Census: New approach shows more are poor
More Americans than thought -- an estimated 2.5 million of them -- were poor in 2010 under a new poverty calculation released by the U.S. Census Bureau Monday that sought to address criticisms of the current measure many experts call outdated.
An experimental, supplemental measurement with "many moving parts," released by the Census Bureau in collaboration with the Bureau of Labor Statistics, estimated 49.1 million people, or 16 percent of the nation's population, were poor. That was 2.5 million more than estimated by the official measurement released in September, where 15.2 percent, or 46.6 million people, were poor, according to revised figures. The supplemental measure provided national-level data only.
The supplemental measure does not replace the official measure -- established in the mid-1960s and only updated by inflation -- and will not be used to determine eligibility for government assistance programs or allocations of funds.
Rather, it is an "experimental poverty measure designed to address criticisms of the official measure," Kathleen Short, a research economist with the Census Bureau, said in a teleconference Monday from Washington. The bureau said the supplemental measure could "better reflect contemporary and social and economic realities."
Though the supplemental measure does not replace the official one, several experts said it shows how government aid has helped lift some families above the poverty line.
"Most importantly, we can use this new measure to see the effect of government programs," said Ron Haskins, a senior fellow at the Brookings Institution, a public policy think tank in Washington. For instance, he said the earned income tax credit for low-income workers "reduces child poverty by 20 percent, and you couldn't tell that from the current measure."
To Pearl Kamer, chief economist for the Long Island Association, a business and civic organization, the supplemental measure was an imperfect tool to assess poverty on high-cost Long Island. Nevertheless, she saw some advantages over the official measure.
"By including work-related expenses, such as transportation, which is expensive on Long Island, and child care, which is very expensive on Long Island, you are getting closer to a truer poverty measure. But there's still a long way to go. . . . You can be well above the official poverty line [on Long Island] and still be struggling."
The supplemental measure goes beyond the official one by including not just cash income in calculations, but also noncash benefits, such as food stamps, subsidized housing, home energy assistance and tax credits -- a change that is long "overdue," said Diana Furchgott-Roth, senior fellow at the Manhattan Institute -- offset by a broader array of expenses than is recognized by the official one, which also includes out-of-pocket medical expenditures. The supplemental also recognizes geographic differences in housing costs.
How the Official Poverty Measure and the Supplemental Poverty Measure defines income:
OFFICIAL Gross (before-tax) cash income from all sources
SUPPLEMENTAL Gross money income, plus the value of federal, in-kind benefits, such food stamps, school lunch, housing subsidies, energy assistance and tax credits; minus income and payroll taxes and "nondiscretionary expenses," such as work-related transportation and child-care expenses.
SOURCE: U.S. CENSUS BUREAU