Food defined poverty for 57 years. Advocates, families want more realistic guidelines.

The federal government’s outdated poverty guidelines are leaving thousands of North Carolina families to fend for themselves when a more realistic approach could help them be financially stable, advocates say.

The poverty guidelines are based on family size and income, and are used to distribute funding for assistance programs, including food and health care benefits. Each program is different, with some restricting eligibility to 100% of the poverty line, while others assist families earning a bit more.

The goal is to help families gain financial footing so that they can eventually become self-sufficient.

But some families who rise above the poverty level can find themselves in an eligibility gap, earning too much for the programs they were receiving, but now having to pay extra expenses because they no longer receive assistance. It can leave some families worse off than when they were receiving benefits, advocates said.

Those families include the “near poor,” who generally earn up to 125% of the poverty guidelines — now $28,788, or nearly $14 an hour, for a family of three — and risk falling into a cycle of being in and out of poverty.

It can be “incredibly exhausting” to know “you’re making progress, and then you step into a situation that you have no control over, and it sets your family back,” said Beth Messersmith, North Carolina campaign manager for the advocacy group MomsRising.

If multiple people are having that same problem over and over, “it’s not a series of individual failings,” she said. “It’s a systemic problem that needs a policy solution.”

Defining poverty in America

The national poverty guidelines, established in 1965 as part of President Lyndon Johnson’s War on Poverty, assumed a family would spend one-third of its income on food and multiplied that by three to cover total expenses.

The only data it was based on was a 1955 survey of how families spent their grocery dollars when facing a financial crisis, without considering the cost of housing, taxes and other bills.

The housewife of a family so poor it could only afford an austere food budget was expected to “be a careful shopper, a skillful cook, and a good manager who will prepare all the family’s meals at home,” according to a 1963 report, “Children of the Poor.”

The guidelines have since been adjusted for inflation, but otherwise remained unchanged for the last 57 years.

In 2009, the Census Bureau developed the “supplemental poverty measure,” which factors in modern family needs, tax credits and non-cash benefits, such as food stamps. It is used to identify where the official poverty measure falls short, but has not replaced it.

A single mother with two children in 1965 qualified for government assistance if she earned less than $2,514 a year.

That’s the equivalent of $23,876 in 2022 dollars, according to the federal Consumer Price Index Inflation Calculator. The current federal poverty level is $23,030 for a family of three.

Politics drives poverty discussion

Mollie Orshansky, the U.S. Department of Agriculture analyst who wrote the poverty guidelines, called them “a conservative underestimate” of how much income families need. She unsuccessfully argued for Congress to adopt a less-stringent food budget.

“I wanted to show what it was like not to have enough money,” Orshansky said in a 2001 interview. “It’s not just that the poor had less money — they didn’t have enough. I knew you couldn’t spend for one necessity without taking away from another.”

In her 1968 report, “Demography and Ecology of Poverty,” Orshansky also took aim at the politics blocking a more realistic approach, which would have allowed more people to meet the poverty definition.

“Unlike some other calculations, those relating to poverty have no intrinsic value of their own. They exist only in order to help us make them [people experiencing poverty] disappear from the scene,” Orshansky said in the report. “With imagination, faith and hope, we might succeed in wiping out the scourge of poverty even if we don’t agree on how to measure it.”

It would have been politically unacceptable for the Johnson administration to back revised poverty thresholds in 1968, modern researchers contend, after announcing that the War on Poverty had cut the number of poor Americans by 5.6 million in three years.

The revised standards could have identified another 2.8 million people as poor and necessitated spending more money on programs to serve them, the University of Wisconsin-Madison Institute for Research on Poverty reported.

A realistic picture of income

Advocates want realistic federal guidelines, including help at up to 200% of the poverty level, or $46,060 for a family of three.

Some programs already use that approach, including Temporary Aid to Needy Families, or North Carolina Work First, which provides two years of assistance to people who are working, looking for work or in school. Other federal food, education and health care assistance programs accept families at up to 185% of the poverty level.

Another approach gaining interest is the Living Income Standard, which the N.C. Budget & Tax Center defines as a modest income that pays the bills but doesn’t provide a cushion against unexpected expenses or job loss.

Over half of Americans are living paycheck to paycheck as inflation approaches a record-setting high, according to a May report from online lending company LendingTree. That includes 30% of people earning $250,000 or more a year, the study said.

In Wake County, the living wage for two adults working 40 hours a week and raising two children is $26.91 an hour per parent, according to the Living Wage Calculator created by the Massachusetts Institute of Technology.

But one adult working 40 hours and raising two children would have to earn $48.25 an hour, because single parents have to work almost twice as many hours as two working parents for the household to earn a living wage, experts said.

On the other end of the spectrum, two parents with two children in Bertie County, one of the state’s poorest counties, would each need to earn $21.19 an hour, the calculator shows.

One adult with two children would need to earn $36.80 an hour.

A family’s success is not just about dollars and cents, but also about whether their children will contribute to or become a burden on society, advocates said.

At a recent legislative news conference, Heba Atwa, advocacy manager with the nonpartisan N.C. Budget & Tax Center, explained that children experiencing poverty before age 5 are twice as likely to experience poor health into adulthood.

Children in the poorest 20% of urban populations are twice as likely as children in the richest 20% of urban populations to die before their first birthday, she said, and nearly 1 in 4 North Carolina children do not get enough to eat.

“What it takes to make ends meet has to be grounded in the actual costs that a household faces on a daily and monthly basis. These actual costs are growing, and income needs to keep up,” Atwa said.