# Is $18,400/year (for 4) a fair or realistic "poverty line"? **URL:** \ **Category:** Great Debates\ **Created:** [July 9, 2006, 12:56pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724 "2006-07-09T12:56:18Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Sarahfeena](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sarahfeena/32/519_2.png) [@Sarahfeena](https://boards.straightdope.com/u/Sarahfeena)\ **Post date:** [July 9, 2006, 6:44pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/21 "2006-07-09T18:44:21Z")
I don’t think that the amount of income that defines “poverty” can possibly be pinpointed without taking into account where the family lives. On another board, I got into a discussion about how much childcare costs in different parts of the country. People from smaller cities or more rural areas were astounded at how much I pay for childcare…and I don’t pay that much for this area. Our housing prices are so high here, relative to some other places, that If I paid any less, my childcare provider wouldn’t be able to afford to live in her house (and neither she nor I live very large.) I didn’t want to get into salaries at all, but the following soon became clear during the discussion: 1) My household income is relatively high 2) My lifestyle and housing are pretty average, if not a little lower-level than those I was discussing this with (no iPods in this house!) Some of them were paying literally 1/5 of what I pay for childcare, and said that if they had to pay any more, they wouldn’t be able to afford to work. So, if the actual dollar amounts meant anything, how could they possibly be living the same lifestyle as me, when I can afford to pay 5 times what they do for things? In this area, it would be impossible for a family of 4 to live on $20 grand. Literally impossible, unless they were getting free housing. I have seen on those house-buying shows on TV that a house that costs $90,000 in Tulsa costs $750,000 in Seattle. People buying those houses in both places are middle-class people…so middle-class incomes have to be a lot more in Seattle than they are in Tulsa, right? ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [July 9, 2006, 8:31pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/22 "2006-07-09T20:31:56Z")
[QUOTE=BrainGlutton] BTW, **Sam,** how is “poverty” officially defined in Canada? [/QUOTE] Canada doesn’t have an official poverty line - just various thresholds for government services. I like the definition of poverty from [this cite](http://www.fraserinstitute.ca/shared/readmore.asp?sNav=pb&id=216): > [@](#): > > In 1992, Poverty in Canada proposed an alternative measure of poverty based on the costs of a list of necessities. This approach is founded on the belief that poverty is a serious predicament. It means (and has always meant) insufficiency and discomfort. It conjures up images of hungry children and inadequate housing. Anyone who is concerned about poverty should want to know how many of our fellow Canadians simply cannot afford the basic necessities of life. This is the sole purpose of the basic-needs approach. I think advocates for the poor do them a disservice when they try to define the poverty line upwards for political purposes. All that does is give fodder to the ‘Rush Limbaugh’ types who can go out and find someone below the ‘poverty line’ living comfortably. It diminishes the term and makes it useless. The poverty line should be based on the ability to get absolute necessities in life. Living substantially below it should mean tremendous hardship, and substantially above it should mean a comfortable if not well off existence. By that standard, $18,000 seems about right to me, albeit a bit on the low side. You could convince me that it should be maybe $22,000-$24,000 in some areas, but not much higher than that. The Fraser report I linked to has some interesting tables in the PDFs, breaking down the cost of a whole host of necessities to come up with a minimum standard of living for various geographic areas. They tried to make comprehensive lists of everything a family needs, then pro-rate it into a monthly cost. For example, they’d take the cost of three mattresses, divide by the lifespan, and come up with an annual ‘mattress cost’. For example, let’s look at some numbers for Edmonton, from 1997: Annual costs for a family of four: Apartment (3 bedroom average): $7116 Food: $5865 Public Transportation: $898 Heath care (non covered): $580 Personal Care: $456.98 Furniture and sundries: $298 Telephone: $296 Household insurance: $221 Cleaning