Federal Poverty Level and Why the Safety Net Is Strung an Inch from the Sidewalk

It’s a scene repeated all over the USA. A principal testifying at a legislative hearing will pour out her heart, asking for support services for students who qualify for free/reduced price lunches.

“Their parents make just 225 percent of the federal poverty level or less!” the principal will plead.

“What?!” a legislator will rage. “You mean the taxpayers are providing lunches to children whose families are not really poor?! We need to end that program and give the money to children who truly need it!”

Unfortunately the federal poverty level (FPL) is a commonly used, but little understood measuring tool. It is outdated and seriously underestimates the number of people who live with incomes inadequate to purchase basic human needs.

The FPL was created in the early 1960s by Molly Orshansky of the Social Security Administration, using USDA data from the 1950s. Orshanky’s formula assumed one wage-earner and a stay-at-home parent. At that time, families in poverty commonly spent about a third of their income on food, so the cost of a “thrifty food plan” was multiplied by three.

However, it is no longer the 1950s. Bye-bye, Ozzie and Harriet. Commuting, child care, and other work-related expenses have greatly impacted household budgets. If the true costs of essentials were calculated, most experts believe that the real poverty line would be at least 185-225 percent of the “official poverty line” of the 1950s.

The failure to change this at the federal level greatly complicates the efforts of those working to secure affordable housing, health care, and child care for all families. But because an accurate formula would perhaps double the number of persons designated as “officially poor,” winning a public policy change from elected officials is a long shot at best.

Political popularity contests decide who will be helped and who will not for now. That is why school lunches serve children up to 225 percent of the federal poverty level. Children. Ah! We like them. But able-bodied adults working at or near the minimum wage? Not so much love in our hearts there it would seem.

Missouri has one of the stingiest income guidelines in the nation when it comes to low-wage workers qualifying for Medicaid. You may be considered too wealthy to need help if you make $300 per month.

Compounding this problem is “the cliff effect.” Most programs do not have sliding scales to reduce assistance gradually as income goes up. Instead a dime too much can mean total loss of your access to a service. No wonder some parents dread a raise – it might make their families poorer in the end.

What can caring people do? We can ask legislators to take time to do the math in our discussions about programs that help families achieve stability. One tool that we can share is this “Living Wage Calculator” for all Missouri counties.

Isn’t it time that we moved the safety net higher than an inch from the sidewalk? Honest discussions about poverty require honest income guidelines.

Safety Net

Health Forward Foundation
2300 Main Street, Suite 304
Kansas City, MO 64108
(816) 241-7006