When Mollie Orshansky created a "poverty line" while working for the Social Security Administration in 1963, she used a U. S. Department of Agriculture-created minimum food budget for a family, and multiplied it by three. By 1969 that measure was being used by the Johnson administration in its War Against Poverty, and, although adjustments have been made for inflation, the government still uses it to define poverty in America. Roughly 35 million, or one of every eight Americans, now lives below the poverty line.

Ms. Orshansky, among others, feels that this definition of poverty is inadequate. "I didn't do [the report] with the expectation that anyone would be using it," she has said, "If we want to determine what everyone needs to be able to purchase the minimum--food, health, clothing, or what have you--you'd have to do more than what I did."

Critics claim that the current poverty threshold is biased against working families because it considers only a family's before-tax money income. It also ignores the costs of child care, social security, taxes, and transportation. When a 1995 National Research Council report noted that one in five families beneath the poverty line had a higher income than families who didn't receive benefits such as tax credits and food stamps, the Census Bureau began studying new ways to define the poverty line.

According to Susan Mayer, direction of University of Chicago Joint Center for Poverty Research, "the measure has caused immense misperception among voters about who's poor in this country. We've probably misclassified a number of families with working persons in them as not poor who should be counted as poor."

New methods of classifying poverty proposed by the National Research Council call for updating the poverty line annually, and including consumer spending patterns for food, clothing, and housing for the previous three years. This would take into account changes in the standard of living over the past three decades--which would raise the current level of poor people in working families. Under the new measure, working families would make up 59 percent of the poor, while they currently make up 51 percent.

On One Hand...

Several changes need to be made in the current poverty line by the Office of Management and Budget. Expenses - including Social Security and childcare - should be taken from the total income level. Since some areas are much more expensive than others to live in cost-of-living variations should be included in the determination of the poverty line. Benefits, including food stamps and housing benefits, should be included in income levels. And the working poor should be accounted for: at the current minimum wage, a lot of new workers - the ones who are using the minimum wage to live on - are unable to pay for health care or day care, and they don't get food stamps. Their jobs are frequently low-wage and dead-end. When the economy takes its next downturn, they'll be on welfare again if our government doesn't assist them now.

On the Other Hand...

The current poverty line should remain the same. No family earning $40,000 dollars should be considered poor - either in the United States or in any other country. If Americans are poor at that level of income, it may be because of spending habits: they spend money on VCRs, microwaves and air conditioners when these are all things that, with a little careful budgeting, their parents were able to do without. The problem of poverty doesn't rest with the definition of what poverty is. In our consumption-oriented economy, too many people are driving themselves from middle income into poverty because they spend money that they don't have in the first place.

• Adam Smith defined poverty as the lack of what "the custom of the country renders it indecent for creditable people, even of the lowest order, to be without." Websters Collegiate defines poverty as ranging from "extreme want of necessities to an absence of material comfort."

• According to the USDA, families of three or more spend approximately one-third of their after-tax money income on food. Therefore poverty thresholds for a family of about three would be three times that for the single economy food plan. For two-person families, the cost of the food plan is multiplied by 3.7 to take into account the increased relative cost of maintaining a house. Annual updates of these poverty thresholds are based on price changes of items in the economy food plan.

• Since the U.S. economic boom started in 1991, unemployment is at a 30-year low and by some estimates, the number of millionaires has doubled to 9 million.

• The threshold value for poverty in 1963 for a family of two adults and two children was $3,100. The current poverty line, which represents the same purchasing power as in 1963 according to the statistical policy directives of the Office of Management and Budget, is $16,700.

• [With the recommended NRC changes] people receiving cash welfare would make up 30 percent of the poor, compared with 40 percent now. The poverty rate for the Northeast and the West would be higher than the current measure. The poverty rates for the South and Midwest, meanwhile, would decline.

Websters Collegiate Dictionary, Mother Jones, Prospect, U.S. Department of Agriculture