Like some people said on HN, the premise of this is based on a misunderstanding of how the poverty line is calculated. They don’t take each year’s grocery expenses and multiply by 3. Instead they take the same 1963 figure and adjust it each year for inflation generally. This means if was an accurate estimate then and the inflation calculation is correct, then it should remain roughly accurate
That would only be true if what people had to spend their money on stayed the same, and the author goes through great detail showing that the individual components of what people have to spend their money on to “exist” (i.e. a minimum cost of economic participation) have changed drastically in 60 years. Not only that, some of those pieces (child care, health care, higher education) have increased in cost breathtakingly faster than inflation. Sure, you could reduce that to a statement that “therefore the inflation metric is wrong,” but the author goes on to show what a better, more representative metric would look like and tell us about the economy, and that’s a good discussion mostly orthogonal to whether the inflation calculation is correct.
It does not depend at all on people’s mandatory expenses remaining the same items, just that the inflation metric captures the increase in their expense overall.
Do you agree that the 3x food was roughly accurate in 1963? If you do, then it doesn’t matter at all how the number was calculated. Because we’re not re-doing the same calculation with modern numbers. We’re instead just increasing that number by the inflation rate.
I agree that some of those things have increased much faster than inflation, but some things have increased much slower than inflation, and necessarily so, or the inflation metric itself would be much higher. Like food. Food has gotten a lot cheaper, which cancels out some of the increase in housing prices. Inflation overall gives a much better assessment of the increase in the cost of living than the author gives it credit for. It’s certainly not perfect. It might be missing some overall rising costs by including the decline in prices for non-necessities. But that effect is much smaller than 5x that the author claims the metric is off by.
Edit: I’m not arguing that the poverty line calculation is good, or an accurate assessment of the minimum cost of living. I was just annoyed that the logic that the article was using to argue against it was flawed. (In addition to their use of incorrect quotes, averages instead of medians, etc. Averages in particular always is frustrating since income inequality is always also a big point people make, and that necessarily means that average cost of say rent or a home will be skewed high)
I get you’re saying that they adjust the 1963 cost for inflation. (vs tripling today’s cost of food) I can’t agree if that was enough in that time, because how would I know? But sure, let’s say it was. It doesn’t follow that adjusted for inflation it would be enough now.
As the author wrote, there seems to be significantly more inflation in other expenses than in food. Doing the math on what we think are reasonable expenses can show what a “real” poverty line is.
You’ve missed the point and doubled down on missing it. The 3x metric was right in 1963, but 3x food is still the same metric used to calculate the poverty line. Food has increased by inflation sure, but as the author says, food doesn’t account for 3x the household budget, instead of 33% it’s more like 7 percent. So the poverty line is way off.
The author then goes on to highlight issues with getting from the current poverty line which is mitigated by government subsidies, to that actual poverty line where you need to put in significant extra effort while seeing no actual gains until you reach it.
Wow thanks for explaining that, everyone I know can afford to see a doctor now. All those people I feed a couple times a week don’t n3ed me anymore. Multiple consecutive generations have been cured of the madness of thinking they’ll never get to retire.
Thank you sir. Thank you. You have saved us. You have saved america.
Like some people said on HN, the premise of this is based on a misunderstanding of how the poverty line is calculated.
Look, just because some people on HN turned their brain off, it doesn’t mean you have to listen to them. It’s clear if they said this, they read a tenth of the article at most and then jumped to conclusions. The misunderstanding is theirs, and now yours unless you read and grok the whole article.
They don’t take each year’s grocery expenses and multiply by 3.
Indeed they do not.
Instead they take the same 1963 figure and adjust it each year for inflation generally.
Okay. But what underpins the 1963 figure? That’s his whole point. The figure effectively looked at one variable and assumes that several related others remain static for 60 years.
This means if [it] was an accurate estimate then and the inflation calculation is correct, then it should remain roughly accurate
If it were instead adjusted for inflation since 1910, and the poverty line was based on horse maintenance expenses x3, because it made sense at the time, and it was an accurate estimate then, would this have remained roughly accurate to today? Neigh way José.
