Texas Poverty

Texas Poverty

The term poverty is generally used to describe a condition of economic hardship, but it has a technical use as well: to define a specific low-income level for various family sizes. Many social services providers in Texas use this technical measure of poverty to determine eligibility for their programs. The U.S. Census Bureau establishes annual income levels to measure poverty and estimate the number of poor people. People in families with income below the federal poverty levels are considered poor. The U.S. Department of Health and Human Services uses these thresholds to set income guidelines, and are referred to as the “federal poverty level” (FPL). Private organizations also use these guidelines to determine eligibility for their services to low-income families. The poverty guidelines were originally designed to reflect the minimum amount of income that American households need to subsist. The equation to derive this amount is: multiplying by three by the cost of food for each family size. This method for determining household budget needs was established in the early 1960s based on the assumption that the cost of food accounted for one-third of household spending. Although the poverty guidelines are updated annually for inflation, they are still based on a food-cost-to-income ratio of 1 to 3, despite significant shifts in household expenses. For example, the cost of housing as a share of household income has increased significantly since the 1960s, and families today are more likely to have child care expenses. They, most likely, also pay a much higher share of health care costs than was typical in the 1960s. Yet, food costs remain the only expense considered in determining how much income today’s families need to make ends meet. In addition, except in the case of Alaska and Hawaii, the guidelines do not take into account geographical differences in the cost of living, or the effects of a rising standard of living. Because of these weaknesses,...