A more accurate measure of poverty?

Sep 15, 2015

We’ll get an idea of how widely shared the economic recovery is on Wednesday of this week, when the U.S. Census Bureau releases its yearly report on income and poverty in the United States. For the first time, the Supplemental Poverty Measure will come out at the same time.

The official poverty measure ignores regional differences in housing and child care costs, and out-of-pocket medical expenses. About 5 years ago, the Census Bureau created the alternative measure to capture the real cost of living.

“The idea is that it’s a more well-rounded measure of poverty than the official poverty line is,” says Mark Rank, professor of social work at Washington University in St. Louis.

The supplemental measure also includes the benefits families receive, like the earned-income tax credit, food stamps and housing assistance. By including those benefits, the measure tells us how anti-poverty programs are working, says Elizabeth Lower-Basch with the Center for Law and Social Policy.

“They significantly reduce poverty,” she says. “They don’t completely eliminate it, but they make a big dent in it, particularly for families with children.”

If you look at the supplemental measure without those benefits, Lower-Basch says, 30 percent of children in 2012 would have been considered poor. Taking the safety net into account, the rate falls to 19 percent.