My Life Is a Lie: How a Broken Benchmark Broke America(yesigiveafig.com)
yesigiveafig.com
My Life Is a Lie: How a Broken Benchmark Broke America
https://www.yesigiveafig.com/p/part-1-my-life-is-a-lie
53 comments
The conclusion seems likely but this logic doesn't make sense. They don't recalculate a food budget every year and multiply it by three, they take that original 1963 number and add inflation. I think this is dumb, but it's dumb in a completely different way than the article is saying.
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> I'm not sure how accurate the methodology is to come up with the specific budget that produces the number "sixteen" here
The share of goods in people expenses is something governments have been tracking extremely well since the end of the inter-wars period (losing some quality during WWII).
As far as economical measurements go, those are among the best you'll get on the real economy (monetary measurements tend to be more precise).
The share of goods in people expenses is something governments have been tracking extremely well since the end of the inter-wars period (losing some quality during WWII).
As far as economical measurements go, those are among the best you'll get on the real economy (monetary measurements tend to be more precise).
> If you keep Orshansky’s logic—if you maintain her principle that poverty could be defined by the inverse of food’s budget share
This is not accurate. There was no such principle. There was an extrapolation technique to use well-measured numbers to calculate a desired but not measured number.
This is not a principle about how things should be calculated, it is a tool for dealing with missing features in a dataset.
This is not accurate. There was no such principle. There was an extrapolation technique to use well-measured numbers to calculate a desired but not measured number.
This is not a principle about how things should be calculated, it is a tool for dealing with missing features in a dataset.
> I'm not sure how accurate the methodology is to come up with the specific budget that produces the number "sixteen" here, but broadly speaking, it seems extremely likely that the number is no longer "three"
If we assume that general inflation captures the right basket of goods, and that (3 × minimum food) was correct in 1963, then what is actually done (adjusting the result in 1963 by inflation) is correct as well.
That is not what you would get if you computed the minimum food budget now and multiplied by 3; the shifting of the food share of the budget is captured in the CPI.
If we assume that general inflation captures the right basket of goods, and that (3 × minimum food) was correct in 1963, then what is actually done (adjusting the result in 1963 by inflation) is correct as well.
That is not what you would get if you computed the minimum food budget now and multiplied by 3; the shifting of the food share of the budget is captured in the CPI.
The core premise (benchmarks are broken), might be correct, but the poverty benchmark he uses is a bad example. The OPM and SPM (supplemental poverty measure, developed in 2009-2012), disagree by less than 10%; and the latter takes into account many of the criticisms in the article.
The author uses MIT Living Wage numbers to argue that should be the new "poverty" benchmark - an absurd proposition. Those might be reasonable middle class numbers. He also implies that the benchmark historically represented what is now covered under that $140K calculation - also false; it took ~$9000 in 1966 to cover a "basic standard of living" for a family of 4 with 1 earner; inflation adjusted, that's around $90,000 today. If you add in SS/Medicare taxes (3% then, 15% today), that puts you at ~$100K-105K.
Using the same MIT Living Wage numbers and taking Essex-Princeton NJ as the area (roughly what the author used), you end up with $99,922 as the living wage for a single earner, 4 person household - almost exactly the same as the household back in 1966.
Were there more jobs in 1966 that paid $9000/year versus jobs that pay $100K today? That's the real story you're looking for.
The author uses MIT Living Wage numbers to argue that should be the new "poverty" benchmark - an absurd proposition. Those might be reasonable middle class numbers. He also implies that the benchmark historically represented what is now covered under that $140K calculation - also false; it took ~$9000 in 1966 to cover a "basic standard of living" for a family of 4 with 1 earner; inflation adjusted, that's around $90,000 today. If you add in SS/Medicare taxes (3% then, 15% today), that puts you at ~$100K-105K.
Using the same MIT Living Wage numbers and taking Essex-Princeton NJ as the area (roughly what the author used), you end up with $99,922 as the living wage for a single earner, 4 person household - almost exactly the same as the household back in 1966.
Were there more jobs in 1966 that paid $9000/year versus jobs that pay $100K today? That's the real story you're looking for.
I think this was the section that made me question the accuracy of the rest:
> To function in 1955 society—to have a job, call a doctor, and be a citizen—you needed a telephone line. That “Participation Ticket” cost $5 a month. / Adjusted for standard inflation, that $5 should be $58 today. / But you cannot run a household in 2024 on a $58 landline. To function today—to factor authenticate your bank account, to answer work emails, to check your child’s school portal (which is now digital-only)—you need a smartphone plan and home broadband. / The cost of that “Participation Ticket” for a family of four is not $58. It’s $200 a month.
We're talking about needs here, yes? If your kids are young enough to need childcare (a recurring theme of the article), they don't need their own phones, so we're talking about two adults.
You can easily get an MVNO plan for $20 a month with 10GB data, which is more than enough for needs. Tether to it if you absolutely must access something on a device other than a phone. Get two of them, one for each of the adults in the family.
There's $40, not $58 and definitely not $200.
It just made me wonder if it's this easy to save 80% on the author's expected cost in this category, why should I trust that the other "national averages" the author uses should be considered as the factors in how families struggling financially could meet their needs?
