A More Accurate Measure of Poverty

Earlier this fall, the Census Bureau released data on poverty using the official measure that has been used since the 1960’s. The data found that 15 percent of all Americans were living in poverty in 2011. In New York, the rate was even higher at 16 percent. But this official measure is flawed in many ways. It does not account for expenses such as taxes, child care, or health care costs, nor does it account for benefits such as food stamps, social security and tax credits.

Last year, the Census Bureau came up with the new Supplemental Poverty Measure, which fixes these limitations by taking into account the effects of government programs, family expenses, and regional differences in housing costs. This more accurate measure of poverty was released today.

Under this refined definition, the number of people living in poverty in the U.S. increased from 46.2 million (under the old definition) to 49.7 million. The resulting poverty rate moved from 15 percent to 16.1 percent. Additionally, New York State is one of 14 states where the poverty measure is worse under the new definition. From 2009-2011, 17.8 percent of New Yorkers were living in poverty, up 1.8 percentage points from the old measure.

With this new Supplemental Poverty Measure, we are provided with a more accurate picture of how expenses such as high housing costs and health care affect poor families. In addition, we can see more clearly how government benefits work to keep people out of poverty. Today’s Associated Press article listed some of the findings:

—If it weren’t for Social Security payments, the poverty rate would rise to 54.1 percent for people 65 and older and 24.4 percent for all age groups.
—Without refundable tax credits such as the earned income tax credit, child poverty would rise from 18.1 percent to 24.4 percent.
—Without food stamps, the overall poverty rate would increase from 16.1 percent to 17.6 percent.

Despite these positive effects of government programs, the nearly 50 million people living in poverty across the country, including 3.4 million in New York, show first-hand that current efforts are not enough.