The Foreclosure Related Crisis has Made More Elderly Americans Enter the Poverty Zone
The usual level of poverty among the elderly has been 10%. But currently the foreclosure related crisis has led to the numbers being doubled. More elderly Americans are entering the poverty zone. This is as per revision of a 50 year old yardstick for measuring medical expenses and area variations regarding the cost of living.
More reliance is being made on the formula chalked out by the National Academy of Science. Based on its findings the Obama government is calculating the poverty rate of Americans above 65 to be 18.6%. It equals to 6.8 million. It can be compared with the previous 9.7% equaling to 3.6 million. The 1955 formula failed to include in its calculations the increasing medical expenses and other related factors.
Robin Talbert of AARP Foundation said that the problem is hidden. The foundation gives training in jobs and support to seniors coming from the low income category. It is supporting a legislation that would adopt the new NAS formula. He said, “There are still many millions of older people on the edge, who don’t have what they need to get by.”
If the new formula gets the green signal a more accurate picture of poverty in America will come out. It would include daily expenses related to essentials and not merely food. The findings would upset conventional ideas about those who are in greatest need. Ultimately this will lead to shifts in distribution of dollars to the poor focusing on health, housing, nutrition and child-care.
It would lead to the official poverty rate to increase to 15.3% from 12.5% taking under its count 45.7 million persons. These are approximate calculations of the Census Bureau on all citizens and not just the seniors.
The poverty rate of children will slightly decline to 17.9%. The single moms and their kids who receive out of proportion food stamps would experience drop in poverty rates because non-cash would henceforth be included in calculations. The low income group who are employed would witness poverty rate increase since transportation and cost for child care would now come to be included.
The cities like New York, San Francisco and Chicago with high living standards would note increased poverty rates. More of the rural regions in Midwest and the south would most probably see drops in poverty rates.
Due to non-cash and housing benefits the rate of extreme poverty would also drop. Immigrant poverty rates would show increase because of commuting costs and non receipt of government help from various programmes.
