I believe that some parts of housing are included, like rental costs, which most people around the poverty line are paying instead of a mortgage. Since renting is consumptive instead of asset generating.
But yeah, this doesn’t capture the additional disparity between rental and purchase prices, and that’s huge in trying to own your home.
Inflation is a single percentage based on total cost of living: I agree. But I don’t agree at all that your second point follows from your first? Imagine the original calculation was based on the cost people spent on bell bottom pants each year. And that happened to be accurate at the time (and therefore ended up with an original number similar to the food calculation). If we adjusted that number for inflation, would you say that the new number was still based on the cost of bell bottoms (even though the number would be equal to the one “based on food”). And if so, how can you say that the same number was “based on food” and “based on bell bottoms” at the same time?
To be fair, I did only read about the first 1/3 of the article before I got too annoyed at it and checked the HN comments to see if anyone had the same frustrations I did. I’ve now gone back and read the whole article, and my skepticism for their numbers/calculations remains throughout. I agree with their point generally, that there’s a benefits cliff that undermines the effectiveness of the social safety net, but the way that they get there feels like them pulling numbers out of nowhere.
Also, you’re still making the same mistake that the author did by saying that it assumes that other variables remain static for 60 years. That’s not how this calculation is done. The previous value is multiplied by the change in CPI, which is a measure of the inflation. That inflation measure includes increases in housing, food, etc. Which is the way in which those other variables are coupled back into the metric.
Your horse example actually demonstrates this, but in the opposite way to what you’re saying.
Imagine that 3x horse expenses was a really good metric for how much you needed to survive in 1910. Let’s say that worked out to 1k a year (making numbers up). At this point we don’t have to care how this number was derived, since it’s a really good metric for the poverty line in 1910. Now we take this 1k number and multiple it by the inflation since 1910. Not the inflation in horse maintenance costs (which would be what you’re describing), but the general inflation overall. We arrive at some number. Horse maintenance is now essentially 0% of the average cost of living, but that won’t make this metric incorrect. Imagine that the metric was instead based on 10x the cost of clothes. And that also worked out to about 1k. It’s not like when we multiply this 1k by the CPI change, we’re going to end up with a different number than the 1k*CPI we got from horse maintenance costs. How the original number was derived is not relevant to its current accuracy. This is the fallacy that both you and the article are making.
The more correct question to be asking is why does CPI not account for the cost of living changes we see. Not dunking on a formula because you misunderstand it.
I think you’re misunderstanding my argument. We’re not applying the inflation of food to the previous metric. We’re applying the overall inflation of all costs. Which is way higher than the food inflation. And includes much (but not all) of the increase in housing/etc costs that people have to pay. I think there’s probably a lot to dive into about why CPI isn’t measuring the true cost of living increases, but this article fails to get to that discussion because it misunderstands the calculations.
I think we agree. The poverty line wasn’t “enough” in 1963 either, it was instead a line below which it wasn’t possible to really live without assistance. I agree with the author of the article that the poverty line is misused as standing for what’s “enough” when it doesn’t represent that (edit: and I also agree that it doesn’t seem to have tracked some of the actual increases in costs of living). I just took issue with their misrepresentation of the math of how it’s calculated and what it means. I also think there’s a more interesting conversation to be had about why the inflation metric (CPI) misses the perceived increase in costs of living, but this article did not discuss that. Yes it explained that various things had gotten more expensive, but not why those aren’t being tracked by CPI (which includes housing costs, etc).
I think you’re making the same mistake.
It does not depend at all on people’s mandatory expenses remaining the same items, just that the inflation metric captures the increase in their expense overall.
Do you agree that the 3x food was roughly accurate in 1963? If you do, then it doesn’t matter at all how the number was calculated. Because we’re not re-doing the same calculation with modern numbers. We’re instead just increasing that number by the inflation rate.
I agree that some of those things have increased much faster than inflation, but some things have increased much slower than inflation, and necessarily so, or the inflation metric itself would be much higher. Like food. Food has gotten a lot cheaper, which cancels out some of the increase in housing prices. Inflation overall gives a much better assessment of the increase in the cost of living than the author gives it credit for. It’s certainly not perfect. It might be missing some overall rising costs by including the decline in prices for non-necessities. But that effect is much smaller than 5x that the author claims the metric is off by.
Edit: I’m not arguing that the poverty line calculation is good, or an accurate assessment of the minimum cost of living. I was just annoyed that the logic that the article was using to argue against it was flawed. (In addition to their use of incorrect quotes, averages instead of medians, etc. Averages in particular always is frustrating since income inequality is always also a big point people make, and that necessarily means that average cost of say rent or a home will be skewed high)
Like some people said on HN, the premise of this is based on a misunderstanding of how the poverty line is calculated. They don’t take each year’s grocery expenses and multiply by 3. Instead they take the same 1963 figure and adjust it each year for inflation generally. This means if was an accurate estimate then and the inflation calculation is correct, then it should remain roughly accurate
More details about the k-anonimity process. https://blog.cloudflare.com/validating-leaked-passwords-with-k-anonymity/
The short answer is that they download a partial list of passwords that hash to values starting with the same 5 characters as yours and then check if your password hash is in that list locally. This gives the server very little information about your password if it was not breached and more if it was (but then you should change it anyway), making an elegant compromise
What you learn is that the cost of food now is quite a bit cheaper than it was in 1963.
The error is in assuming this matters to the calculation. The issue is with using CPI, not the supposed basis on food.
If this is difficult to see, maybe try doing the calculation of the metric under a few scenarios. Like imagine food had become 80% of consumer costs. Would the poverty line as calculated now be too high? Let us know what you find out.