The problem

Even after substantial post- COVID economic recovery, 38 million individual Americans (11.6 percent) live in poverty according to the federal measuring-stick, known as the Federal Poverty Level (FPL). This measuring- stick overlooks key aspects of food insecurity but is nevertheless consequential in determining how poverty funds are distributed.

Food is the most basic need for families. The origin of the FPL, described in this chapter, recognized this fact. But the FPL incorporated two flawed assumptions. The first assumption was that food prices would inflate at the same rate as all other goods and services. The second assumption was that poor people would spend a constant fraction of their income on food, paying the same prices for food as better- off Americans do. In fact, food prices have recently inflated faster than other goods, and people in poverty are likely to have more trouble finding food and to pay higher prices for the food they find.

The FPL affects families’ eligibility for social safety net programs. All federal agencies are expected to use the FPL or a modification of FPL to qualify individuals and families to receive Medicaid, free school lunches, Head Start, and other safety- net programs.

Entire communities qualify for federal poverty funding based on the proportion of their residents earning less than the FPL. Persistent poverty counties have smaller populations and higher proportions of under-represented minorities, and they are more likely to be rural. The 409 persistent- poverty counties, so designated by the application of the FPL, are eligible to receive billions of dollars from 247 different federal programs. These programs support local infrastructure such as public works and technology upgrades. The flaws in the FPL make it likely that additional counties might qualify under a revised measure. By underestimating poverty, the FPL results in inadequate funds that are inequitably distributed among communities.

Potential solutions include strong leadership from the White House, cooperation among a dozen federal agencies, changes in federal law, action by state and local leaders, and voter vigilance. This chapter outlines the origin of the problem and the steps that will improve it.