Supplies: $159 Laundry: $81 Plus a few more items. Basically, it comes out to around $20,000, a little higher in larger areas, a little lower in rural areas. Add in some amount per month for entertainment, some electronics (I think it’s reasonable to include a basic computer, internet connection, and basic cable, for instance), and you’re looking at somewhere under $30,000. Maybe $26,000-$28.000. Bear in mind that in Canada at that time, our dollar was only worth .71 US or so, and a lot of staples in Canada are significantly more expensive than they are in the U.S. An $5 paperback book in the U.S. will be $7 or $8 in Canada. A $15,000 car will be $22,000 here. Etc. So if we come up with a basic poverty-line income of say $28,000, then we have to subtract the various social programs that are available to low income people - GST credits, child care credits, low income housing subsidies, etc. And a $28,000 income for a family of four isn’t that hard to achieve on minimum wage, because both parents can work, and the kids can also work once they get to age 12. My brother and I both had part-time jobs from age 12 on. First delivering flyers and newspapers, then working in placing like bottle depots, then box boy in grocery stores, casual labor on construction sites, etc. It was a good experience and allowed us to pay our own way, buy our own clothes, pay for our own entertainment expenses, and save a little for college. A paper route around here pays about $100-$150 per month. If two kids have paper routes, that’s as much as $3,000 per year. Add in come casual labor and other creative ways to make a little money (My cousin and I used to walk ditches in the countryside and collect bottles thrown out of cars. In the winter, we went door-to-door offering to shovel walks for a dollar. And there was always babysitting), and the kids can keep themselves in pocket money and help contribute to family finances. My family made significantly less than $28,000, by the way. We did alright. My mom even managed to buy a little duplex house and eventually sold it and bought her own little country store, and later sold that to give her a nice retirement nest-egg. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [July 9, 2006, 9:23pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/23 "2006-07-09T21:23:10Z")
[QUOTE=Sarahfeena] I don’t think that the amount of income that defines “poverty” can possibly be pinpointed without taking into account where the family lives. [/quote] The [living wage movement](http://www.livingwagecampaign.org/) does take account of that, and pushes for different minimum-wage levels in different regions. ---
**Author:** ![aruvqan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aruvqan/32/2891_2.png) [@aruvqan](https://boards.straightdope.com/u/aruvqan)\ **Post date:** [July 9, 2006, 10:53pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/24 "2006-07-09T22:53:19Z")
[QUOTE=What Exit?] Gas could not possibly cost you $400 per month, but as long as you like where you are living, by all means, pay for the short commute. Jim [/QUOTE] I have no idea where you live, but I drive a car that takes 13 gallons to fill up, at 3.15/gallon [what I paid on the way home today. That makes a single tank of gas cost basically $40US. I actually go through about 2 full tanks in a week [5 days commuting 100 miles per day, and a squidge left over if i need to run out on my day off and get groceries or something] so some of us with cars that get 30 miles to the gallon can actually go through $400 a month in gas. Even if you had a shorter drive, if the mpg on the car is worse than 30MPG, and/or the gas is more expensive, then a $400/month is still not out of the question. ---
**Author:** ![Sarahfeena](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sarahfeena/32/519_2.png) [@Sarahfeena](https://boards.straightdope.com/u/Sarahfeena)\ **Post date:** [July 9, 2006, 11:00pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/25 "2006-07-09T23:00:27Z")
Yes, gas can easily cost $400 per month. I have to live relatively far away from my job, because it is in an even more expensive suburb than I live in, and with the longish commute, I easily spend $400 per month on gas. Cheaper than living in the pricey suburbs, though. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [July 9, 2006, 11:47pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/26 "2006-07-09T23:47:37Z")