It reminds me of when people use the "average SNAP benefit" as an indication that people on SNAP are going hungry. It's called "supplemental" for a reason: people are expected to spend some of their other money on food--and people receiving the average SNAP benefit as opposed to the maximum SNAP benefit have been through an assessment that determined they should have other money available to spend on food.
I don't doubt the poverty line should be higher than it is, but jumping from 3x to 16x a minimum food budget is much too far a jump.
> To function in 1955 society—to have a job, call a doctor, and be a citizen—you needed a telephone line. That “Participation Ticket” cost $5 a month. / Adjusted for standard inflation, that $5 should be $58 today. / But you cannot run a household in 2024 on a $58 landline. To function today—to factor authenticate your bank account, to answer work emails, to check your child’s school portal (which is now digital-only)—you need a smartphone plan and home broadband. / The cost of that “Participation Ticket” for a family of four is not $58. It’s $200 a month.
We're talking about needs here, yes? If your kids are young enough to need childcare (a recurring theme of the article), they don't need their own phones, so we're talking about two adults.
You can easily get an MVNO plan for $20 a month with 10GB data, which is more than enough for needs. Tether to it if you absolutely must access something on a device other than a phone. Get two of them, one for each of the adults in the family.
There's $40, not $58 and definitely not $200.
It just made me wonder if it's this easy to save 80% on the author's expected cost in this category, why should I trust that the other "national averages" the author uses should be considered as the factors in how families struggling financially could meet their needs?
It reminds me of when people use the "average SNAP benefit" as an indication that people on SNAP are going hungry. It's called "supplemental" for a reason: people are expected to spend some of their other money on food--and people receiving the average SNAP benefit as opposed to the maximum SNAP benefit have been through an assessment that determined they should have other money available to spend on food.
I don't doubt the poverty line should be higher than it is, but jumping from 3x to 16x a minimum food budget is much too far a jump.
It seems the author fed a list of documents and points to an AI, asked it to write an argument on it, then the AI hallucinated quotes and tried to badly extrapolate from real data. I think the original point might be true, but it is hard to trust tbh.
I think you're just picking at a detail that doesn't alter the picture much. I think we can all agree that having home Internet and a smart phone matter. Cheap phones cost a few hundred, cheap plans cost $40+/person if you use normal amounts of data, not < 5 gigs, home Internet costs $50+, and renting or buying modem type stuff. Amortizing all that might be under $200, but it's probably damn close (or at least circa $140) depending on a lot of details. Particularly if you crack a screen or something every few years.
Yeah the author makes a classic mistake of over arguing the point (potentially because the article was AI generated).
Laser focusing on housing and childcare would have been enough to make the point. Throw healthcare in and it's a solid argument. Get into the weeds on individual expenses and you open yourself up to a lot of nitpicking, which is all over this comment thread
He also way overshoots the target. I absolutely believe the current poverty line is way to low, but trying to argue it should be $140,000 a year is insanity. A lot of people will disregard the overall point of the article just due to that claim alone.
Laser focusing on housing and childcare would have been enough to make the point. Throw healthcare in and it's a solid argument. Get into the weeds on individual expenses and you open yourself up to a lot of nitpicking, which is all over this comment thread
He also way overshoots the target. I absolutely believe the current poverty line is way to low, but trying to argue it should be $140,000 a year is insanity. A lot of people will disregard the overall point of the article just due to that claim alone.
I mean it's worth noting that it seems to be for a family of four. I do feel pretty confident that if you take the poverty line as being a measure of the income below which a household has major systemic risks, saying that it probably should have been something like $80k in 2020, and that if you adjust it, then concluding it being $100k+ doesn't shock me.
It's not rocket science to see that just $2k/mo on housing and $2k/mo for healthcare for four people adds up to $48k, and that means more than $60k pre-tax income is an insufficient total compensation.
It's not rocket science to see that just $2k/mo on housing and $2k/mo for healthcare for four people adds up to $48k, and that means more than $60k pre-tax income is an insufficient total compensation.
Cheap phones like a year old Moto G are under $100. There's no reason that shouldn't last two years. They do everything necessary. If you're near poverty, you don't get to use "normal" amounts of data, streaming shows and Spotify and YouTube. You need enough data to get by, and 5GB will easily load every website you must access in a month, never mind that the plan includes all the talk/text you need.
I really do pay $15 a month for my phone plan. I've never hit my 5GB data cap.
I do have $30 home internet. So even if we assume two adults and home broadband, we're talking $70 including hardware, not $200, but there's nothing I do on my home WiFi that I absolutely need and couldn't do from my phone while staying under the data cap. But I'm not financially struggling, and it's an expense I'm happy to pay. It's not something I need.
I really do pay $15 a month for my phone plan. I've never hit my 5GB data cap.
I do have $30 home internet. So even if we assume two adults and home broadband, we're talking $70 including hardware, not $200, but there's nothing I do on my home WiFi that I absolutely need and couldn't do from my phone while staying under the data cap. But I'm not financially struggling, and it's an expense I'm happy to pay. It's not something I need.
