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More poverty than we thought

Critics of anti-poverty programs have complained for years that poverty measures are flawed because they don’t take into account the effects of these programs in mitigating poverty. They have a point. There is no before and after measurement.

The state looks at income to determine whether people are poor enough to qualify for food stamps, which we call 3SquaresVT in Vermont, or Reach Up (formerly welfare) or Medicaid. But then we don’t look to see whether the recipients, with the help of the benefits, are actually living above the poverty line. They still are counted in the calculation of Vermont’s poverty rate.

There are others things the official poverty estimate misses, too. They are on the cost side. There are cost-of-living increases that haven’t been realistically adjusted since the current poverty measure was adopted more than 40 years ago. There are also costs associated with work—transportation, child care, and health insurance, for instance—that reduce a family’s disposable income and therefore should be counted in any poverty measurement system.

To begin to address the shortcomings of the current estimates, the U.S. Census Bureau released the Supplemental Poverty Measure last week. It will not replace the current system or be used to determine eligibility for various anti-poverty programs. Rather, it will offer a new set of Census statistics that will paint a clearer picture of how Americans are living today.

What the Supplemental Poverty Measure revealed, after adding in benefits and subtracting uncounted costs, was that the U.S. poverty rate is higher than the current official estimate. For the Northeast, the Supplemental Poverty Rate was 14.5 percent, compared to 12.5 percent according to the official estimate. Supplemental Poverty Rates for individual states have not been published yet.

New York Times columnist Charles Blow, who typically grounds his Saturday columns in lots of data, highlighted some key details from the new Supplemental Poverty Measure report last weekend. He pointed out that anti-poverty programs do, indeed, lift many people above the poverty line. Which is all the more reason that we can’t afford to cut them.

Posted by Jack Hoffman on November 14, 2011 at 1:59 pm

One Response to “More poverty than we thought”

  1. Willem Post says:

    Please publish an article indicating the historic buying power of the US minimum wage.