EVENTS

Date:	Wednesday, November 19, 2008
Time:	9:00 AM -- 10:30 AM
Location:	Wohlstetter Conference Center, Twelfth Floor, AEI 1150 Seventeenth Street, N.W., Washington, D.C. 20036

Now More Than Ever, It's Time for Official Poverty Rate to Go, Say Panelists at AEI

WASHINGTON, NOVEMBER 20--The United States' official poverty rate (OPR) is a "misleading indicator that is not capable of doing what it proposes to do, and it must be scrapped," Nicholas Eberstadt said at AEI on November 19. He presented his newest book, The Poverty of "The Poverty Rate": Measure and Mismeasure of Want in Modern America (AEI Press, 2008), in which he argues that the OPR, which is "central to the deliberations of our legislative and executive branches in the national struggle against need and deprivation," has become "out of sync with other measures of poverty such as unemployment, per capita income, and consumption." Indeed, from 1973 (the year the OPR was implemented) to 2005, consumption and household income figures have "essentially diverged" for the lowest quintile of all Americans.

"We have moved from the pay packet economy to the credit card economy," eminent political analyst Michael Barone noted. Commenting on the political implications of the poverty rate, Barone noted that household income figures, which are used to measure the OPR, exaggerate the lack of benefits that low-income people have enjoyed from the economic growth of the last four decades. The poor also have a "greater ability to ride out a loss of income for a reasonable amount of time" than in the past, he added. But this is not reflected in the poverty rate, and thus government redistribution programs continue to take on unnecessary risk supporting those below the official poverty line who may not actually be living a lifestyle of substantial deprivation. "While government policy ought to reduce risk," he said, "it is risky to try to reduce it too much."

William Galston of the Brookings Institution added that "it is a mistake to begin with the technical questions, as poverty is a morally laden concept." Galston observed three characteristics of poverty that complicate the discussion of measuring it. First, "poverty is considered a bad condition that no one would want to be in." Second, "in the religious tradition, it implies a moral imperative that someone ought to do something." And finally, "it can serve as a basis for the moral evaluation of a society." Galston agreed that there is nearly universal agreement that the poverty measure is increasingly outdated and misleading, but "what to use instead is where people head off in different directions."

AEI's Douglas J. Besharov, who moderated the book forum, agreed with Eberstadt, Barone, and Galston that much has changed since the OPR was first calculated in 1973, and, during this recessionary climate, rethinking the measurement of and response to poverty is urgent.

--APOORVA SHAH

For video, audio, and event information, visit www.aei.org/event1836/.

Also of interest from the AEI Press may be Prices, Poverty, and Inequality: Why Americans Are Better Off Than You Think, newly released and authored by Christian Broda and David E. Weinstein.

For media inquiries, contact Veronique Rodman at 202.862.4870 or vrodman@aei.org.

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