What Would It Take to Eliminate Poverty? | The Professor Is In
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What is the official U.S. poverty line and how is it calculated?
We could get each get offered a job at two pennies per hour for low subsistence. So we're just gonna live lives of grinding misery and then die. While open AI gets infinitely rich because it's the only productive force in the economy. Um well that sounds bad.
Hi Justin. Today we're going to be talking about poverty in America. Last time we spoke, we went through the new census numbers, and you took us all the way back to a government economist in the 1960s who worked out the poverty line by relying on a grocery list and multiplying it by three. We're still using that information, but obviously the world has changed a lot. So today we're going to be answering some audience questions in this episode of The Professor Is In. I'm Augusta and I'm a producer here at Platypus Economics.
And I'm Justin Wolfers. Think about this as office hours. Augusta's just popped into my university office. She's bringing me your questions. Let's begin.
Okay, so let's start with what the actual number is here. How much money does one have to make in the United States in a household to count as below the poverty line?
So it it depends on ex the exact composition of your household. So, you know, a single person living alone is different than a family of four is different than uh three adults living together and all the different family types are are there. Uh last I checked it's yep, I've got it it's thirty two thousand six hundred and forty nine dollars for a a typical family of four, two adults, two kids. It's gonna be different for different family structures. Um, that's for four people, but that means a one person's not gonna be a quarter of that because when there's four people you only need to rent one apartment, you get to go to Costco, all of that. So it it adjusts for all of that. That's using the official poverty measure, which is the one you were just describing, the one that goes back to Molly Orshansky in the nineteen sixties working at the Social Security Administration.
I'm going to spend a moment on Molly. Shout out to my female economists. This is uh a measure that comes from a female economist. Um there's been a lot written about the untold story of women in economics and she's part of it. The more modern version, um, is the supplemental poverty measure and that takes account of the fact that different people have different circumstances. There's different poverty lines for different parts of the country. You're coming to me from Brooklyn, where I believe it's very expensive. Uh You can tell me what a a bacon, egg and cheese costs at your corner deli. It probably costs a whole lot more than it does at mine. Um and certainly a a kale salad. Um it's gonna cost well, you can't really get one where I am.
Um You can't get a kale
salad?
Believe it or not, there are some parts of the country where you can't get a kale salad. There are also some parts where it's hard to get a good cappuccino.
Sure.
Um, that's a a different poverty. We're talking about serious things here, Augusta. Uh. Um Okay. So the supplemental poverty measure takes account of fact there's differences in the cost of living across the country and also different living circumstances. So if you're a renter, how much money you need to get by is different than if you own a house, which is different than if you own a house and you have a mortgage.
How does the Supplemental Poverty Measure differ from the official measure?
So let's go back to the the typical family in America. Family four, two adults, two children. I don't know how typical that is. Most Americans are typically atypical, fair enough. Um, for a renter it's forty one thousand seven hundred and one dollars. So it's a somewhat higher threshold. Which is mechanically why that supplemental measure says there are fewer people in poverty.
Okay. So who decided that? I mean, I know that we've talked about how it's changed over time, but did somebody just sit down and say, This is really the amount that we need today?
Right. So the official measure, that was Molly Yoshansky. She sits down, she says, What does a family need to get by? Um, looking at their food budget and then literally triples it 'cause she says a typical family spends only a third of its income on food.
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Chapters
8 chapters
1
What is the official U.S. poverty line and how is it calculated?
0:00–3:11
2
How does the Supplemental Poverty Measure differ from the official measure?
3:11–5:53
3
Why do poverty thresholds vary across different regions and household types?
5:53–9:29
4
What do Americans think is the true cost of ‘getting by’ versus official numbers?
9:29–12:10
5
How do equity‑efficiency trade‑offs affect redistribution policies?
12:10–15:13
6
Can early‑childhood investment make redistribution more efficient?
15:13–18:05
7
Why is universal basic income debated as a solution to poverty?
18:05–20:43
8
How might AI‑driven wealth concentration influence future poverty policies?
20:43–23:32
Speakers
1 identifiedMore from Platypus Economics with Justin Wolfers
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