[QUOTE=Sam Stone] Canada doesn’t have an official poverty line - just various thresholds for government services. [/QUOTE] That makes sense for the purposes of the agencies providing those services. Nevertheless, my respect for Canada’s government dropped half a notch. You mean there’s no general measurement even for statistical purposes? ---
**Author:** ![Dracona](https://avatars.discourse-cdn.com/v4/letter/d/ea5d25/32.png) [@Dracona](https://boards.straightdope.com/u/Dracona)\ **Post date:** [July 10, 2006, 12:20am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/27 "2006-07-10T00:20:42Z")
This is going to be extremely choppy (and unedited,) but I am rushed: My family of three definately struggled while my husband was working one job and earning $29000. But we were living beyond our means at the time. - subtract payments on two new cars plus insurance: - $8100 annually - subtract high-speed internet and cable: $1000 annually - cell phones - $1000 annually If you removed those costs, then $19000 would have been sufficient. Still, I was spending $5400 annually on preschool (which was not necessary) and paying 300 a month to live in a new 1300 sq ft trailer in the student mobile home park. If you were to subtract that as well, then our family of three would have had food, clothing, and shelter for $15000 a year. (We would have needed to add at least $1500 a month for subsidized housing and another $3000 for basic utilities.) It’s a bare bones existence, and certainly not what we dream of, but the allowances of our poverty level are adequate. (And I almost forgot that our "entertainment and cigarette costs were at least $2500 annually as well.) Technically, We could have lived on a single $6.50 per hour full-time job. It would have been unpleasant as hell, but we could have done it. ---
**Author:** ![What\_Exit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/what_exit/32/10652_2.png) [@What\_Exit](https://boards.straightdope.com/u/What_Exit)\ **Post date:** [July 10, 2006, 12:56am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/28 "2006-07-10T00:56:17Z")
[QUOTE=aruvqan] I have no idea where you live, but I drive a car that takes 13 gallons to fill up, at 3.15/gallon [what I paid on the way home today. That makes a single tank of gas cost basically $40US. I actually go through about 2 full tanks in a week [5 days commuting 100 miles per day, and a squidge left over if i need to run out on my day off and get groceries or something] so some of us with cars that get 30 miles to the gallon can actually go through $400 a month in gas. Even if you had a shorter drive, if the mpg on the car is worse than 30MPG, and/or the gas is more expensive, then a $400/month is still not out of the question. [/QUOTE] My location is listed 😉 Sorry for the offhand remark, I thought few people exceeded my commute of over 400 miles per week. I average only about 25 mpg and it cost me around $2.93 per gallon for regular here in Central Jersey. My cost is around $216 per month for the commute. Getting up to $400 is rare without a gas hog of a vehicle. Even the commute you described at the prices you described should only be around $231. 22 work days on average in a month. {2200 miles / 30mpg \* $3.15 = $231} I will stand by my statement on this one. Jim ---
**Author:** ![Dracona](https://avatars.discourse-cdn.com/v4/letter/d/ea5d25/32.png) [@Dracona](https://boards.straightdope.com/u/Dracona)\ **Post date:** [July 10, 2006, 1:34am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/29 "2006-07-10T01:34:48Z")
[QUOTE=What Exit?] My location is listed 😉 Sorry for the offhand remark, I thought few people exceeded my commute of over 400 miles per week. I average only about 25 mpg and it cost me around $2.93 per gallon for regular here in Central Jersey. My cost is around $216 per month for the commute. Getting up to $400 is rare without a gas hog of a vehicle. Even the commute you described at the prices you described should only be around $231. 22 work days on average in a month. {2200 miles / 30mpg \* $3.15 = $231} I will stand by my statement on this one. Jim [/QUOTE] But he just said that his vehicle **WAS** a gas hog (13 mpg, NOT 30 mpg.) When my family first moved to Florida, my husband and I had schedules so dramatically different that we were required to drive two vehicles each day. We each averaged about 25 mpg, but our total mileage each day was about 180 miles. (The closest immediate jobs we could find were in the next county.) Even at $2.00 a gallon, we were spending around $375 a month on gasoline. (180 miles x 6 (days) x $2.00 per gallon / 25 mpg) x 4.33 (weeks per month on average) Today (were around 2.85 per gallon) that commute would cost us $533.11. Someone getting 13 mpg at $3.15 per gallon and driving 500 miles per week would spend $524.60 per month on average. ---
