The numbers

Many have asked where we came up with the $13-a-day rate for our poverty level. I originally worked it out a month or so ago, so decided to revisit and document. I have to admit that I hope something comes out differently and we actually end up with more money, but, alas, I suppose we could end up with less. But, here goes.

I googled things like "federal poverty level," USDA poverty," "bay area poverty" and such. I always like to get to the history of these things, so was happy to find this article: http://aspe.hhs.gov/poverty/papers/hptgssiv.htm. Back in 1963-64 a Social Secruty Administration employee named Mollie Orshansky developed the first poverty thresholds. Basically, starting with USDA data on what was described as an "economy food plan" she estimated that a family of 3 or more spent about 1/3 of their income on food, and so arrived at a factor of 3 to determine a total income poverty threshold based on the food budget.

Nowadays, the Census Bureau calculates poverty thresholds and other agencies translate those into eligibility criteria for various programs. The Department of Health and Human Services publishes Poverty Guidelines each year in the Federal Register. Here is the 2012 version: http://aspe.hhs.gov/poverty/12fedreg.shtml. This was not available when I did my original calculation.

One thing I had not realized is that the levels for Alaska and Hawaii are higher than for the rest of the country. There are no finer divisions to account for high cost of living in particular cities. That means, for example, that although the cost of living is very high here in the San Francisco Bay Area, we have to use the guidelines for the 48 contiguous states and the District of Columbia. The FR Notice includes interesting comments about how it's not clearly defined whether "income" means before or after taxes. Different programs apply different rules.

So, looking at the 2012 guidelines, the poverty level for a family of 2, based on annual income, is $15,130. Which is about $1260 per month; $290 per week. I haven't found a clear way to tease out food from that, so I went back to Mollie Orshansky's approach and divided the threshold by 3 to arrive at $97 per week, or about $14 per day! Hey, that's a dollar more than I got with the 2011 numbers. So, we'll go with that.

Today, I bought some Taster's Choice instant coffee, on sale at Walgreen's. With that, I can get coffee for about $.07 per cup vs. the nearly $4 per latte I usually spend. I suspect that in a few weeks I'll be weaned from coffee.....