The benchmark is not keeping up with modern expenses, nor does it factor in changes to known 1963 variables that the benchmark still presumes are static, effectively pegged at 1963 values.
Just read the whole article. Your future depends on it.
Like some people said on HN, the premise of this is based on a misunderstanding of how the poverty line is calculated. They don’t take each year’s grocery expenses and multiply by 3. Instead they take the same 1963 figure and adjust it each year for inflation generally. This means if was an accurate estimate then and the inflation calculation is correct, then it should remain roughly accurate
That would only be true if what people had to spend their money on stayed the same, and the author goes through great detail showing that the individual components of what people have to spend their money on to “exist” (i.e. a minimum cost of economic participation) have changed drastically in 60 years. Not only that, some of those pieces (child care, health care, higher education) have increased in cost breathtakingly faster than inflation. Sure, you could reduce that to a statement that “therefore the inflation metric is wrong,” but the author goes on to show what a better, more representative metric would look like and tell us about the economy, and that’s a good discussion mostly orthogonal to whether the inflation calculation is correct.
I think you’re making the same mistake.
It does not depend at all on people’s mandatory expenses remaining the same items, just that the inflation metric captures the increase in their expense overall.
Do you agree that the 3x food was roughly accurate in 1963? If you do, then it doesn’t matter at all how the number was calculated. Because we’re not re-doing the same calculation with modern numbers. We’re instead just increasing that number by the inflation rate.
I agree that some of those things have increased much faster than inflation, but some things have increased much slower than inflation, and necessarily so, or the inflation metric itself would be much higher. Like food. Food has gotten a lot cheaper, which cancels out some of the increase in housing prices. Inflation overall gives a much better assessment of the increase in the cost of living than the author gives it credit for. It’s certainly not perfect. It might be missing some overall rising costs by including the decline in prices for non-necessities. But that effect is much smaller than 5x that the author claims the metric is off by.
Edit: I’m not arguing that the poverty line calculation is good, or an accurate assessment of the minimum cost of living. I was just annoyed that the logic that the article was using to argue against it was flawed. (In addition to their use of incorrect quotes, averages instead of medians, etc. Averages in particular always is frustrating since income inequality is always also a big point people make, and that necessarily means that average cost of say rent or a home will be skewed high)
I get you’re saying that they adjust the 1963 cost for inflation. (vs tripling today’s cost of food) I can’t agree if that was enough in that time, because how would I know? But sure, let’s say it was. It doesn’t follow that adjusted for inflation it would be enough now.
As the author wrote, there seems to be significantly more inflation in other expenses than in food. Doing the math on what we think are reasonable expenses can show what a “real” poverty line is.
You’ve missed the point and doubled down on missing it. The 3x metric was right in 1963, but 3x food is still the same metric used to calculate the poverty line. Food has increased by inflation sure, but as the author says, food doesn’t account for 3x the household budget, instead of 33% it’s more like 7 percent. So the poverty line is way off.
The author then goes on to highlight issues with getting from the current poverty line which is mitigated by government subsidies, to that actual poverty line where you need to put in significant extra effort while seeing no actual gains until you reach it.
Wow thanks for explaining that, everyone I know can afford to see a doctor now. All those people I feed a couple times a week don’t n3ed me anymore. Multiple consecutive generations have been cured of the madness of thinking they’ll never get to retire.
Thank you sir. Thank you. You have saved us. You have saved america.
Look, just because some people on HN turned their brain off, it doesn’t mean you have to listen to them. It’s clear if they said this, they read a tenth of the article at most and then jumped to conclusions. The misunderstanding is theirs, and now yours unless you read and grok the whole article.
Indeed they do not.
Okay. But what underpins the 1963 figure? That’s his whole point. The figure effectively looked at one variable and assumes that several related others remain static for 60 years.
If it were instead adjusted for inflation since 1910, and the poverty line was based on horse maintenance expenses x3, because it made sense at the time, and it was an accurate estimate then, would this have remained roughly accurate to today? Neigh way José.
The benchmark is not keeping up with modern expenses, nor does it factor in changes to known 1963 variables that the benchmark still presumes are static, effectively pegged at 1963 values.
Just read the whole article. Your future depends on it.