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What is the history of US poverty thresholds?
Executive Summary
The United States’ official poverty thresholds trace to mid‑20th century technical work that became policy: Mollie Orshansky developed the modern measure in 1963–64 using the USDA’s economy food plan and a “multiply by three” rule, and those thresholds were institutionalized as the Official Poverty Measure in the late 1960s and formally adopted by the federal government by 1969. Since then the Census Bureau’s poverty thresholds have been updated annually only for price changes, while the Department of Health and Human Services issues simpler poverty guidelines for program eligibility; a major expert review in 1995 recommended broader revisions but the official measure largely remains the Orshansky‑based approach [1] [2] [3].
1. How a food-budget trick became the federal yardstick — the origin story that matters
Mollie Orshansky, an economist at the Social Security Administration, derived the modern U.S. poverty thresholds in 1963–64 by starting with the USDA’s economy food plan and assuming food constituted roughly one‑third of a family’s budget; she multiplied the food plan cost by three to estimate a minimum income for other needs. That pragmatic method produced a 48‑cell matrix that varies by family size, number of children, and age and it was used to produce the early official lines tied to 1960s consumption patterns. This origin explains why the official line is rooted in food costs and why critics argue it understates nonfood necessities. The adoption and federal use of Orshansky’s thresholds gave the measure institutional weight [1] [2] [3].
2. Two measures, two purposes — thresholds for stats, guidelines for programs
U.S. poverty measurement operates with two related but distinct constructs: the Census Bureau’s poverty thresholds for statistical reporting and the HHS poverty guidelines used administratively to determine eligibility for many federal programs. The thresholds are detailed and updated annually for inflation; the guidelines simplify those thresholds into a table used by agencies and include special provisions for Alaska and Hawaii. The split explains frequent confusion when commentators cite “the poverty line” without saying which measure they mean. Agencies and researchers therefore often rely on different numbers depending on whether they want a time‑series statistic or an eligibility rule [4] [5].
3. Institutional sticking points — price updates versus living‑standard changes
Since adoption, the official thresholds have been adjusted only for price inflation (using CPI updates), not for rising standards of living or changes in consumption patterns. This technical choice produced a stable, inflation‑adjusted line but also exposed the measure to critiques that it is too absolute—it does not reflect how societal notions of basic needs evolve as incomes and living standards rise. Historical research shows earlier poverty lines sometimes rose in real terms as general prosperity grew, and the omission of such “income elasticity” is central to debates about whether the U.S. poverty line should be quasi‑relative rather than purely price‑indexed [3].
4. Reform debates and the 1995 National Research Council review — recommendations that stuck in committees
A high‑profile review by the National Research Council’s Panel on Poverty and Family Assistance in 1995 concluded the Official Poverty Measure should be replaced by a more comprehensive, higher baseline that accounts for expenses such as taxes, work‑related costs, and in‑kind benefits, and that updates should reflect broader changes in living standards. Despite consensus among many researchers that the OPM undercounts modern resource needs, political and administrative inertia limited major changes, so the Census Bureau preserved the Orshansky‑based OPM while the Bureau also developed the Supplemental Poverty Measure (SPM) to provide a richer, alternative portrait [1] [3].
5. Bigger history and competing narratives — from 19th‑century subsistence lines to today’s policy frictions
The U.S. poverty line has deeper antecedents: state and reformer standard budgets in the late 19th and early 20th centuries, a 1904 “Hunter” line, and various pre‑1965 poverty estimates shaped the context in which Orshansky worked. That lineage shows poverty measurement has swung between prescriptive moral standards, technical budget studies, and econometric approaches. Contemporary debates thus reflect longstanding tensions: should poverty be judged by minimum caloric consumption scaled to other needs, by relative income, or by a comprehensive resources‑and‑needs accounting? Different stakeholders—academics, anti‑poverty advocates, agencies, and legislators—champion metrics that align with their policy aims, creating persistent pluralism in U.S. poverty measurement [6] [7].