I also use cheap Mint Mobile plan with a 5 gig plan. Most months I don't hit the cap. But the months that I do all have two things in common: either traveling, often with the implicit assumption that I can use my phone for work, or tethering to use for work when there's a power or internet outage. Those primary causes aside, the current online universe does an awful lot of video and I've wasted an awful lot of data watching tutorial videos and how-to type stuff.
That said, the point is that if you can't watch a tutorial because it'd run over your data cap, it's problematic. So is having too trash of a phone - it's the kind of thing employers will see as a negative signal at a certain point.
Which is to say, sure, maybe you can spend under $200/mo on phones and Internet for one or two people, but realistically you're not spending under $100 without major and problematic sacrifices. And whether it's a $100 or $200, compared to housing, food, other stuff, it's not a wild expense.
That said, the point is that if you can't watch a tutorial because it'd run over your data cap, it's problematic. So is having too trash of a phone - it's the kind of thing employers will see as a negative signal at a certain point.
Which is to say, sure, maybe you can spend under $200/mo on phones and Internet for one or two people, but realistically you're not spending under $100 without major and problematic sacrifices. And whether it's a $100 or $200, compared to housing, food, other stuff, it's not a wild expense.
The phone point was terrible but he’s not wrong that next to housing, childcare, and healthcare, basically all other expenses hardly matter at all for a family these days, including food.
If the core point about the poverty line being based on inflation adjusted food prices alone is correct, then the piece holds up very well and explains a hell of a lot about how life feels in the US right now.
[edit] if the “the line you see on charts is still just 3x food costs” thing isn’t actually true, through, then the article gets a lot weaker in a hurry.
[edit2] FWIW the Wikipedia page on this topic (https://en.wikipedia.org/wiki/Poverty_in_the_United_States) largely confirms this, raises some similar points about potential problems with the “poverty line” today on basically the same grounds as the article, and reading it gives the same sense of standing on a deck of a ship that you’ve just noticed is leaning alarmingly toward starboard as the linked piece.
If the core point about the poverty line being based on inflation adjusted food prices alone is correct, then the piece holds up very well and explains a hell of a lot about how life feels in the US right now.
[edit] if the “the line you see on charts is still just 3x food costs” thing isn’t actually true, through, then the article gets a lot weaker in a hurry.
[edit2] FWIW the Wikipedia page on this topic (https://en.wikipedia.org/wiki/Poverty_in_the_United_States) largely confirms this, raises some similar points about potential problems with the “poverty line” today on basically the same grounds as the article, and reading it gives the same sense of standing on a deck of a ship that you’ve just noticed is leaning alarmingly toward starboard as the linked piece.
I think it's more just an example of the flawed methodology. Like, it assumes a 4-person household, right? Two adults, two kids. If the kids need full-time childcare, it's because the parents must both be working full-time, right? Otherwise presumably one or the other of them could take care of the children at least some of the time. But where can you pay two adults for full-time work and only hit $31,200? Is there anywhere that actually pays a $7.50 minimum wage? Even in states where that's technically the minimum by law, you can't hire somebody for that. I live in one such state. KFC advertises $17 an hour on the sign outside.
And the kids must be young enough that they're not in school, if the childcare figures are to be plausible. $32,773 for two kids? I'm not remotely in a low cost of living area, but you're not paying that kind of rate even for twin newborns. It's less than half that for after school care.
The problem is that it's taking average figures as though people who are financially struggling are paying average costs for things. That's never been the case. People who don't have money have always had to be careful about how they spend it.
It's a decent point that "3x food costs" is likely too low a benchmark. But it doesn't come close to justifying 16x.
And the kids must be young enough that they're not in school, if the childcare figures are to be plausible. $32,773 for two kids? I'm not remotely in a low cost of living area, but you're not paying that kind of rate even for twin newborns. It's less than half that for after school care.
The problem is that it's taking average figures as though people who are financially struggling are paying average costs for things. That's never been the case. People who don't have money have always had to be careful about how they spend it.
It's a decent point that "3x food costs" is likely too low a benchmark. But it doesn't come close to justifying 16x.
What's your estimate for hardware costs? You can't get phone+service for $20/month. What if they have limited or poor credit?
You can get a year old Moto G for under $100. There's no reason it shouldn't last two years (or 25 months for easy math, $4 a month). And you can get an MVNO plan for $15 a month that covers all talk and text and 5GB data. $19.
Those are the actual costs of my phone plan. I've never once come close to the cap because I don't stream music/video on my phone. It's not a need. I can load all the websites I must access and look up maps everywhere I need to go. And it's a pre-paid plan. No credit check required.
People who are really struggling simply do not NEED to spend more than $20 for phone service.
Those are the actual costs of my phone plan. I've never once come close to the cap because I don't stream music/video on my phone. It's not a need. I can load all the websites I must access and look up maps everywhere I need to go. And it's a pre-paid plan. No credit check required.
People who are really struggling simply do not NEED to spend more than $20 for phone service.
Pretty sure this is AI written or at least assisted. “It’s not just X, it’s Y. And the foo? It bazzed.”
Honestly hard to disagree with what the message is but I can’t really take him intellectually seriously even with an obvious premise with such lazy writing
Honestly hard to disagree with what the message is but I can’t really take him intellectually seriously even with an obvious premise with such lazy writing
> “It’s not just X, it’s Y. And the foo? It bazzed.”
