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It is even worse if you consider the actual reality. US poverty measures OPM and SPM both underestimates the actual poverty. OPM is set to 3x USDA "low cost" fo
by vaidhy 2y ago
It is even worse if you consider the actual reality. US poverty measures OPM and SPM both underestimates the actual poverty. OPM is set to 3x USDA "low cost" food plan and was created in 1960s. It has only been adjusted for inflation. SPM is better, but is not official.
If you tie poverty as the bottom quartile (adjusted per person + addl. impact of children), you are likely to have a poverty wage of around $32,000 (a bit higher than SPM and much higher than OPM). That makes the functionally unemployed much higher. Add to the fact that your benefits like SNAP have a steep drop-off.. you earn $5 more per hour and suddenly, you lose all the benefits and you can see this in the making.
- gruez 2y ago>It has only been adjusted for inflation. What else are you expecting? Raises every couple of years for a job well done?
- edmundsauto 2y agoInflation doesn't typically cover cost of living, does it? A poverty line basket of goods is different than someone wealthy. And is rent/real estate cost increases and insurance covered?
- nradov 2y agoYes, the CPI includes rent (and owner's imputed rent).
- nothercastle 2y agoPoorly, because of the owners imputed rent it lags a lot.
- nradov 2y agoWhatever. No inflation metric will ever be perfect. You can take the raw CPI input data and recalculate without owner's imputed rent if you want. The final result won't change much.
- vaidhy 2y agoCPI is not used for benefits calculation. Only OPM is used and OPM formula is 3x of USDA low-cost food plan. Nothing about rent, healthcare, age of the people etc. If they use CPI, it would be a much better scheme. SPM uses more variables, but it is not the official definition for poverty measurements.