MOST people have an inherent sense of what it means to be poor. But choosing a definition is much trickier. Is poverty an absolute or relative condition? What is a decent standard of living? Such questions have dogged America's social scientists for decades. This month the Census Bureau published a preliminary estimate of poverty, using a new definition. It was 16 years in the making. But it is not quite finished yet.
Poverty means different things in different countries. In Europe, the poor are those whose income falls below 60% of the median. Britain uses three measures: one relative, one absolute and a broader indicator of material deprivation, such as whether a child can celebrate his birthday. The concept of poverty becomes even more slippery when attempting international comparisons. The United Nations' “human- development index” assesses countries across a range of indicators, such as schooling and life expectancy.
America's official poverty measure is far simpler. Developed in the 1960s, the poverty threshold represents the basic cost of food for a household, multiplied by three. A family is judged to be poor if its pre-tax income falls below this threshold. But the official measure provides only a blurry picture. Food spending has become a flimsy reference point—in 2009 groceries accounted for just 7.8% of Americans' spending. The poverty indicator does not account for programmes that help the poor, such as the earned-income tax credit, nor does it adjust for regional variations in the cost of living. In 1995 the National Academy of Sciences recommended changing the measure, but only now is a new one close to being established.
MOST people have an inherent sense of what it means to be poor. But choosing a definition is much trickier. Is poverty an absolute or relative condition? What is a decent standard of living? Such questions have dogged America's social scientists for decades. This month the Census Bureau published a preliminary estimate of poverty, using a new definition. It was 16 years in the making. But it is not quite finished yet.Poverty means different things in different countries. In Europe, the poor are those whose income falls below 60% of the median. Britain uses three measures: one relative, one absolute and a broader indicator of material deprivation, such as whether a child can celebrate his birthday. The concept of poverty becomes even more slippery when attempting international comparisons. The United Nations' “human- development index” assesses countries across a range of indicators, such as schooling and life expectancy.America's official poverty measure is far simpler. Developed in the 1960s, the poverty threshold represents the basic cost of food for a household, multiplied by three. A family is judged to be poor if its pre-tax income falls below this threshold. But the official measure provides only a blurry picture. Food spending has become a flimsy reference point—in 2009 groceries accounted for just 7.8% of Americans' spending. The poverty indicator does not account for programmes that help the poor, such as the earned-income tax credit, nor does it adjust for regional variations in the cost of living. In 1995 the National Academy of Sciences recommended changing the measure, but only now is a new one close to being established.
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