The U.S. Commerce Department recently announced the Census Bureau is developing a new, unofficial poverty measure to go alongside the current poverty measure.
This is a change advocates have been waiting to see for years as the current measure is far out of date.
The new measure will not replace the official measure calculated each year by the U.S. Census Bureau or the official poverty guidelines published each year by the U.S. Department of Health and Human Services, but it will be published annually along with the official measure.
The current poverty measure does not take into account the things it takes for a family to live. It only considers pre-tax cash income and is adjusted each year for inflation using the Consumer Price Index.
The current measure was developed in the 1960s and is based on the U.S. Department of Agriculture’s economy food plan. This food plan was the lowest estimate of what a family needed to feed themselves, but was not necessarily sufficient for long-term nutrition. At the time, it was estimated that the average family would spend approximately one-third of their total net income on buying food using this plan.
The supplemental measure, due to come out in the fall of 2011, is based roughly on a measure the National Academy of Sciences developed in 1995. This measure takes a lot more into account, such as:
- Assistance received from food assistance programs, housing vouchers, energy assistance and tax credits;
- foster children (the official measure only includes relatives by birth, marriage, or adoption);
- living expenses; and
- geographic differences in the cost of living.
Since this new measure looks at a lot more things, it is thought it will cause the percentage of people in poverty to go up since the amount a family must earn to not be below the poverty level will go up.
The new measure will not, however, impact program eligibility. This means, a family with income higher than the current poverty level may be in poverty by the supplemental measure, but still not qualify for assistance programs since a family will have to be even poorer to get help.
This overhaul is long overdue. While the current measure will remain the official poverty measure, it will be put in perspective by the supplemental measure. The current measure is severely outdated and fails to take into account the things that a family or individual needs to sustain a basic standard of living besides food–such as housing, utilities, clothes, and transportation.
So while the poverty rate will probably go up, this measure will give a clearer picture of what poverty really looks like in America.