Reduce Child Poverty

The Federal Poverty Threshold (FPT) is the standard government measure for poverty.  Established in the 1960s, it began with an estimate of minimal food expenses multiplied by three, based on a 1955 survey finding that families spent approximately one-third of their income on food. [i]   Since then, the FPT has been adjusted annually to account for food price inflation, with variations to account for family size. [ii] 

A significant body of research has identified deficiencies in the FPT. [iii]   The FPT’s methodology fails to account for many factors that impact a family's cost of living, including: [iv]

• The rising price of non-food expenses .  The current FPT is built on an estimate of food prices only, which have risen at a much slower rate than the cost of other critical expenses such as housing, medical care, transportation, and child care.

• Regional variations in cost of living .  The current FPT accounts for a higher cost of living in Alaska and Hawaii, but makes no such adjustments for the other 48 states.  As a result, the FPT fails to recognize significant differences in the cost of living between and within states.

• Taxes and public benefits .  The current FPT does not account for the impact of income and other taxes on family income.  Neither does it account for government benefits such as subsidies for food, housing, child care, or health. 

By failing to account for rising prices, high-cost regions, and some taxes, the FPT overestimates a family's ability to purchase necessities.  By failing to account for some tax credits and public benefits, the FPT underestimates a family's resources. [v]