**Author:** ![Dracona](https://avatars.discourse-cdn.com/v4/letter/d/ea5d25/32.png) [@Dracona](https://boards.straightdope.com/u/Dracona)\ **Post date:** [July 10, 2006, 1:37am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/30 "2006-07-10T01:37:37Z")
[QUOTE=Dracona] Today (were around 2.85 per gallon) that commute would cost us $533.11.QUOTE] Today ( **We’re** around 2.85 per gallon) that commute would cost us $533.11 ---
**Author:** ![What\_Exit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/what_exit/32/10652_2.png) [@What\_Exit](https://boards.straightdope.com/u/What_Exit)\ **Post date:** [July 10, 2006, 1:48am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/31 "2006-07-10T01:48:23Z")
[QUOTE=Dracona] But he just said that his vehicle **WAS** a gas hog (13 mpg, NOT 30 mpg.) …snip… Someone getting 13 mpg at $3.15 per gallon and driving 500 miles per week would spend $524.60 per month on average. [/QUOTE] Of course there are exceptions, but if you reread **aruvqan** , he/she states “it takes 13 gallons to fill up” then later in the post “so some of us with cars that get 30 miles to the gallon”. My math for **aruvqan** is valid. **BrainGlutton** would have to move a good distance and be driving a very inefficient car to cost $400 extra per month. Additionally, all I said from the beginning was "Gas could not possibly cost you $400 per month, but as long as you like where you are living, by all means, pay for the short commute. " **So I should not have used the word possibly** , I should have used a less all inclusive word/phrase like "Gas \*\*is not very likely \*\* to cost you $400 per month, but as long as you like where you are living, by all means, pay for the short commute. " Have we now completed this little hijack over a single word yet? Jim ---
**Author:** ![Dracona](https://avatars.discourse-cdn.com/v4/letter/d/ea5d25/32.png) [@Dracona](https://boards.straightdope.com/u/Dracona)\ **Post date:** [July 10, 2006, 1:49am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/32 "2006-07-10T01:49:53Z")
[QUOTE=Dracona] This is going to be extremely choppy (and unedited,) but I am rushed [/QUOTE] FLAWED POST ---
**Author:** ![Dracona](https://avatars.discourse-cdn.com/v4/letter/d/ea5d25/32.png) [@Dracona](https://boards.straightdope.com/u/Dracona)\ **Post date:** [July 10, 2006, 1:57am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/33 "2006-07-10T01:57:55Z")
#6. Never post to a messageboard while heavily medicated for respiratory illnesses. Nebulizers and Codeine do no mix. [QUOTE=What Exit?] Of course there are exceptions, but if you reread **aruvqan** , he/she states “it takes 13 gallons to fill up” then later in the post “so some of us with cars that get 30 miles to the gallon”. My math for **aruvqan** is valid. [/Quote] You’re right. I misread and misread again. My apologies. > [@](#): > > Have we now completed this little hijack over a single word yet? It wasn’t a single word, it was my poor reading comprehension. “Hijack” completed. Again, I apologize for posting while ill. No sarcasm present. ---
**Author:** ![What\_Exit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/what_exit/32/10652_2.png) [@What\_Exit](https://boards.straightdope.com/u/What_Exit)\ **Post date:** [July 10, 2006, 2:14am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/34 "2006-07-10T02:14:31Z")
[QUOTE=Dracona] #6. Never post to a messageboard while heavily medicated for respiratory illnesses. Nebulizers and Codeine do no mix. You’re right. I misread and misread again. My apologies. It wasn’t a single word, it was my poor reading comprehension. “Hijack” completed. Again, I apologize for posting while ill. No sarcasm present. [/QUOTE] No problem, happens often. Besides if I did not make the mistake of using the word possibly :smack: , none of this probably would have happened. Feel Better, Jim ---
**Author:** ![Dracona](https://avatars.discourse-cdn.com/v4/letter/d/ea5d25/32.png) [@Dracona](https://boards.straightdope.com/u/Dracona)\ **Post date:** [July 10, 2006, 2:17am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/35 "2006-07-10T02:17:30Z")
[QUOTE=What Exit?] No problem, happens often. Besides if I did not make the mistake of using the word possibly :smack: , none of this probably would have happened. Feel Better, Jim [/QUOTE] Thanks, Jim. I still pitted myself, though. I want to ensure that I fight ignorance rather than portray it 😉 It wasn’t the “possibly” that caused my moronic rambings. I’m drugged and I half-assed my post. I’ll be back as soon as I’m off the meds and well-rested! ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [July 10, 2006, 3:42am UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/36 "2006-07-10T03:42:24Z")
