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My Life Is a Lie: How a Broken Benchmark Broke America

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Re: My Life Is a Lie: How a Broken Benchmark Broke America

#31

Post by tbrownaw »

Ignore the bit about food and multipliers. They're not really relevant.

This Orshansky person used estimates and approximations to come up with a rough "this is what it takes to not starve" number, in the absence of sufficient high-quality data to calculate something more precisely.

If you trust inflation / cost of living numbers, they're a measure of how expensive life is overall.

This is the correct way to do things. The methodology of the original SWAG is not relevant to how to update it over time.

.

If you take apart the original estimate into all the different things that made up household expenses, and adjust those separately for price changes and substitutions and such, and our or back together... you're just putting in a ton of extra effort to re-build the "adjust for inflation" calculation from scratch. With tons of room to make mistakes, as demonstrated in the article.

Re: My Life Is a Lie: How a Broken Benchmark Broke America

#32

Post by relaxing »

smeej wrote: post #17

I think this was the section that made me question the accuracy of the rest: > To function in 1955 society—to have a job, call a doctor, and be a citizen—you needed a telephone line. That “Participation Ticket” cost $5 a month. / Adjusted for standard inflation, that $5 should be $58 today. / But you cannot run a household in 2024 on a $58 landline. To function today—to factor authenticate your bank account, to answe…

I think you’re underestimating the age you can leave kids to fend for themselves while you’re at work.

Re: My Life Is a Lie: How a Broken Benchmark Broke America

#33

Post by tbrownaw »

JoshTriplett wrote: post #6

Notable quotes: > “The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.” > If you keep Orshansky’s logic—if you maintain her principle that poverty could be defined by the inverse of food’s budget share—but update the food share to reflect today’s reality, the multiplier is no longer three. > It becomes sixteen. I'm not sure how accurate the methodology i…

> If you keep Orshansky’s logic—if you maintain her principle that poverty could be defined by the inverse of food’s budget share

This is not accurate. There was no such principle. There was an extrapolation technique to use well-measured numbers to calculate a desired but not measured number.

This is not a principle about how things should be calculated, it is a tool for dealing with missing features in a dataset.

Re: My Life Is a Lie: How a Broken Benchmark Broke America

#34

Post by dragonwriter »

JoshTriplett wrote: post #6

Notable quotes: > “The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.” > If you keep Orshansky’s logic—if you maintain her principle that poverty could be defined by the inverse of food’s budget share—but update the food share to reflect today’s reality, the multiplier is no longer three. > It becomes sixteen. I'm not sure how accurate the methodology i…

> I'm not sure how accurate the methodology is to come up with the specific budget that produces the number "sixteen" here, but broadly speaking, it seems extremely likely that the number is no longer "three"

If we assume that general inflation captures the right basket of goods, and that (3 × minimum food) was correct in 1963, then what is actually done (adjusting the result in 1963 by inflation) is correct as well.

That is not what you would get if you computed the minimum food budget now and multiplied by 3; the shifting of the food share of the budget is captured in the CPI.

Re: My Life Is a Lie: How a Broken Benchmark Broke America

#35

Post by scuff3d »

Glyptodon wrote: post #30
smeej wrote: post #17

I think this was the section that made me question the accuracy of the rest: > To function in 1955 society—to have a job, call a doctor, and be a citizen—you needed a telephone line. That “Participation Ticket” cost $5 a month. / Adjusted for standard inflation, that $5 should be $58 today. / But you cannot run a household in 2024 on a $58 landline. To function today—to factor authenticate your bank account, to answe…

I think you're just picking at a detail that doesn't alter the picture much. I think we can all agree that having home Internet and a smart phone matter. Cheap phones cost a few hundred, cheap plans cost $40+/person if you use normal amounts of data, not < 5 gigs, home Internet costs $50+, and renting or buying modem type stuff. Amortizing all that might be under $200, but it's probably damn close (or at least circa…

Yeah the author makes a classic mistake of over arguing the point (potentially because the article was AI generated).

Laser focusing on housing and childcare would have been enough to make the point. Throw healthcare in and it's a solid argument. Get into the weeds on individual expenses and you open yourself up to a lot of nitpicking, which is all over this comment thread

He also way overshoots the target. I absolutely believe the current poverty line is way to low, but trying to argue it should be $140,000 a year is insanity. A lot of people will disregard the overall point of the article just due to that claim alone.

Re: My Life Is a Lie: How a Broken Benchmark Broke America

#36

Post by degamad »

burkaman wrote: post #21
notpushkin wrote: post #18

Earlier quoted context omitted.

> The U.S. Census Bureau releases two poverty measures each September. The first, called the official poverty measure, is based on cash resources. The second, the Supplemental Poverty Measure (SPM), includes both cash and noncash benefits and subtracts necessary expenses (such as taxes and medical expenses). The official poverty measure has remained mostly unchanged since it was introduced in the mid-1960s. In contra…

The premise is that food is a smaller share of the average budget today, so multiplying a food budget by three is too low. But they don't recalculate a new food budget every year, they literally just take the number from 1963 and add inflation. > If you keep Orshansky’s logic—if you maintain her principle that poverty could be defined by the inverse of food’s budget share—but update the food share to reflect today’s…

He isn't arguing that they do that, he's saying that if we accept that that remains a reasonable methodology to extrapolate the data, then we can use that methodology to get an updated estimate. He gets his estimate a couple of different ways, and they end up similar.

Re: My Life Is a Lie: How a Broken Benchmark Broke America

#37

Post by degamad »

tbrownaw wrote: post #31

Ignore the bit about food and multipliers. They're not really relevant. This Orshansky person used estimates and approximations to come up with a rough "this is what it takes to not starve" number, in the absence of sufficient high-quality data to calculate something more precisely. If you trust inflation / cost of living numbers, they're a measure of how expensive life is overall. This is the correct way to do thing…

The problem with the "adjust for inflation" methodology, is that inflation is not equal for all components of the basket. The CPI measures the average inflation of the basket, but if some components have grown significantly differently from others.

In particular, some components of the current household budget were not included in the the original cost estimates. So the "inflation adjusted cost of living" doesn't incorporate those aspects, which is why rebuilding the number from scratch gets a result so wildly different from the inflation adjusted number, instead of being a few percent off due to a different methodology.

Re: My Life Is a Lie: How a Broken Benchmark Broke America

#38

Post by degamad »

fallingfrog wrote: post #20

140k is significantly more money than I've ever made in my life. Where I live, really the line where life becomes a real struggle is about 80k I would say. Below that, you're putting off maintenance, not saving money, the car is accumulating wear that you can't fix, and a medical bill is fatal. People living way below 80k can only be doing so with significant government assistance.

80k for a family of 4?

Re: My Life Is a Lie: How a Broken Benchmark Broke America

#40

Post by orwin »

smeej wrote: post #17

I think this was the section that made me question the accuracy of the rest: > To function in 1955 society—to have a job, call a doctor, and be a citizen—you needed a telephone line. That “Participation Ticket” cost $5 a month. / Adjusted for standard inflation, that $5 should be $58 today. / But you cannot run a household in 2024 on a $58 landline. To function today—to factor authenticate your bank account, to answe…

It seems the author fed a list of documents and points to an AI, asked it to write an argument on it, then the AI hallucinated quotes and tried to badly extrapolate from real data. I think the original point might be true, but it is hard to trust tbh.
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