The family that the poverty line was designed around is quickly disappearing

Dated poverty line assumes every family has a housewife that can cook
Getty Images/Vetta

Let's face it: lots of things in society are outdated and the poverty rate is no exception. 51 years ago, Lyndon Johnson and his administration declared a "war on poverty." The absolute poverty line was set up to be the absolute standard of what households need to meet their basic needs. Theoretically, it sounds like a good, logical decision.

Here's why it's not:

The official poverty line came about more due to convenience rather than meticulous and thorough analysis. Economist Mollie Orshansky was working for the Social Security Administration when she developed the current basis for the the poverty rate in 1963. Orshansky decided that the poverty rate would be set at three times the cost of a basic diet because most families spent a third of its income on food and called it the "Orshansky Poverty Threshold." Her calculations came at an opportune time and the Johnson administration adopted the threshold a couple years later.

The family that the poverty line was designed around is quickly disappearing. A writer for The Atlantic found an excerpt from a report by the Social Security Administration described the ideal family living under the poverty line should be able to cut back on kitchen spendings, so long as "the housewife will be a careful shopper, a skillful cook, and a good manager who will prepare all the family's meals at home."

Despite how dated the doting housewife stereotype may be, this report is not from 1960s as you may believe, but actually from 1992. Furthermore, this type of family is no longer prominent. The poverty rate does not take into account the changing family structure or the nature of the population. Single-person households are becoming more popular, as are single-parent families. The housewife-chef-maid trope is being replaced by a hard-working, employed individual who may or may not be female. It also doesn't take into account the ages of these households. The majority of these single-person households consist of either young or elderly persons, which have extremely different spending habits.

SEE ALSO: Millennial parents are the poorest generation in 25 years

The threshold has hardly changed since it was adopted in 1965.
It mostly has been adjusted for inflation, rather than spending habits.Whereas the average family used to spend half of the family budget in 1900 on food and clothing, they now only spend less than a fifth of the budget on those. Families now spend more on healthcare and services than food and clothes. But the poverty line doesn't reflect these consumer statistics.

The poverty rate is based on a pre-tax income and doesn't take into account non-cash benefits, such as Social Security payments. So things like housing subsidies and food stamps, which families spend like cash are ignored, even though they greatly benefit the poor.

These are only some of the problems associated with the outdated poverty line. However, it just shows how hard it is to define and measure such an abstract and broad concept as "poverty." The holes in the equation are so prominent that the Census Bureau has begun publishing a "supplemental poverty measure" or SMP, which is essentially the poverty rate but accounts for additional expenses such as the geographical cost-of-living and medical care. It also considers government benefits, such as food stamps. The number isn't that different than the official poverty rate -- it usually ends up being less than a percentage point higher.

SEE ALSO: The other side of the American dream - where poverty still exists

When a group of researchers from Columbia University applied these SMP standards to history, they found that the United States has actually done better than the original rate lets on when it comes to fighting poverty. The group also found that without these government benefits, the poverty line would have risen from 25 percent to 31 percent from 1967 to 2012 rather than falling from 19 percent to 16 percent.

Sure, 16 percent still isn't good. In fact, it's actually pretty bad. There's no doubt about it - the poverty rate needs to be reevaluated, but these numbers show the progress we've made since 1965 when President Johnson began this initiative. However, it also shows that this war is far away from being won.

Although the U.S. economy has a few problems, it is still miles ahead of other countries'. Here's five reasons why the United States economy is beating the rest of the world:
2 PHOTOS
5 reasons the US economy is beating the rest of the world
See Gallery
The family that the poverty line was designed around is quickly disappearing

1. A ROARING STOCK MARKET

The Fed's easy-money policies ignited a world-beating U.S. stock market rally. Over the past five years, U.S. stocks have easily outpaced shares in Europe, Japan and Hong Kong. That was one of Bernanke's goals in lowering rates. He figured that miserly fixed-income rates would nudge investors into stocks in search of higher returns. Higher stock prices would then make Americans feel more confident and more willing to spend - the so-called wealth effect.

Most economists agree it's worked.

(Photo by Andrew Burton/Getty Images)
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE


More from AOL.com:
A glimpse into rural poverty in the heartland of America
UN states set goal to end poverty, hunger in next 15 years
Poor children's brain develops slower than their wealthier peers'
Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.