[QUOTE=black rabbit] That’s not entirely accurate. Many, if not most, European countries use a relative poverty threshold, meaning that a person is considered poor if they make less than, say, 30% of the median income. In the United States, the measure used to be, basically, “the cost of the absolute minimum amount of the cheapest food you can buy and still survive, times three.” It’s now tied to the CPI, which _excludes_ gas and food. [/QUOTE] I could be wrong, but I don’t think that’s exactly accurate either, or perhaps I’m just misreading what you’re saying. My understanding is that it was **originally** , in 1963, based on 3 times the thrifty food plan, and that it has subsequently been adjusted based on the percentage that the CPI increases by. In other words, it’s based on an original value, that is then increased based on a completely unrelated metric (the CPI), not actually **tied** to the CPI. Poverty guidelines would probably be more valid if they actually were tied to the CPI, as that accounts for irregularities in the various categories of expenses. Since we’re still using the “3 x cheap food in 1963” baseline, but adjusting it annually based on numerous non-food categories, variances in the price of different categories of items could either benefit, or royally screw those who are affected by the guidelines. For example, if heating/cooling costs rose much slower than food costs over the last 40 years, it would hurt those living in poverty, as the CPI wouldn’t have risen as quickly as food prices did. ---
**Author:** ![aruvqan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aruvqan/32/2891_2.png) [@aruvqan](https://boards.straightdope.com/u/aruvqan)\ **Post date:** [July 10, 2006, 12:53pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/37 "2006-07-10T12:53:58Z")
[QUOTE=What Exit?] My location is listed 😉 Sorry for the offhand remark, I thought few people exceeded my commute of over 400 miles per week. I average only about 25 mpg and it cost me around $2.93 per gallon for regular here in Central Jersey. My cost is around $216 per month for the commute. Getting up to $400 is rare without a gas hog of a vehicle. Even the commute you described at the prices you described should only be around $231. 22 work days on average in a month. {2200 miles / 30mpg \* $3.15 = $231} I will stand by my statement on this one. Jim [/QUOTE] Canterbury CT - East Hartford CT = 51.3 miles doorstep to doorstep 102.6 miles per day x 5 days = 513 miles per week 513 x 4 weeks [screw the odd 5 week month] = 2052 miles per month 2052 \ 30MPG = 68.4 gallons 68.4 gallons x 3.15 = 215.46 x Mr aru+Aru = $430.92 per month commuting. We are a 2 car, 2 job family. No we cant commute with other people, very few people in our neck of the woods commute on our schedules anywhere near our locations. Did you take into account many people also consider automotive expenses not including gas? We regularly change the oil, air filters, oil filters, add radiator fluid, widow washing fluid, and get other automotive stuff done like replacing tires, or routine maintenance like is suggested by the manufacturor like inspect the air bags, brakes, tune ups and the like … not to mention licensing, required inspections, insurance … I would have to guestimate [not counting the payments on my car that just had to be replaced because my old car died] we spend easily between $3500 - 4000 to have 2 cars to use between the gas, repairs/maintenance, insurance and licensing/registration per year. ---
**Author:** ![What\_Exit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/what_exit/32/10652_2.png) [@What\_Exit](https://boards.straightdope.com/u/What_Exit)\ **Post date:** [July 10, 2006, 1:12pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/38 "2006-07-10T13:12:26Z")
[QUOTE=aruvqan] Canterbury CT - East Hartford CT = 51.3 miles doorstep to doorstep 102.6 miles per day x 5 days = 513 miles per week 513 x 4 weeks [screw the odd 5 week month] = 2052 miles per month 2052 \ 30MPG = 68.4 gallons 68.4 gallons x 3.15 = 215.46 x Mr aru+Aru = $430.92 per month commuting. We are a 2 car, 2 job family. No we cant commute with other people, very few people in our neck of the woods commute on our schedules anywhere near our locations. Did you take into account many