshold definition of low-income families is constructive for considering how many families, individuals or children may be at risk of poverty or material hardship, especially when many lower-income families face volatile incomes across the year and are vulnerable in the event of an economic or health emergency.” We note that Hartley is writing in terms of “low-income families” who are “at risk of poverty,” not just the poor.
One of the authors of the Poor People’s Campaign report, Shailly Gupta Barnes, said counting only those people who fall under the SPM poverty line is “a meager estimate of poverty.”
“A four-person household with an income of $30,000 a year is not poor by this measure,” she wrote in an email. “The population living between 100-199% of the poverty threshold is designated as ‘low-income,’ but they are, in reality, just one emergency, health care crisis, traffic violation to themselves or a loved one away from being poor, and most likely will fall under that line over the course of the year. This is why we look at everyone living under 200% of the poverty threshold for the SPM — everyone who is poor and low-income.” (We would add a caveat here: Private or public health benefits, which are not factored into the SPM, would soften the financial blow in a health-care crisis.)
“The OPM poverty line for a family of four was $24,858 in 2017,” Moffitt wrote. “Twice that is $49,716, or almost $50,000. There are a lot of U.S. families with incomes in the $25,000 to $50,000 range. Most researchers do not count them as ‘poor.’ The term ‘low income’ is more vaguely defined. Maybe $50,000 is low income? I am not sure.”
The U.S. median household income was $61,372 in 2017, according to the Census Bureau.
Bates, the Biden campaign spokesman, said: “As a lifelong champion of working families, economic dignity, and inclusion, alleviating poverty is a sacred goal to Joe Biden and he firmly believes we must never ignore the complex multitude of financial hardships that make up the burden of poverty. He salutes Reverend Barber and the Poor People’s Campaign for the indispensable work they do every single day and for the call to action they have issued to the entire country.”
Is someone poor because they can’t afford basic necessities? Or because they can’t afford the same lifestyle as the average American, even though they provide for their household? Using a relative measurement, someone could be counted as poor, start making more money, and still be counted as poor because those at the top pushed up the average. The CRS report noted, “The SPM includes aspects of both relative and absolute measures in its computation, and gauging whether the SPM is closer to one or the other is an unresolved question.”
The Pinocchio Test
Biden is flat-out wrong to claim that half the country is living in poverty. The three independent experts we surveyed, all of them leaders in the field of poverty research, did not hesitate to criticize his math and rejected the notion that all people below 200 percent of the poverty line should be counted as poor.
Meanwhile, the researchers who collaborated on the formula Biden is using are careful to indicate that it covers both poor and low-income people. They do not treat the two terms as interchangeable. Barnes and Hartley said they were measuring Americans under the poverty line and those at risk of falling into poverty for a spell.
Biden’s campaign repeatedly pointed us to Barber’s comments and materials from the Poor People’s Campaign, but he made the claim as well, and we always warn politicians that they’re responsible for their words.
We were on the fence between Two and Three Pinocchios. The researchers behind the report from the Poor People’s Campaign make a reasonable argument that some people above the poverty line may fall under it because of circumstances beyond their control.
But after putting it all together — the progress in lowering poverty rates that Haskins mentioned, the broad spectrum between poor and low-income households that Moffitt pointed out, the CRS report’s finding that the supplemental poverty measure does not account for private or public health benefits, and the overall hazy and exaggerated image that emerges — we landed on Three Pinocchios.
As a presidential contender with a long record in politics, Biden surely knows that precision is key for policymakers.
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