LOUISVILLE, Ky.- Poverty is nothing new for Kentucky. The Bluegrass State is the 5th poorest state in the nation.
"Right now in Kentucky, about 18 percent of folks live under the poverty line," said Dustin Pugel, a policy analyst with the left-leaning Kentucky Center for Economic Policy.
That is statewide, but in some regions of the commonwealth, the poverty rate is even higher.
Pugel said, ""The fifth congressional district, so Hal Rogers' district in Eastern Kentucky is the third poorest district in the country. It's got the third highest rate of poverty."
The current poverty level is set at about $12,500 annually for a single person, or $25,750 annually for a family of four. This is the rate the government uses to determine if people qualify for various social services.
Pugel says already the current rate is set lower than is realistic. "For a family in Kentucky to have a modest, but secure living, you need about $60,000. So, right now, it's about about a third of what we really need to be able to raise a family securely."
Jordan Harris from the right-leaning Pegasus Institute says the poverty level shouldn't even be calculated that way.
"What that level really does reflect is based on a sixty-year-old data set, data point." Harris added, "I don't think that a single metric can accurately reflect all of the different government programs. One of the things we've done is, and this has been true of a lot of means tested and welfare programs, is that we put a uniform standard on all of these things."
The poverty level rate generally raises each year due to inflation.
Now, the Trump administration is proposing changing how its calculated to a form called chained consumer price index. Chained CPI means that rather than adjusting for inflation at just a dollar rate, the inflation rate would assume people are switching to lower cost substitutions.
Its a change Harris supports. "What this is going to do, is over the course of the next 10, 15, 20 years is give us a more accurate reflections of that, and for this particular data set, for this particular way in which this data is used, this is the appropriate thing to do with this."
The way chained CPI works is that if people are buying brand name hygiene products, if there's inflation, the person will switch to generic products or buy less. However, for people who are already buying generic items and can't cut back on the amount, there is no substitution to account for, and so it could simply mean less money for people.
Pugel says over the next decade or so this could be devastating for a large percentage of Kentuckians. "It definitely would be a problem later on, and it would make it much harder for people to be able to keep their kids in childcare, for example. It would make it harder to pay medical bills. It would make it harder to keep groceries in the refrigerator. It would literally be harder to keep the lights on for some folks, especially folks who are right there near the edge of that poverty line."
Harris disagrees. He said, "I think that as long as the economy continues to improve that that's not a major concern here in the state of Kentucky. Right now we have 15,000 more open jobs than people searching for work. Wages are going up. The Wall Street Journal just had a report last week about how wages in low-income jobs are increasing at a higher rate than high-income jobs typically had been over the course of this recession, so we're starting to see that take place."
As for the inflation rate, the comment period on that ends Friday. To comment, click here.