The common complaint to see a bunch of em-dashes in a passage, and assume it was AI written irritated me—because I like using em-dashes. But this writing… quirk. I don’t know what dank repository of marketing text LLMs picked it up from, but it’s obnoxious, and I hope it dies a painful death.
The common complaint to see a bunch of em-dashes in a passage, and assume it was AI written irritated me—because I like using em-dashes. But this writing… quirk. I don’t know what dank repository of marketing text LLMs picked it up from, but it’s obnoxious, and I hope it dies a painful death.
It's quite easy to disagree with the headline argument that the problem is a broken benchmark. There are definitely problems with poverty and inequality but changing some benchmark won't fix them.
Yes, everything after the intro seems to be AI-written. It is lazy and unpleasant to read, but beyond that there are some serious issues of inaccuracy and dishonesty that make this worse than other cases I've seen.
> I came across a sentence buried in a research paper: “The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.”
I think this is quoting https://www.census.gov/newsroom/blogs/research-matters/2025/..., where the real quote is "The poverty threshold was originally defined as three times the cost of a minimum food diet in 1963 and is annually adjusted for inflation using the Consumer Price Index for All Urban Consumers (CPI-U)." This isn't buried in a research paper, you paraphrased and then claimed it was a real quote by putting in within quotes, and you failed to cite a source. This is deliberately lying to your readers about the core premise of the whole piece.
The next sentence:
> I read it again. Three times the minimum food budget.
That isn't even what your fake quote said.
> In her January 1965 article,
What article? You haven't mentioned this yet, and you still haven't cited a single source.
> ”if it is not possible to state unequivocally ‘how much is enough,’ it should be possible to assert with confidence how much, on average, is too little.”
This is minor, but again this is an inaccurate quote. The original (https://www.ssa.gov/policy/docs/ssb/v28n1/v28n1p3.pdf) says "on an average", not "on average". Two out of two uncited quotes are wrong so far, making the whole piece untrustworthy if it wasn't already.
> “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” — Plutarch
I assumed this one was real but I searched anyway because of the pattern of fake quotes. The first result is an article titled "Fake Plutarch Quotes Are the Newest and Most Facile Ailment of All Arguments About Inequality". This is another fake quote, three for three now.
I'm not going to read the rest of this, even without the trustworthiness issues the bland AI filler is not worth spending any time on. Everyone, please do not do this. Whatever rough notes you were going to feed into the AI are much better, just publish that if you don't have the time or ability to make it "good writing", however you define that.
> I came across a sentence buried in a research paper: “The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.”
I think this is quoting https://www.census.gov/newsroom/blogs/research-matters/2025/..., where the real quote is "The poverty threshold was originally defined as three times the cost of a minimum food diet in 1963 and is annually adjusted for inflation using the Consumer Price Index for All Urban Consumers (CPI-U)." This isn't buried in a research paper, you paraphrased and then claimed it was a real quote by putting in within quotes, and you failed to cite a source. This is deliberately lying to your readers about the core premise of the whole piece.
The next sentence:
> I read it again. Three times the minimum food budget.
That isn't even what your fake quote said.
> In her January 1965 article,
What article? You haven't mentioned this yet, and you still haven't cited a single source.
> ”if it is not possible to state unequivocally ‘how much is enough,’ it should be possible to assert with confidence how much, on average, is too little.”
This is minor, but again this is an inaccurate quote. The original (https://www.ssa.gov/policy/docs/ssb/v28n1/v28n1p3.pdf) says "on an average", not "on average". Two out of two uncited quotes are wrong so far, making the whole piece untrustworthy if it wasn't already.
> “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” — Plutarch
I assumed this one was real but I searched anyway because of the pattern of fake quotes. The first result is an article titled "Fake Plutarch Quotes Are the Newest and Most Facile Ailment of All Arguments About Inequality". This is another fake quote, three for three now.
I'm not going to read the rest of this, even without the trustworthiness issues the bland AI filler is not worth spending any time on. Everyone, please do not do this. Whatever rough notes you were going to feed into the AI are much better, just publish that if you don't have the time or ability to make it "good writing", however you define that.
> The U.S. Census Bureau releases two poverty measures each September. The first, called the official poverty measure, is based on cash resources. The second, the Supplemental Poverty Measure (SPM), includes both cash and noncash benefits and subtracts necessary expenses (such as taxes and medical expenses). The official poverty measure has remained mostly unchanged since it was introduced in the mid-1960s. In contrast, the SPM was designed to improve as new data and methods become available.
– https://www.census.gov/newsroom/blogs/random-samplings/2025/...
I’m not sure how to treat this, but if the official poverty measure is used for practical purposes and not the SPM, the core premise is still entirely valid. I have no idea if that’s the case, and why the “official” one is still measured at all.
– https://www.census.gov/newsroom/blogs/random-samplings/2025/...
I’m not sure how to treat this, but if the official poverty measure is used for practical purposes and not the SPM, the core premise is still entirely valid. I have no idea if that’s the case, and why the “official” one is still measured at all.
The premise is that food is a smaller share of the average budget today, so multiplying a food budget by three is too low. But they don't recalculate a new food budget every year, they literally just take the number from 1963 and add inflation.