people also consider automotive expenses not including gas? We regularly change the oil, air filters, oil filters, add radiator fluid, widow washing fluid, and get other automotive stuff done like replacing tires, or routine maintenance like is suggested by the manufacturor like inspect the air bags, brakes, tune ups and the like … not to mention licensing, required inspections, insurance … I would have to guestimate [not counting the payments on my car that just had to be replaced because my old car died] we spend easily between $3500 - 4000 to have 2 cars to use between the gas, repairs/maintenance, insurance and licensing/registration per year. [/QUOTE] I guess this hijack cannot end. I am sorry for your commuting cost, they do not reflect **BrainGlutton’s** situation and I already apologized twice for using the word possibly. What more can I say? Jim ☹ ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [July 10, 2006, 7:55pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/39 "2006-07-10T19:55:41Z")
[QUOTE=BrainGlutton] My rent is $650/month for a one-bedroom apartment. I have a lot of debts (it took me more than a year to find a full-time library job after I got my master’s degree), and I have asthma and some other problems, and my health insurance\* and the prescription medicine costs are a killer. The latter should improve after my job’s health insurance kicks in next month, but how many poor people have jobs with that kind of benefit? (Many do qualify for Medicaid, but I’m simply assuming that the official poverty line is based on counting the value of all forms of public assistance as income; the HHS page doesn’t make that clear, but it’s hard to see how it could be otherwise.) \*BTW, my health insurance premium almost doubled when I moved from Hillsborough County to Miami-Dade. Blue Cross says that’s all determined by the state Department of Insurance. [/QUOTE] I’ll use your example and compare it to mine. Starting with your rent of $650 month. That would be the payment for a house that cost $88,000 (30 years at 8%). If you bought a house when interest rates were 6% then you could have borrowed $108,414. That rate is probably still available through first-time home owners rates from the government. The usual reason people rent instead of buy is a lack of down payment. I worked part time to pay my way through school ($19,000/yr). At that income I could afford a used mobile home($5,000). I financed it like it was a used car so the payments were $110/month. My first house cost $44,000. I put 10% down and mortgage payments were $316 (30 year 8.8%). I doubled the payments each month and paid it off in 5 years. DONE (Repeat as necessary until you are in the house you want). Lifestyle is a function of personal choices and elbow grease. Example: I have a partnership in an airplane. To fund it I helped restore the plane and in turn the original owners taught me to fly. None of us were licensed mechanics so we built it at a Joint Vocational School. The kids got hands-on practice on a real plane and we got the work signed off by the instructor/mechanics. I ended up buying out one of the owners when he moved away. We then took on 2 more partners, which basically paid for the airplane due to the appreciated value. To afford a sports car I bought a used 6 cyl Mustang and swapped out the engine/transmission to a v8 that I built up. Currently I’m working on a 6-speed turbo V8. In order to do this I needed a bigger garage so I gutted my original one and built a 22’ X 30’ garage. I reused material from the original garage and I built the windows from scratch. The cost was a fraction of having one built and it is set up with 220 service along with water and telephone. The roof has a 7 in 12 pitch so I have 30 feet of walk-through storage. I did all of this while working my way through school (which was paid for by my company). I learned to do most of it by helping my friends with their projects or from library books. I buy lots of items used and I always look for the best dollar value. Instead of a 50" plasma TV I have a used 26". Instead of surround-sound I utilized my stereo. In short, I’ve leveraged a lifestyle I can’t afford by using my own labor to achieve it and using my purchasing dollars wisely. The question is not whether it’s possible to raise a family on $18,000. The question is why would you plan to do it? ---
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [July 10, 2006, 9:34pm UTC](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724/40 "2006-07-10T21:34:49Z")
