There is no one-size-fits-all definition of poverty. The poorest people in an industrialized nation may well be richer than the average citizen of a less-developed country. According to the United Nations’ Human Development Report 1996, the average per capita income of the poorest one-fifth of Americans was $5,814 in 1993. That figure is ten times Tanzania’s average per capita income of $580 per year. By Tanzanian standards, Americans in that bottom 20 percent may seem quite well-off. However, by U.S. standards, they are not.

Politicians and social scientists have sought to define poverty for over three decades. In 1965, the government officially adopted the definition set by Mollie Orshansky of the Social Security Administration, who placed the poverty threshold at an income three times the cost of a minimally nutritious diet. The threshold for a family of four in 1996 was $16,036. Similarly, the poverty guidelines established by the U.S. Department of Health and Human Services (HHS) placed the poverty level for a family of four at $16,450 in 1998. (Since 1966, poverty guidelines have been set higher in Alaska and Hawaii.) The poverty rate in 1996, according to the HHS, was 13.7 percent, or 36.5 million Americans.

Although these figures may seem straightforward, experts disagree as to whether they are the most accurate measurements of poverty. Some believe poverty is overestimated, while others claim it is underestimated. Those who say poverty is overestimated argue that certain income sources—including unreported wages and government entitlements such as food stamps, Medicaid, and public housing—are not taken into account when a family’s annual income is measured. Critics also contend that the cost of living is overstated, further skewing the poverty rate. According to Lowell Gallaway, a professor of economics at Ohio University, the poverty rate is