Re: wages/Federal Poverty

["Sam and Debbie Duncan" <sduncan@turbonet.com>]

Interestingly, The workers comp premiums have decreased for several years
in a row . So businesses do have more money to pay more wages. In fact
about 17,000,000 dollars locally have be estimated by others. Even if the
local businesses didn't increase wages they could pick a favorite community
project such as the skate park, or any other cause and make it happen. The
point is that there has been a lot of money freed up in the community when
the the state lowered the premiums. Food for thought
Sam Duncan

----------
> From: JS M <jbiggs50@hotmail.com>
> To: JJSwanberg@aol.com
> Cc: vision2020@moscow.com
> Subject: Re: wages/Federal Poverty
> Date: Wednesday, January 12, 2000 1:48 PM
> 
> >If we look at meeting basic life-sustaining needs, it may help to look
at
> >Federal Poverty Thresholds compared with the Federal Minimum Wage.
> 
> I found this while surfing for some information on poverty.  It's from
the 
> Census Bureau.The Development and History of the U.S.
> 
> >"Poverty Thresholds--A Brief Overview
> by Gordon M. Fisher, Department of Health and Human Services
> 
> In view of the recent major proposal to revise the way in which the
United 
> States measures poverty, it may be useful to review the development and 
> subsequent history of the current official poverty thresholds.
> 
> The poverty thresholds were originally developed in 1963-1964 by Mollie 
> Orshansky of the Social Security Administration. She published an
analysis 
> of the poverty population using these thresholds in a January 1965 Social

> Security Bulletin article. Orshansky based her poverty thresholds on the 
> economy food plan--the cheapest of four food plans developed by the 
> Department of Agriculture. The actual combinations of foods in the food 
> plans, devised by Agriculture Department dietitians using complex 
> procedures, constituted nutritionally adequate diets; the Agriculture 
> Department described the economy food plan as being "designed for
temporary 
> or emergency use when funds are low." (Orshansky also developed a second
set 
> of poverty thresholds based on the Agriculture Department's somewhat less

> stringent low-cost food plan, but relatively little use was ever made of 
> these higher thresholds.)
> 
> Orshansky knew from the Department of Agriculture's 1955 Household Food 
> Consumption Survey (the latest available such survey at the time) that 
> families of three or more persons spent about one third of their
after-tax 
> money income on food in 1955. Accordingly, she calculated poverty
thresholds 
> for families of three or more persons by taking the dollar costs of the 
> economy food plan for families of those sizes and multiplying the costs
by a 
> factor of three--the "multiplier." In effect, she took a hypothetical 
> average family spending one third of its income on food, and assumed that
it 
> had to cut back on its expenditures sharply. She assumed that
expenditures 
> for food and non-food would be cut back at the same rate. When the food 
> expenditures of the hypothetical family reached the cost of the economy
food 
> plan, she assumed that the amount the family would then be spending on 
> non-food items would also be minimal but adequate. (Her procedure did not

> assume specific dollar amounts for any budget category besides food.) She

> derived poverty thresholds for two-person families by multiplying the
dollar 
> cost of the food plan for that family size by a somewhat higher
multiplier 
> (3.7) also derived from the 1955 survey. She derived poverty thresholds
for 
> one-person units directly from the thresholds for two-person units,
without 
> using a multiplier. The base year for the original thresholds was
calendar 
> year 1963.
> 
> While the poverty thresholds had been calculated on the basis of
after-tax 
> money income, they were applied to income data--the Census Bureau's
Current 
> Population Survey--that used a before-tax definition of money income;
this 
> was done because when the thresholds were being developed, the Current 
> Population Survey was the only good source of nationally representative 
> income data. Orshansky was aware of the inconsistency involved, but there

> was no other alternative; she reasoned that the result would yield "a 
> conservative underestimate" of poverty.
> 
> As early as November 1965, Social Security Administration policymakers
and 
> analysts began to express concern about how to adjust the poverty
thresholds 
> for increases in the general standard of living. In 1968, the Social 
> Security Administration tried to take a very modest step towards raising
the 
> poverty thresholds to reflect increases in the general standard of
living. 
> The Bureau of the Budget (the predecessor of the Office of Management and

> Budget) prohibited the modest increase in the poverty thresholds, but 
> initiated an interagency Poverty Level Review Committee to re-evaluate
the 
> poverty thresholds. This Committee decided to adjust the thresholds only
for 
> price changes, and not for changes in the general standard of living. In 
> 1969, the Committee decided that the thresholds would be indexed by the 
> Consumer Price Index instead of by the per capita cost of the economy
food 
> plan.
> 
> During the 1980s, there were extensive debates about poverty 
> measurement--particularly about proposals to count government noncash 
> benefits as income for measuring poverty without making corresponding 
> changes in the poverty thresholds. (For comments on these proposals, see
pp. 
> 9, 65-66, 205, and 227-231 of the report cited in the next paragraph.) 
> However, no changes were made in the official poverty definition during
the 
> 1980s.
> 
> In 1990, a Congressional committee requested a study of the official U.S.

> poverty measure by the National Academy of Sciences/National Research 
> Council to provide a basis for a possible revision of the poverty
measure. 
> In 1992, the NRC's Committee on National Statistics appointed a Panel on 
> Poverty and Family Assistance to conduct this study. In May 1995, the
Panel 
> published its report of the study (Constance F. Citro and Robert T.
Michael 
> (editors), Measuring Poverty: A New Approach, Washington, D.C., National 
> Academy Press, 1995). In the report, the Panel proposed a new approach
for 
> developing an official poverty measure for the U.S.--although it did not 
> propose a specific set of dollar figures. The Panel's proposal has been 
> summarized and discussed in a number of sources, including earlier issues
of 
> this newsletter."<
> 
> So, it seems to me that any discussion of poverty and wages should not
use 
> the federal threshold as a guideline because it obviously doesn't reflect

> current reality.  Take it from someone living paycheck-to-paycheck, you 
> don't have to live in a tar paper shack and eat grits every meal to be
poor.
> jm
> 
> 
> 
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