Nickel and Dimed: On (Not) Getting By in America

by Barbara Ehrenreich

The reason for the disconnect between the actual housing nightmare of the poor and “poverty,” as officially defined, is simple: the official poverty level is still calculated by the archaic method of taking the bare-bones cost of food for a family of a given size and multiplying this number by three. Yet food is relatively inflation-proof, at least compared with rent. In the early 1960s, when this method of calculating poverty was devised, food accounted for 24 percent of the average family budget (not 33 percent even then, it should be noted) and housing 29 percent. In 1999, food took up only 16 percent of the family budget, while housing had soared to 37 percent.1 So the choice of food as the basis for calculating family budgets seems fairly arbitrary today; we might as well abolish poverty altogether, at least on paper, by defining a subsistence budget as some multiple of average expenditures on comic books or dental floss.