New report adds greater detail on measure of poverty

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A continuing debate over the best way to accurately measure poverty in the United States led the Census Bureau, in cooperation with the Bureau of Labor Statistics, to design an additional measure.

The Research Supplemental Poverty Measure (SPM), designed two years ago, is mostly based on recommendations from the National Academy of Sciences. It takes into consideration the economic well-being of families as well as how federal policies affect the lives of poor families in our society.

In its second annual report using the SPM, released this month, the Census Bureau compares 2011 supplemental poverty estimates to 2011 official poverty estimates for numerous demographic groups at the national level, and for the first time, the report presents supplemental poverty estimates for individual states.

Unlike the 1960s-designed official poverty measure, which basically calculates the cost of food for families multiplied by three, the new measure, in addition to using information provided by the official poverty measure, also adds information about benefits from many of the government programs designed to assist low-income families and individuals. Some of the benefits considered in the SPM measure include the Supplementary Nutrition Program (food stamps), Social Security, refundable tax credits and low-income home energy and housing assistance programs. Unlike the official poverty measure, SPM takes into account in-kind benefits and other non-discretionary family expenses such as transportation and the cost of health care and child care.

Other results from the report include:

  • Last year's supplemental poverty measure shows a poverty rate 1.1 percentage points higher than the official measure of 15 percent for 2011.
  • Using three-year averages (2009, 2010 and 2011), Colorado's poverty level using SPM is 1.5 percent higher (12.8 percent vs. 14.3 percent).
  • Using SPM measurement, there are more than 3 million more American citizens living in poverty (46 million vs. 49 million).
  • The SPM measure shows poverty rates higher by 4.2 percentage points among citizens who work full time.
  • The number of people 65 years of age and over in poverty is higher when the SPM is used, 12.6 percent compared with 7.8 percent with the official measure see chart).
  • While the official measure shows a 22 percent poverty rate for young people under age 18, the SPM measure shows an improved rate of 18 percent.

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Article posted on November 26, 2012