Poverty is (really) on the Increase among Older Adults

Having $100 in San Diego is not the same as having $100 in Wichita, Kansas. Anyone can tell you that. But the federal government has ignored this for the past four decades.

The Federal Poverty Level, originally developed in 1963-1964 by Mollie Orshansky of the Social Security Administration, took the dollar costs of the U.S. Department of Agriculture’s economy food plan for families of three or more persons and multiplied the costs by a factor of three. As such the federal poverty level does not take into account housing costs, differences in living expenses across the country, child care, health care costs, medications and transportation. For older adults, the cost of food is the smallest cost when compared to housing costs, medications and health care—therefore the Federal Poverty Level becomes meaningless.

The 2010 Current Population Survey reported 43.6 million people living in poverty—the largest number in the 51 years for which poverty estimates have been published.

Surprisingly, the same report shows that between 2008 and 2009, poverty increased for children under age 18 (from 19.0 to 20.7 percent) and people aged 18 to 64 (from 11.7 to 12.9 percent), but decreased for older adults (from 9.7 to 8.9 percent).

Such statistics contrast wildly with today’s reality. Hardship among older adults can be gauged by increases in homelessness, having to return to work, demand for subsidized housing and requests for economic assistance. In response to the imprecision of the Federal Poverty Level, the National Academy of Science developed a new formula it hopes will replace the current one. This January, the federal government officially acknowledged the need to improve the outdated federal poverty level by releasing a ‘Supplemental Poverty Measure.’
California could not wait, having already embraced an alternate formula called the Elder Index. This index, calculated by the UCLA Center for Health Policy Research on behalf of the Insight Center for Community Economic Development, and Wider Opportunities for Women shows that the cost of living for California seniors far outpaces the Federal Poverty Level. The inadequacy of the Federal Poverty Level is important to California’s older adults as it determines eligibility for many public programs, determines funding allocations for other programs, and is used as an evaluation measure in determining program effectiveness.

The Elder Index estimates that 18.6 percent of Americans over 65 live below the poverty line, which translates to 6.8 million older adults. This index is more accurate than either the antiquated Federal Poverty Level or the Supplemental Poverty Measure because it takes into account the costs of child care, health care and transportation.

The Elder Index could take on added significance at a time when the government is flaunting an overhaul of Medicare and Social Security as its best hope for reducing the ballooning federal debt. With the potential to add more older Americans to the ranks of the poor, the numbers may underscore a need for continued—if not expanded—old-age benefits.

Mario Garrett, Ph.D., is a professor of gerontology at San Diego State University and is currently on sabbatical at the University of Melbourne, Australia. He can be reached at mariusgarrett@yahoo.com