> If you keep Orshansky’s logic—if you maintain her principle that poverty could be defined by the inverse of food’s budget share—but update the food share to reflect today’s reality, the multiplier is no longer three.
They don't do that, nobody does that.
I agree that the poverty line is too low, and I agree that the original idea was not supposed to mean "more than this is ok", but the argument still doesn't really make sense even if the conclusion is correct.
> If you keep Orshansky’s logic—if you maintain her principle that poverty could be defined by the inverse of food’s budget share—but update the food share to reflect today’s reality, the multiplier is no longer three.
They don't do that, nobody does that.
I agree that the poverty line is too low, and I agree that the original idea was not supposed to mean "more than this is ok", but the argument still doesn't really make sense even if the conclusion is correct.
He isn't arguing that they do that, he's saying that if we accept that that remains a reasonable methodology to extrapolate the data, then we can use that methodology to get an updated estimate. He gets his estimate a couple of different ways, and they end up similar.
> "...why the “official” one is still measured at all."
"The official measure provides a consistent historical view of poverty in the United States, but the SPM may be better suited to helping congressional policymakers and other experts understand how taxes and government programs affect the poor. Also, it may better illustrate how certain medical expenses and work-related expenses such as child care can affect a family's economic well-being."
"One of the most important differences between the two measures, however, is that the SPM is intended to be revised periodically, using improved data sources and measurement techniques as they become available, while the official poverty measure is intended to remain consistent over time."
Both quotes are from "The Supplemental Poverty Measure: Its Core Concepts, Development, and Use" at https://www.congress.gov/crs-product/R45031
"The official measure provides a consistent historical view of poverty in the United States, but the SPM may be better suited to helping congressional policymakers and other experts understand how taxes and government programs affect the poor. Also, it may better illustrate how certain medical expenses and work-related expenses such as child care can affect a family's economic well-being."
"One of the most important differences between the two measures, however, is that the SPM is intended to be revised periodically, using improved data sources and measurement techniques as they become available, while the official poverty measure is intended to remain consistent over time."
Both quotes are from "The Supplemental Poverty Measure: Its Core Concepts, Development, and Use" at https://www.congress.gov/crs-product/R45031
the census bureau annual poverty report includes both poverty measures: https://www.census.gov/library/publications/2024/demo/p60-28...
(the most recent poverty report isn't currently downloadable due to the recent government shutdown)
Your question about why the official poverty measure is still used at all is a good one. I'd speculate that if the official poverty measure is tangled up with legislation, it may not be simple for government bureaus to update the measure and eliminate usage of the old measure without someone passing some new laws. If the poverty measure partly defines who does or doesn't receive certain benefits then changing it could be fairly political. If the supplemental poverty measure indicates that e.g. 12% not 10% of families fall below the poverty line, then that implies 20% more funding is necessary for some benefits.
(the most recent poverty report isn't currently downloadable due to the recent government shutdown)
Your question about why the official poverty measure is still used at all is a good one. I'd speculate that if the official poverty measure is tangled up with legislation, it may not be simple for government bureaus to update the measure and eliminate usage of the old measure without someone passing some new laws. If the poverty measure partly defines who does or doesn't receive certain benefits then changing it could be fairly political. If the supplemental poverty measure indicates that e.g. 12% not 10% of families fall below the poverty line, then that implies 20% more funding is necessary for some benefits.
140k is significantly more money than I've ever made in my life.
Where I live, really the line where life becomes a real struggle is about 80k I would say. Below that, you're putting off maintenance, not saving money, the car is accumulating wear that you can't fix, and a medical bill is fatal.
People living way below 80k can only be doing so with significant government assistance.
Where I live, really the line where life becomes a real struggle is about 80k I would say. Below that, you're putting off maintenance, not saving money, the car is accumulating wear that you can't fix, and a medical bill is fatal.
People living way below 80k can only be doing so with significant government assistance.
80k for a family of 4?
Ignore the bit about food and multipliers. They're not really relevant.
This Orshansky person used estimates and approximations to come up with a rough "this is what it takes to not starve" number, in the absence of sufficient high-quality data to calculate something more precisely.
If you trust inflation / cost of living numbers, they're a measure of how expensive life is overall.
This is the correct way to do things. The methodology of the original SWAG is not relevant to how to update it over time.
.
If you take apart the original estimate into all the different things that made up household expenses, and adjust those separately for price changes and substitutions and such, and our or back together... you're just putting in a ton of extra effort to re-build the "adjust for inflation" calculation from scratch. With tons of room to make mistakes, as demonstrated in the article.
This Orshansky person used estimates and approximations to come up with a rough "this is what it takes to not starve" number, in the absence of sufficient high-quality data to calculate something more precisely.
If you trust inflation / cost of living numbers, they're a measure of how expensive life is overall.
This is the correct way to do things. The methodology of the original SWAG is not relevant to how to update it over time.
.
If you take apart the original estimate into all the different things that made up household expenses, and adjust those separately for price changes and substitutions and such, and our or back together... you're just putting in a ton of extra effort to re-build the "adjust for inflation" calculation from scratch. With tons of room to make mistakes, as demonstrated in the article.
