The new measure places income thresholds for poverty on a built-in escalator that rises automatically in direct proportion to any improvement in the living standards of the average American. So even if the real income of every single American were to double, the new measure would show no drop in poverty because the income thresholds also would double.
The result is that, over the long term, poverty can be reduced only if the incomes of the “poor” are rising faster than the incomes of everyone else. The old measure told us how much one household could purchase; the new measure tells us how much one person can buy relative to others.
The new system measures income “inequality,” not “poverty.” But the Left refuses to call this an “inequality index” and insists on using the emotionally charged term “poverty” instead. That’s because the typical American voter isn’t willing to increase welfare spending, taxes and deficits to reach the liberals’ goal of equalizing incomes.
Read more in the paper by Robert Rector and Rachel Sheffield, “Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today?“
Source material can be found at this site.