BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AJR 22|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: AJR 22
Author: Mullin (D), et al.
Introduced:6/9/15
Vote: 21
ASSEMBLY FLOOR: 58-18, 8/27/15 - See last page for vote
SUBJECT: Federal poverty level measurement
SOURCE: Author
DIGEST: This resolution urges the federal government to take
steps to reform the outdated and inadequate Official Poverty
Measure to better reflect poverty and the unmet needs
demonstrated by the Supplemental Poverty Measure.
ANALYSIS: This resolution makes the following legislative
findings:
1) The Official Poverty Measure is determined by the United
States Census Bureau and is instrumental in determining an
individual's eligibility for a number of government
programs, including the Supplemental Nutrition Assistance
Program; Medicaid; School Lunch Program; Women, Infants, and
Children Program; Housing Assistance; and others.
2) The method we use today was developed in 1964 by Mollie
Orshansky of the Social Security Administration, and that
method used before-tax cash income to determine a family's
resources, which was then compared to a poverty threshold.
3) Other than minor changes, the method has remained the
same over time, despite significant economic and
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governmental changes, including the introduction of Medicare
and Medicaid, the shift from a manufacturing to a service
economy, welfare reform of the 1990's, and the general
stagnation of wages.
4) The Official Poverty Measure is a one-size-fits-all policy
that leads to a distorted perception of poverty and an
inefficient allocation of resources to fight poverty.
5) The Official Poverty Measure does not account for the
increase in child care expenses due to the rise in the
workforce participation of both parents.
6) The Supplemental Poverty Measure was designed to take into
account changes in the United States economy over time,
cost-of-living variations in different parts of the country,
and the changing role of government.
7) The Supplemental Poverty Measure more accurately measures
poverty by using a basic set of goods that includes food,
clothing, shelter, and utilities, adjusted to reflect the
needs of different family types and to account for
geographic differences in living costs to establish what is
known as a poverty threshold.
8) The Supplemental Poverty Measure defines family resources
as the value of cash income from all sources, plus the value
of noncash benefits, including nutrition assistance,
subsidized housing, home energy assistance, tax credits, and
other benefits that are available to buy the basic bundle of
goods, minus the necessary expenses for critical goods and
services not included in the thresholds.
9) The use of the Official Poverty Measure can have a
detrimental effect on policies to combat poverty because it
results in less efficient and less accurately targeted
policies and expenditures.
10) It is vital that we implement a fair poverty measure that
allows us to efficiently allocate resources and focus on
regions and populations that need help the most.
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This resolution urges the federal government to take steps to
reform the outdated and inadequate Official Poverty Measure to
better reflect poverty and the unmet needs demonstrated by the
Supplemental Poverty Measure.
Comments
According to the Assembly Human Services Committee analysis of
AJR 22:
The effects of poverty: Researchers have established that
children who grow up in poverty often show poorer academic
performance, have poorer physical health, poorer mental health,
and lower intelligence quotient (IQ) than children from families
with higher socioeconomic status. Poor children are at greater
risk than higher income children for a range of problems,
including poor socio-emotional functioning, developmental
delays, behavioral problems, asthma, poor nutrition, low birth
weight, and pneumonia. Socioeconomic status is one of the most
powerful risk factors for poor adult health, as well. People
living in poverty suffer disproportionately from nearly all
diseases and have higher rates of mortality.
Families in poverty experience increased chronic stress related
to difficulties in providing for each family member's needs,
food insecurity, living in dangerous neighborhoods and other
factors. Events in daily life associated with living in an
impoverished household and neighborhood that produce a type of
chronic stress can lead over time to wear and tear on the body
and can have a negative impact on the developing brain. A
number of researchers have linked domestic household crowding,
commonly found to be a consequence of lower socioeconomic
status, with higher psychological stress and poorer health
outcomes. Other research shows that stress specifically impairs
working memory and the ability to pay attention.
History of the Official Poverty Measure (OPM): In the early
1960s, amid the early conversations that eventually led federal
anti-poverty policy changes, the U.S. Congress tasked the Social
Security Administration with determining the cost of living for
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seniors and families with young children. A researcher at the
Social Security Administration named Mollie Orshansky proceeded
with a series of research projects, which quickly evolved into
defining a national poverty standard. Prior to her work, the
definition of poverty, which had been set by the Council of
Economic Advisers, was annual family income of less than $3,000.
For purposes of historical context, the average U.S. family
income in 1962 was $6,000 ($2,800 per person), according to U.S.
Census Bureau data. The $3,000 standard for determining poverty
was questioned by researchers and policymakers, as it failed to
take into consideration a number of variables that could
increase or decrease per-person resources, including family
size.
Mollie Orshansky's formula, which has contributed to the OPM
formula for over 50 years, attempted to be less arbitrary than
the $3,000 standard. She developed a measure of poverty by
calculating the cost of a low-cost family food plan, as
determined by the U.S. Department of Agriculture (USDA) in 1962,
and multiplying that value by three to reflect the USDA's 1955
Household Food Consumption Survey, which found that families of
three or more people persons spent an average of one third of
their total income, after taxes, on food. The USDA's food
plans, the Social Security Administration noted, had been used
for decades to represent a translation of the criteria of
nutritional adequacy, and anything below that level would
represent deprivation. Since its development, the formula has
been modified to account for variations in household size, but
it still does not factor in certain variables that might worsen
or improve a family's financial situation.
The poverty level used today is adjusted annually by the
Consumer Price Index to reflect changes in the cost of living
throughout the nation, and is itself used, or some multiplier of
the level is used, as the foundation for setting eligibility
thresholds for numerous federal programs. Programs for which
eligibility relies on the federal poverty level include the
Supplemental Nutrition Assistance Program (SNAP), known as
CalFresh in California, the National School Lunch and School
Breakfast Programs, the Special Supplemental Nutrition Program
for Women, Infants, and Children (WIC), the Low-Income Home
Energy Assistance Program (LIHEAP), and the Children's Health
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Insurance Program, to name a few.
The 2015 federal poverty guidelines provided by the U.S.
Department of Health and Human Services set the poverty level
for a family of three at $20,090 annually. Researchers continue
to contest the accuracy of the measure, as the same level is
applied across the nation (with the exception of Hawaii and
Alaska) despite geographical differences, distinctions in labor
and housing markets, and other factors like child care and work
expenses.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified 9/2/15)
AFSCME, AFL-CIO
California Association of Food Banks
California Primary Care Association
Coalition of California Welfare Rights Organizations, Inc.
United Way of the Bay Area
Western Center on Law and Poverty
OPPOSITION: (Verified 9/2/15)
None received
ASSEMBLY FLOOR: 58-18, 8/27/15
AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Daly, Dodd, Eggman, Cristina Garcia, Eduardo
Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley,
Roger Hernández, Holden, Irwin, Jones-Sawyer, Lackey, Levine,
Lopez, Low, Mayes, McCarty, Medina, Mullin, Nazarian,
O'Donnell, Olsen, Perea, Quirk, Rendon, Ridley-Thomas,
Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber,
Williams, Wood, Atkins
NOES: Travis Allen, Brough, Dahle, Beth Gaines, Grove, Harper,
Jones, Kim, Linder, Maienschein, Mathis, Melendez, Obernolte,
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Patterson, Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Bigelow, Chang, Frazier, Gallagher
Prepared by:Jonas Austin / SFA / (916) 651-1520
9/2/15 11:08:22
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