The problem with the "adjust for inflation" methodology, is that inflation is not equal for all components of the basket. The CPI measures the average inflation of the basket, but if some components have grown significantly differently from others.
In particular, some components of the current household budget were not included in the the original cost estimates. So the "inflation adjusted cost of living" doesn't incorporate those aspects, which is why rebuilding the number from scratch gets a result so wildly different from the inflation adjusted number, instead of being a few percent off due to a different methodology.
In particular, some components of the current household budget were not included in the the original cost estimates. So the "inflation adjusted cost of living" doesn't incorporate those aspects, which is why rebuilding the number from scratch gets a result so wildly different from the inflation adjusted number, instead of being a few percent off due to a different methodology.
The strongest argument is probably that for someone subsisting on the minimal wage, the CPI is not a good representation of their consumption basket (whereas it might be for someone close to the median).
Therefore the adjustment should probably be based on a different number reflecting the actual consumption of households near the poverty line (food would probably be higher than it is in the CPI currently, as one example)
Therefore the adjustment should probably be based on a different number reflecting the actual consumption of households near the poverty line (food would probably be higher than it is in the CPI currently, as one example)
Dept of Labor [0] says childcare has a median cost of $6,552 to $15,600 (least expensive county to most expensive county). The article appears to be basing their childcare assumptions on the most expensive county (where household incomes are also high), and assuming all families of 4 have two children in childcare.
Yes, childcare is problematically expensive. But one of the core numbers in the article appears to be misleading at best.
[0] https://www.dol.gov/newsroom/releases/wb/wb20241119
Yes, childcare is problematically expensive. But one of the core numbers in the article appears to be misleading at best.
[0] https://www.dol.gov/newsroom/releases/wb/wb20241119
I believe they’re using all numbers for a family of four. So two kids. Your numbers are for one kid. Double them and it’s closer to what the article says.
Can anyone pass independent judgment on how accurate this is? (I mean, yes, he lays out all his sources and logic. I don't know enough to tell whether he's making an accurate assessment of the situation, or is trying to grind some particular axe.)
Because if this is true, it's massive. And it explains so much - starting with why everyone feels the economy is broken.
Because if this is true, it's massive. And it explains so much - starting with why everyone feels the economy is broken.
Minor: Given the examples depend on healthcare and childcare, people aged 65 and older (Medicare, outside average child raising age) fall outside this analysis, and currently a significant part of us population.
(And Medicare, even without additional supplements would have significantly better health outcomes than 1960s)
And if you take the average social security benefit being $48k per household/year, subtract those 2 expenses, either the $31k poverty line is way off or social security is way off
(And Medicare, even without additional supplements would have significantly better health outcomes than 1960s)
And if you take the average social security benefit being $48k per household/year, subtract those 2 expenses, either the $31k poverty line is way off or social security is way off
[deleted]
So if you think that the poverty line should be delineating that income below which a household is subject to major systemic risks and has no clear path to retirement, it does appear that the poverty line as currently defined is wildly inaccurate.
If you rule of thumb just looking at $2k/mo housing and $2k/mo for health insurance for four, it implies that a living wage for such a household is some number well above $60k, and potentially as high as $105k w/ my napkin math. This, IMO, suggests that there is a level of accuracy to the article, even if the $140k it suggests is high.
If you rule of thumb just looking at $2k/mo housing and $2k/mo for health insurance for four, it implies that a living wage for such a household is some number well above $60k, and potentially as high as $105k w/ my napkin math. This, IMO, suggests that there is a level of accuracy to the article, even if the $140k it suggests is high.
You could just Google it.
- There's https://www.census.gov/topics/income-poverty/poverty/about/h... which does say that the Official Poverty Measure is indeed based on food expenses multiplied by three.
- On the other hand, there's also https://www.census.gov/library/visualizations/2021/demo/pove... which says that there are now two measures: the Official Poverty Measure and the newer Supplemental Poverty Measure that's intended to address some of the problems of the former.
Mention of the Supplemental Poverty Measure doesn't seem to appear in the submitted post using a quick Ctrl-F. Draw your own conclusions.
- There's https://www.census.gov/topics/income-poverty/poverty/about/h... which does say that the Official Poverty Measure is indeed based on food expenses multiplied by three.
- On the other hand, there's also https://www.census.gov/library/visualizations/2021/demo/pove... which says that there are now two measures: the Official Poverty Measure and the newer Supplemental Poverty Measure that's intended to address some of the problems of the former.
Mention of the Supplemental Poverty Measure doesn't seem to appear in the submitted post using a quick Ctrl-F. Draw your own conclusions.
My experience over a few decades and several home ownerships is that debt plays an outsized role. You are paying a bank first with your mortgage payment, and that csn be 80-90% of your housing cost, which is partially defrayed by a tax writeoff. And the banks basically have a license to print money. We are all working for the banks to some extent. Could this change in the future? You bet it could... but we have to make it happen.
Nitpicks and writing style aside (who posts charts without context?), the napkin math checks out to me as legit.
