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The official way America calculates poverty is deeply flawed


For lyndon johnson to wage a successful war on poverty, he first needed to define it. The brainy work was done by Mollie Orshansky, a statistician for the Social Security Administration, who developed the first federal poverty line in 1963. Ms Orshansky’s method was plausible enough for the times. From a survey conducted in 1955, she calculated that families would typically spend a third of their household budgets on food. So she computed the cost of bare-essentials food plans for families of varying sizes and multiplied these thresholds by a factor of three. These numbers, after simple annual adjustments for inflation, are the modern poverty lines used by federal government.


Source: The Economist (2019). The official way American calculates poverty is deeply flawed.