Tuesday, August 18, 2009

Poverty and Prosperity Part 2: Poverty Thresholds

A multitude of wage and income measures are produced by the federal government, state governments, and private entities. Many of these measures attempt to gauge the relative prosperity or poverty of Oregon's individuals and households.

While each measure varies in purpose, scope and definition, they all help illustrate the financial situation of Oregon's individuals and families...

Poverty Thresholds: Background
At the federal level, the Census Bureau and the Department of Health and Human Services work together to define a measure of minimum income called a poverty threshold. This threshold is expressed in terms of annual income. Individuals and families who earn less than the poverty threshold are considered impoverished. There are several different thresholds, depending on the size of a family and the age of any children in the household. For instance, a young, single person has a different poverty threshold than a married couple with two teenage children.

The thresholds were originally determined in 1963 based on two factors: (1) food budgets designed by the U.S. Department of Agriculture for families under economic stress, and (2) the average portion of income a family spends on food. Like the minimum wage, the poverty thresholds are updated each year based on inflation.

Poverty Thresholds in Oregon
In 2007, the poverty threshold for a single person was about $10,600 – thus single people whose pre-tax annual income was lower than this amount were considered impoverished. For a family of three (the average family size in Oregon), the threshold was about $16,500.

About 474,200 Oregonians had earnings below the poverty threshold in 2007. They accounted for 12.9 percent of the population. Fewer individuals (388,700) were impoverished in 2000 and they made up a smaller portion of the total population (11.6%). This increase in Oregon’s rate of poverty from 2000 to 2007 followed the national average. Oregon’s, as 12.4 percent of the U.S. population was impoverished in 2000, and 13.0 percent in 2007.

About the poverty thresholds, the Census Bureau says, “although the thresholds in some sense reflect families needs”, they are merely meant as a measurement, and not a complete description of how much people and families need in order to live. The Bureau also notes that some government programs use guidelines or measures other than those provided by the Census Bureau to determine the poverty status of a person or family.

For Wednesday: Part 3 - A Living/Family Wage?

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