Here’s the thing all the detractors keep missing by nitpicking one data point or another: this author is talking systems, not products. Sure, the technologically inclined could get their phone cost down to that of an MVNO and a refurbished Android handset for $30/month, but most people aren’t that capable. Most people pay AT&T, Verizon, or T-Mobile - it’s why they’re the “big three”, after all. Same with home broadband, which nitpickers ignore in that $200 estimate the author makes; even if you qualify for subsidized internet, the waffling of the FCC combined with the hostility of carriers means most folks won’t even be able to get it or keep it.
And this is why I’m ultimately disappointed that the article is flagged, because for all the specific nitpicking done here in the comments, the author pre-empts those nitpicks in the piece. When you talk about systems at scale, you abandon precision for ranges, specifics for patterns, details for trends. Any idiot can point out that ahkshually, rent is only $R amount in this specific town that overbuilt two-bedroom units, and ahkshually, you can save on phone costs by using an MVNO, and ahkshually the government uses figure $P to measure poverty now.
The author lays out the most compelling argument yet of the brokenness of America as an economy. It drags the fiscal cliffs of poverty out into the daylight for all to see, with hard numbers of income versus expense to drive home how fucking impossible it is to survive and thrive in America today. It makes a compelling argument out of data and systems analysis that not just corroborates my own math, but also my lived experiences with poverty. He rightly calls out how the present system points to fancier phones, nicer cars, bigger homes, and bigger paychecks while yanking the rug out from under the working class in the form of crippled social services and non-existent price controls, leading over time to the modern era where the survival essentials are too expensive even on six figure salaries in most cities and towns. He doesn’t even pitch a solution, knowing that would detract from the argument (“SHIT IS BROKEN BY DESIGN”), leaving that to readers to figure out.
Look, most of HN think themselves as armchair savants, but we’re emphatically not. We’re also not particularly special, either, just lucky. The present system does not reward hard work, it punishes it. It is absolutely infuriating to see others receive aid and assistance for working less than I do, until I realize they’re also simply surviving by avoiding the cliffs that would tilt them to ruin. I wasn’t mad because they got help, I was mad because I didn’t.
That, I think, is what the author was trying to shift perspective on. Even if you make the big bucks, unless you’re a single income pulling down $200k+ outside a major metro area (which, let’s face it, HN readers represent a disproportionately large amount of said individuals), you’re still struggling. We’ve built a system around erroneous benchmarks that have gone unchecked and unaddressed for so long that everyone has optimized against them to keep more for themselves at the expense of others, and there is no pretty way out of it.
Here’s the thing all the detractors keep missing by nitpicking one data point or another: this author is talking systems, not products. Sure, the technologically inclined could get their phone cost down to that of an MVNO and a refurbished Android handset for $30/month, but most people aren’t that capable. Most people pay AT&T, Verizon, or T-Mobile - it’s why they’re the “big three”, after all. Same with home broadband, which nitpickers ignore in that $200 estimate the author makes; even if you qualify for subsidized internet, the waffling of the FCC combined with the hostility of carriers means most folks won’t even be able to get it or keep it.
And this is why I’m ultimately disappointed that the article is flagged, because for all the specific nitpicking done here in the comments, the author pre-empts those nitpicks in the piece. When you talk about systems at scale, you abandon precision for ranges, specifics for patterns, details for trends. Any idiot can point out that ahkshually, rent is only $R amount in this specific town that overbuilt two-bedroom units, and ahkshually, you can save on phone costs by using an MVNO, and ahkshually the government uses figure $P to measure poverty now.
The author lays out the most compelling argument yet of the brokenness of America as an economy. It drags the fiscal cliffs of poverty out into the daylight for all to see, with hard numbers of income versus expense to drive home how fucking impossible it is to survive and thrive in America today. It makes a compelling argument out of data and systems analysis that not just corroborates my own math, but also my lived experiences with poverty. He rightly calls out how the present system points to fancier phones, nicer cars, bigger homes, and bigger paychecks while yanking the rug out from under the working class in the form of crippled social services and non-existent price controls, leading over time to the modern era where the survival essentials are too expensive even on six figure salaries in most cities and towns. He doesn’t even pitch a solution, knowing that would detract from the argument (“SHIT IS BROKEN BY DESIGN”), leaving that to readers to figure out.
Look, most of HN think themselves as armchair savants, but we’re emphatically not. We’re also not particularly special, either, just lucky. The present system does not reward hard work, it punishes it. It is absolutely infuriating to see others receive aid and assistance for working less than I do, until I realize they’re also simply surviving by avoiding the cliffs that would tilt them to ruin. I wasn’t mad because they got help, I was mad because I didn’t.
That, I think, is what the author was trying to shift perspective on. Even if you make the big bucks, unless you’re a single income pulling down $200k+ outside a major metro area (which, let’s face it, HN readers represent a disproportionately large amount of said individuals), you’re still struggling. We’ve built a system around erroneous benchmarks that have gone unchecked and unaddressed for so long that everyone has optimized against them to keep more for themselves at the expense of others, and there is no pretty way out of it.
The core premise (benchmarks are broken), might be correct, but the poverty benchmark he uses is a bad example. The OPM and SPM (supplemental poverty measure, developed in 2009-2012), disagree by less than 10%; and the latter takes into account many of the criticisms in the article.
