In 1963, Mollie Orshansky took a grocery list, performed some simple arithmetic, and immortalized herself in American economics. She became “Miss Poverty.”
Forty-five years later, her grocery-list formula still is the official definition of poverty in America. Using Ms. Orshansky’s method, the Census Bureau last week reported that 12.5 percent of Americans were poor last year, about the same as the year before.
Given the dramatic rise in fuel and food prices, rising inflation and unemployment numbers, how can that be?
Ms. Orshansky’s definition of poverty is wildly out of date. We don’t really know how many people are poor in America because our measurements are flawed. Still, the outdated formula is used as a benchmark for access to a broad variety of social programs, from food stamps to housing subsidies to Medicaid.

Back in the Elvis era, Ms. Orshansky was a statistician in the Social Security Administration, rooting around for a way to measure poverty. She started out with a grocery list that the U.S. Department of Agriculture said could provide a cheap but nutritious diet for a family in financial stress.
Since the average American family spent about a third of its income on food, Ms. Orshansky multiplied the cost of her grocery list roughly by three. She suggested that number as the cut-off for what a family needed to scrape by; President Lyndon B. Johnson adopted Ms. Orshansky’s yardstick as his own.
A lot has happened in America since then, including a rise in single motherhood and the need for day care, ups and downs in the price of fuel and rent and drastic increases in agricultural productivity. The average family today spends only a seventh of its income on food.
The Census Bureau has tinkered slightly with the poverty formula and adjusts it annually for inflation. But it still is based mainly on Ms. Orshansky’s grocery list. Today, the formula holds that a husband, wife and two children are poor with an income below $21,027.
The figure applies equally to a family in rural Viburnum with a big vegetable garden behind the house as to one in St. Louis, where gardens are rare and rents are higher.

Suggestions to change the formula kick up a storm from liberals and conservatives alike. If you change the poverty cut-off, you change the amount spent on welfare, as well as who receives it. Change the poverty rate, you make the nation’s leaders look like successes — or failures.
Some think the formula over-counts the poor. It ignores certain forms of income, such as food stamps, housing subsidies and the Earned Income Tax Credit, which can add several thousand dollars to income. A college student can be counted as poor even when his parents are paying his bills. A single mother can be counted as poor even if she lives with a well-off boyfriend.
Take those flaws into account, and the official poverty rate looks too high.
Others, however, think the rate is too low. An urban family of four can’t live decently on $21,000, even with food stamps, they say.
Mark Rank, professor of Social Welfare at Washington University, notes that European countries consider people poor if they make half the country’s median income. By that measure, American families earning $30,000 or less would be poor.
“If you do that, you find out that we have the worst poverty in the Western world among developed countries,” he says. The poverty rate in 2005 would have been 28 percent, not 12.6 percent.
In 1995, the National Academy of Sciences recommended a new method of calculating poverty, taking real-life costs into account, but the Clinton administration dropped it like a hot potato.
America needs a way to measure poverty that reflects today’s costs of raising a family. Ms. Orshansky’s grocery list should be sent off to the Smithsonian.

Caption:  Mollie Orshansky