STATISTICIANS IN HISTORY
as a statistician for the New York City Department of Health, working
on a survey of the incidence and therapy of pneumonia.
How Mollie Orshansky
Talking about her government career, Orshansky once comment-
Developed the Poverty Thresholds
ed, “I basically always worked with women, except when I was in the
war agencies [the National War Labor Board during World War II
When Orshansky developed her poverty thresholds, she
and the Wage Stabilization Board during the Korean War].” During
made use of information she had worked with at the U.S.
World War II, in particular, large numbers of men left civilian jobs to
Department of Agriculture (USDA). She based her thresholds
serve in the military. As a result, a number of female workers were able
on the economy food plan, which was the cheapest of four
to get jobs that would not have been open to them under ‘normal’
circumstances. Describing the situation for female federal workers,
food plans (hypothetical food budgets providing nutritious
Dorothy Rice, a colleague of Orshansky’s, later said, “Any female that
diets at different cost levels) developed by USDA.
had anything on the ball really did very well during the war. All the
From a finding of USDA’s 1955 Household Food Consumption
men went to the war and we had to carry on.”
Survey (the latest such survey available during the early
In March 1943, Orshansky secured a job at the U.S. National War
1960s), she knew families of three or more persons had spent
Labor Board as chief of the Program Statistics Division of the Research
approximately one-third of their after-tax money income on
and Statistics Branch. She planned and executed the collection and
food in 1955. The way in which she used this survey finding
analysis of data required for the board’s decisions on wage adjustments
and the effects of the board’s stabilization activities. She stayed in this
was by considering a hypothetical average family that was
job until September 1945, when the operations of the board were
spending one-third of its income on food and by assuming
being terminated.
the family had to cut back on its expenditures sharply. She
From September 1945 to March 1951, Orshansky worked as
assumed expenditures for food and non-food would be cut
a family economist at the Bureau of Human Nutrition and Home
back at the same rate so the family would continue to spend
Economics of the U.S. Department of Agriculture (USDA). She con-
a third of its income for food.
ducted research in family consumption and levels of living, carrying
When the food expenditures of the hypothetical family
out a variety of assignments. She was in charge of preparing data on
reached the cost of the economy food plan, she assumed
the estimated value of household furnishings and equipment on farms
for the department’s balance sheets of agriculture for 1947–1950.
the amount the family would spend on non-food items
In 1948, Orshansky and a colleague were responsible for respond-
would also be minimal, but adequate. (Her procedure did
ing to letters from members of the public asking how they could make
not assume specific dollar amounts for any budget category
ends meet on their existing income in the face of the severe (by U.S.
besides food.) Following this logic, she calculated poverty
standards) post–World War II inflation. Orshansky and her colleague
thresholds for families of various sizes by taking the dollar
would send the letter writers pamphlets about preparing a family bud-
costs of the economy food plan for families of those sizes and
get and planning low-cost and moderate-cost meals using USDA’s
multiplying the costs by a factor of three—the “multiplier.”
food plans—hypothetical food budgets providing nutritious diets at
(She followed somewhat different procedures to develop
different cost levels. (This shows Orshansky was working with USDA’s
thresholds for two-person and one-person units.)
food plans at least 15 years before she was to use them to develop her
poverty thresholds.)
She differentiated her thresholds not only by family size, but
About 1949, Orshansky carried out an assignment to update a stan-
by farm/nonfarm status, by the gender of the family head, by
dard budget (an estimate of necessary living costs) for a single work-
the number of family members who were children, and (for
ing woman in New York. In June 1950, she presented a paper titled
one- and two-person units only) by aged/non-aged status.
“Equivalent Levels of Living: Farm and City” at the annual meeting
The result was a detailed matrix of 124 poverty thresholds, later
of the Conference on Research in Income and Wealth (CRIW). Her
reduced to 48.
paper and the other papers presented at the meeting (including one
by Milton Friedman) were published in volume 15 of CRIW’s annual
To avoid confusion, the preceding explanation has been
(and still continuing) series, Studies in Income and Wealth.
phrased in terms of the economy food plan. However,
In March 1951, during the Korean War, Orshansky secured
Orshansky actually developed and discussed two sets of
a job at the U.S. Wage Stabilization Board as the director of the
poverty thresholds, one derived from the economy food plan
Program Statistics Division of the Office of Economic Analysis. She
and one derived from the somewhat less stringent low-cost
planned and directed the board’s statistical program until August
food plan. (The latter set was the one she preferred.) It was the
1953, when the operations of the board were being terminated due
lower of the two sets of poverty thresholds—the set derived
to the end of the war.
from the economy food plan—that the Office of Economic
In 1952, while Orshansky was working at the U.S. Wage
Opportunity adopted as a working definition of poverty in
Stabilization Board, she was elected a member of the Econometric
May 1965. One probable reason for the adoption of the lower Society (an international society for the advancement of economic
set of thresholds was that the lower set yielded approximately theory in its relation to statistics and mathematics). Of the 73 can-
the same number of persons in poverty as the Council of didates for election to membership in 1952, Orshansky was the
Economic Advisers’ $3,000/$1,500 poverty line. only woman.
16 AMSTAT NEWS SEPTEMBER 2008
SEPTEMBER AMSTAT FINAL.indd 16 8/20/08 2:26:55 PM
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