The author uses MIT Living Wage numbers to argue that should be the new "poverty" benchmark - an absurd proposition. Those might be reasonable middle class numbers. He also implies that the benchmark historically represented what is now covered under that $140K calculation - also false; it took ~$9000 in 1966 to cover a "basic standard of living" for a family of 4 with 1 earner; inflation adjusted, that's around $90,000 today. If you add in SS/Medicare taxes (3% then, 15% today), that puts you at ~$100K-105K.
Using the same MIT Living Wage numbers and taking Essex-Princeton NJ as the area (roughly what the author used), you end up with $99,922 as the living wage for a single earner, 4 person household - almost exactly the same as the household back in 1966.
Were there more jobs in 1966 that paid $9000/year versus jobs that pay $100K today? That's the real story you're looking for.
The author uses MIT Living Wage numbers to argue that should be the new "poverty" benchmark - an absurd proposition. Those might be reasonable middle class numbers. He also implies that the benchmark historically represented what is now covered under that $140K calculation - also false; it took ~$9000 in 1966 to cover a "basic standard of living" for a family of 4 with 1 earner; inflation adjusted, that's around $90,000 today. If you add in SS/Medicare taxes (3% then, 15% today), that puts you at ~$100K-105K.
Using the same MIT Living Wage numbers and taking Essex-Princeton NJ as the area (roughly what the author used), you end up with $99,922 as the living wage for a single earner, 4 person household - almost exactly the same as the household back in 1966.
Were there more jobs in 1966 that paid $9000/year versus jobs that pay $100K today? That's the real story you're looking for.
I think it’s mostly bullshit, and a misunderstanding of what poverty is.
Poverty doesn’t mean you can only afford bare minimum stuff and can’t take any vacations or buy luxuries. It means you are struggling.
People in poverty do not have childcare costs, or healthcare, or even housing and transportation (they could be homeless or live with relatives, and either take buses, walk, bike, or get some kind of free ride to work)
Food is truly the only thing people really need. For that, the original amount seems accurate.
Ridiculous to say $100k is the new poverty line. Get a grip.
Poverty doesn’t mean you can only afford bare minimum stuff and can’t take any vacations or buy luxuries. It means you are struggling.
People in poverty do not have childcare costs, or healthcare, or even housing and transportation (they could be homeless or live with relatives, and either take buses, walk, bike, or get some kind of free ride to work)
Food is truly the only thing people really need. For that, the original amount seems accurate.
Ridiculous to say $100k is the new poverty line. Get a grip.
I feel like the author addresses most of your points well with his comparison of a survival line vs a crisis line.
But re the "people in poverty don't have" a few caveats, in comparison to the 60s, "public" transportation is generally of lower availability and higher priced, single earner households were the norm, and housing was cheaper (addressed).
And while <$100k is pointed to as the line of dimished marginal benefits, in the context of the US median household income being $66k is an indictment of a broken system.
But re the "people in poverty don't have" a few caveats, in comparison to the 60s, "public" transportation is generally of lower availability and higher priced, single earner households were the norm, and housing was cheaper (addressed).
And while <$100k is pointed to as the line of dimished marginal benefits, in the context of the US median household income being $66k is an indictment of a broken system.
From TFA: "In 1963, she observed that families spent roughly one-third of their income on groceries."
He's not saying the average person who was homeless, or living with relatives in 1963 was spending roughly one-third of their income in groceries, it was explicitly families.
You've just No True Scotsmanned your way into redefining what is being discussed. Please read article and firmly secure yourself :)
He's not saying the average person who was homeless, or living with relatives in 1963 was spending roughly one-third of their income in groceries, it was explicitly families.
You've just No True Scotsmanned your way into redefining what is being discussed. Please read article and firmly secure yourself :)
This OPM and SPM thing you use in the US looks quite disturbing. I did not know poverty is defined in another way than in Europe. With the European model (60% below the median income) about 25% of the US would count as poor. That's shocking.
I wish the author dispensed with the mea culpa.
It makes the essay hard to take seriously.
It makes the essay hard to take seriously.
> “The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.”
I did not know that is how that is calculated. Sigh, that’s not a great way to do that.
I did not know that is how that is calculated. Sigh, that’s not a great way to do that.
This was a minor plotline in one episode of The West Wing where they discussed a couple of the details the article gives about it, with the additional claim (which I'm unsure of the truth of) that it was influenced by the creator of it having grown up in the Soviet Union and therefore having incorrect assumptions about how much food prices would influence poverty in the long term. (I forget how it turned out, but I remember that the member of the administration hearing about this was at least initially against updating the poverty line calculation because it would cost them politically for the number of poor people to go up while they were in charge, to which the expert describing the new explanation replied that they already are poor, and the new calculation would just be recognizing that fact).
Is this guy actually trying to justify racism?
> “The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.”
> If you keep Orshansky’s logic—if you maintain her principle that poverty could be defined by the inverse of food’s budget share—but update the food share to reflect today’s reality, the multiplier is no longer three.
> It becomes sixteen.
I'm not sure how accurate the methodology is to come up with the specific budget that produces the number "sixteen" here, but broadly speaking, it seems extremely likely that the number is no longer "three", and thus the conclusion that the "poverty line" is broken seems quite likely.