[QUOTE=DMC] I could be wrong, but I don’t think that’s exactly accurate either, or perhaps I’m just misreading what you’re saying. My understanding is that it was **originally** , in 1963, based on 3 times the thrifty food plan, and that it has subsequently been adjusted based on the percentage that the CPI increases by. In other words, it’s based on an original value, that is then increased based on a completely unrelated metric (the CPI), not actually **tied** to the CPI. Poverty guidelines would probably be more valid if they actually were tied to the CPI, as that accounts for irregularities in the various categories of expenses. Since we’re still using the “3 x cheap food in 1963” baseline, but adjusting it annually based on numerous non-food categories, variances in the price of different categories of items could either benefit, or royally screw those who are affected by the guidelines. For example, if heating/cooling costs rose much slower than food costs over the last 40 years, it would hurt those living in poverty, as the CPI wouldn’t have risen as quickly as food prices did. [/QUOTE] [Here](http://aspe.hhs.gov/poverty/faq.shtml#developed) (about 3/4 down) is the origin of the poverty line, including the original publication outlining the “economy food plan”. > [@](#): > > How was the poverty line developed? > The poverty thresholds were originally developed in 1963-1964 by Mollie Orshansky of the Social Security Administration. Orshansky took the dollar costs of the U.S. Department of Agriculture’s economy food plan for families of three or more persons and multiplied the costs by a factor of three. … Orshansky used a factor of three because the Agriculture Department’s 1955 Household Food Consumption Survey found that for families of three or more persons, the average dollar value of all food used during a week (both at home and away from home) accounted for about one third of their total money income after taxes. > > In May 1965, the U.S. Office of Economic Opportunity adopted Orshansky’s poverty thresholds as a working or quasi-official definition of poverty. In August 1969, the U.S. Bureau of the Budget (predecessor of the Office of Management and Budget) designated the poverty thresholds with certain revisions as the federal government’s official statistical definition of poverty. > … > > Was the thrifty food plan used to develop or update the poverty thresholds? > No. The Agriculture Department’s economy food plan — the predecessor of the current thrifty food plan — was used in developing the poverty thresholds in 1963-1964. (The economy food plan used to develop the thresholds is included in a 1962 Agriculture Department report that is available on the Census Bureau’s website.) The thrifty food plan was not established until 1975, when it replaced the economy food plan at the same general level of cost. The thrifty food plan has never been used to update or revise the poverty thresholds. Poverty thresholds are updated for price changes only using the Consumer Price Index. > > Are the poverty thresholds calculated every year by multiplying the cost of an Agriculture Department food plan by three? > No. The “three-times-the-cost-of-the-food-plan” calculation was done only once, for the 1963 base year poverty thresholds, using the Agriculture Department’s economy food plan. Poverty thresholds for years since 1963 have been updated for price changes only using the Consumer Price Index. > > What share of the poverty line goes for housing? for transportation? for home heating? > The poverty thresholds were not developed as an item-by-item budget with specific dollar amounts for each consumption category. If one tries to consider the thresholds as a budget, all that one can say is that they were developed in 1963-1964 by multiplying the cost of the economy food plan by three. Other than that, it is not possible to say what share of the poverty line goes for any specific consumption category. ( **Note that the food share used to develop the thresholds does not represent today’s consumption pattern for either the general population or the poverty population**.) [bolding mine] I seem to remember from policy school that the economy food plan assumed some food was home-grown (including farm proceeds) but I must admit I did not verify this in the [publication](http://aspe.hhs.gov/poverty/familyfoodplan.pdf). **PDF** [Previous page](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724.md?page=1) [Next page](https://boards.straightdope.com/t/is-18-400-year-for-4-a-fair-or-realistic-poverty-line/363724.md?page=3)