key term - Mollie Orshansky

Definition

Mollie Orshansky was an American economist and statistician who developed the official poverty thresholds used by the U.S. government to measure and analyze poverty in the United States. Her work in the 1960s laid the foundation for how poverty is defined and calculated in the country.

5 Must Know Facts For Your Next Test

1. Orshansky's poverty thresholds were first adopted by the U.S. government in 1965 and have been used as the official measure of poverty ever since.
2. The thresholds are based on the cost of a minimum food diet multiplied by a factor to account for other necessary expenses, such as housing and transportation.
3. Orshansky's methodology has been criticized for not fully capturing the modern costs of living, leading to the development of the Supplemental Poverty Measure (SPM).
4. The official poverty thresholds are updated annually to reflect changes in the cost of living, but the underlying methodology has remained largely unchanged since the 1960s.
5. Poverty rates calculated using Orshansky's thresholds are an important metric for evaluating the effectiveness of social programs and informing policy decisions related to income support and economic inequality.

Review Questions

• Describe the key aspects of Mollie Orshansky's approach to defining the poverty line in the United States.
  • Mollie Orshansky developed the official poverty thresholds used by the U.S. government to measure poverty. Her approach was based on the cost of a minimum food diet, which she then multiplied by a factor to account for other necessary expenses like housing and transportation. The resulting thresholds, first adopted in 1965, have been used as the official measure of poverty in the country ever since, though they have been criticized for not fully capturing the modern costs of living.
• Explain how the Supplemental Poverty Measure (SPM) differs from the official poverty thresholds developed by Mollie Orshansky.
  • The Supplemental Poverty Measure (SPM) is an alternative measure of poverty that was developed to address some of the limitations of the official poverty thresholds created by Mollie Orshansky. While Orshansky's thresholds are based solely on the cost of a minimum food diet, the SPM takes into account government assistance programs and other expenses not reflected in the official measure. This provides a more comprehensive assessment of a household's ability to meet its basic needs and has led to different poverty rates than those calculated using the Orshansky thresholds.
• Evaluate the role of Mollie Orshansky's work in informing policy decisions related to income support and economic inequality in the United States.
  • Mollie Orshansky's development of the official poverty thresholds has had a significant impact on how poverty is measured and addressed in the United States. The poverty rates calculated using her methodology are a key metric for evaluating the effectiveness of social programs and informing policy decisions related to income support and economic inequality. While the thresholds have been criticized for not fully capturing the modern costs of living, they continue to serve as an important tool for understanding the scope and distribution of poverty in the country. Policymakers rely on this data to allocate resources, design targeted interventions, and assess the impact of economic policies on low-income populations.

Related terms

Poverty Threshold: The minimum level of income deemed adequate for a family to meet their basic needs, as determined by the U.S. government.

Poverty Rate: The percentage of the population living below the poverty threshold, used as a measure of the prevalence of poverty in a given area or population.

Supplemental Poverty Measure (SPM): An alternative measure of poverty that takes into account government assistance programs and expenses not reflected in the official poverty threshold.