In 1963, food was the beginnings of the definition of poverty. The poverty threshold was defined by the minimum food diet.
Today, that is still viewed as a valid perspective, but, applied with today's dollars. Basically the CPI (consumer price index) helps define poverty.
There is also a second level of measurement in the USA beginning in 2009 called the SPM (The Supplemental Poverty Measure). It is somewhat more realistic in that more needs are applied.
Before Conservatives get all bent out of shape and try to say the government is being robbed by carpetbaggers, this is an additional measure. It does nothing to determining the poverty threshold.
The SPM started to look at the fact labor, wages and poverty were all related. It takes labor and wages to raise people out of poverty. So, poverty doesn't happen in a bubble and isolated from the rest of society. 2008 saw the largest recession in USA history. We were on the verge of a depression and quite possible an irretrievable. By incorporating many aspects of economics and poverty, the storm could be headed off.
In 2010, an Interagency Technical Working Group (click here) (which included representatives from the Bureau of Labor Statistics (BLS), the Census Bureau, the Economics and Statistics Administration, the Council of Economic Advisers, the U.S. Department of Health and Human Services, and OMB) issued a series of suggestions to the Census Bureau and BLS on how to develop a Supplemental Poverty Measure. Their suggestions drew on the recommendations of a 1995 National Academy of Science report and the extensive research on poverty measurement conducted over the past 15 years. The official poverty measure, which has been in use since the 1960s, estimates poverty rates by looking at a family's or an individual's cash income. The new measure will be a more complex statistic incorporating additional items such as tax payments and work expenses in its family resource estimates. Thresholds used in the new measure will be derived from Consumer Expenditure Survey expenditure data on basic necessities (food, shelter, clothing and utilities) and will be adjusted for geographic differences in the cost of housing. Unlike the official poverty thresholds, the new thresholds are not intended to assess eligibility for government programs. Instead, the new measure will serve as an additional indicator of economic well-being and will provide a deeper understanding of economic conditions and policy effects.
