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Super Session: Is the War on Poverty Over?

November 10, 2018 09:10 AM
By Minjung Kim, PhD Student, Department of Public Administration and Policy, American University
Whether or not the war on poverty has been successful is a controversial issue. The session moderated by David Johnson from the University of Michigan discussed the issue of how to measure poverty in a different way and suggested different ways to assess it.
Richard Burkhauser of Cornell University started the presentation with the need to change the definition of poverty. There have been different ways to measure poverty, and the traditional way of measure is the official poverty measure (OPM). According to OPM, the level of poverty reduced greatly since 1963. However, the definition of poverty has been changed, but it is always arbitrary. The reason why the poverty rate has been decreased is that the relative economic growth; it is not easy to measure the poverty.
Tim Smeeding from the University of Wisconsin gave a presentation titled “How did we “win” the war on poverty?”. The reason why poverty got decreased, according to Smeeding, is because it all depends on how we set the poverty line. Smeeding suggested adopting relative poverty, or anchored poverty (combination between absolute and relative poverty). The traditional measure of poverty (OPM) is an inflated measure not being able to capture the real poverty, but the anchored poverty can take a relative measure saying this year and price it back for n years to assess absolute well beginning of poor over that period. The question now is where to set the anchor, and there have been different standard suggested from different sources. We cannot surely argue whether or not the poverty is over because the level of poverty changes depending on what measure we use, and Smeeding opened the options to the audience to choose what the ideal measure is.
Bruce Meyer of the University of Chicago also began his discussion by arguing that different measures say different things. He argued that the program with OPM has CPI bias that poverty thresholds were adjusted by CPI-U which is known as a highly overstated inflation. It has been improved over time, but it still overstates inflation. There is a problem with OPM that it underreports factors like earnings, pensions, and government benefits. Attempts have been made to improve measures of poverty such as adopting income data to approximate consumption. It will take a long time, and still will be incomplete, but it is still an essential part for the improvement of measuring poverty. Meyer ended his presentation by providing a few policy suggestions like identifying gaps in the safety net, identifying where discourages work, and focusing on skills and job search.
Jane Waldfogel from Columbia University also agreed that using a different measure of poverty tells a very different story. As Smeeding suggested, Waldfogel also discussed an anchored supplemental poverty measure (SPM) being a better measure than the OPM. The study conducted by her and her collaborated found that the poverty level dropped in 2014; however, she admitted that the study could not capture the whole picture of the aspects of poverty. Waldfogel concluded her discussion saying that eh war on poverty is not over; however, the government taxed and transfers have done a good job of reducing poverty.
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