The base of the pyramid live on less than $2 per day so without a doubt they are living in extreme poverty. However, a story by NPR reveals that poverty numbers in the US may not be quite at what they should be.
In one case, a single mother earns approximately $23,000 per year which, according to the federal poverty line of $15,825 in 2012, means she’s not living in poverty.
The problem is that amount of money doesn’t go very far in a city like New York.
Author Pam Fessler talks about three problems with the poverty line.
The first is that it doesn’t account for geographical difference. It doesn’t matter if you live in New York or rural South Dakota, for instance.
The second is that it’s based on a 50-year-old formula that assumes Americans spend a third of their income on food. But in today’s terms, the price of food has fallen greatly and people only spend about a sixth of their income on food.
And finally it doesn’t consider government benefits such as food stamps and tax credits.
This essentially means the US can’t accurately describe the number of people living in poverty. How many are at risk of falling even further towards the base of the pyramid? The National Poverty Center found that the number of people in the US living on less than $2 per day increased by 160 percent from 1996 to mid-2011.
In response, NPR reports that the government had started working on a supplemental poverty measure, considering regional differences and government benefits. But it won’t make it in time for when the new poverty numbers come out in September.
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