U.S. Census Bureau
anomalous and do not take into account important changes in family situations,
includingpayments made for child sup-port and increasing cohabitationamong unmarried couples.
The current poverty thresholds do not adjust for geographic differences in prices across the nation,
although there aresignificant variations in pricesacross geographic areas.To address these weaknesses, theNAS panel recommended chang-ing the definition of both thepoverty thresholds and familyresources that are compared withthose thresholds to determinepoverty status. One of the goalsof the NAS panel was to producea measure of poverty that explic-itly accounted for governmentspending aimed at alleviating thehardship of low-income families.Thus, taking account of tax andtransfer policies, such as the foodstamp program/SNAP and theearned income tax credit (EITC), themeasure would show the effects of these policies on various targetedsubgroups, for example, familieswith children. The current officialmeasure, which does not explicitlytake account of these benefits,yields poverty statistics that areunchanged regardless of many of these policy changes.In 1999 and in 2001, the U.S.Census Bureau released reports thatpresented a set of experimentalpoverty measures based on recom-mendations of the 1995 NAS panelreport (Short et al., 1999, Short,2001). Some additional variationson that measure were included inorder to shed light and generatediscussion on the various dimen-sions included in the proposedrevision. Comparisons were madeacross various demographic sub-groups in order to illustrate howtheir poverty rates were affected bythe different measures. That worksuggested that with these newmeasures there would be a some-what different population identifiedas poor than is typically describedby the official poverty measure.This new poverty population wouldconsist of a larger proportion of elderly people, working families,and married-couple families thanare identified by the official povertymeasure.
In March of 2010, an InteragencyTechnical Working Group (ITWG)listed suggestions for a Supple-mental Poverty Measure (SPM). TheITWG was charged with developinga set of initial starting points topermit the Census Bureau, in coop-eration with the Bureau of LaborStatistics (BLS), to produce the SPMthat would be released along withthe official measure each year.Their suggestions included:•The
shouldrepresent a dollar amount spenton a basic set of goods thatincludes food, clothing, shelter,and utilities (FCSU), and a smalladditional amount to allow forother needs (e.g., householdsupplies, personal care, non-work-related transportation).This threshold should be calcu-lated with 5 years of expendituredata for families with exactlytwo children using ConsumerExpenditure Survey data, andit should be adjusted (using aspecified equivalence scale) toreflect the needs of differentfamily types and geographicdifferences in housing costs.
These experimental poverty measureshave been updated regularly and are availableat <www.census.gov/hhes/povmeas/methodology/nas/index.html>, accessedSeptember 2011.
Adjustments to thresholdsshould be made over time toreflect real change in expendi-tures on this basic bundle of goods at the 33rd percentile of the expenditure distribution.•
SPM family resources
shouldbe defined as the value of cashincome from all sources, plusthe value of in-kind benefitsthat are available to buy thebasic bundle of goods (FCSU)minus necessary expenses forcritical goods and services notincluded in the thresholds. In-kind benefits include nutritionalassistance, subsidized housing,and home energy assistance.Necessary expenses that mustbe subtracted include incometaxes, social security payrolltaxes, childcare and other work-related expenses, child supportpayments to another household,and contributions toward thecost of medical care and healthinsurance premiums, or medicalout-of-pocket (MOOP) costs.
The ITWG stated further thatthe official poverty measure, asdefined in Office of Manage-ment and Budget (OMB) Statisti-cal Policy Directive No. 14, willnot be replaced by the SPM. Theynoted that the official measure issometimes identified in legislationregarding program eligibility andfunding distribution, whilethe SPM will not be used in thisway. The SPM is designed toprovide information on aggregatelevels of economic need ata national level or within largesubpopulations or areas and,
For information, see ITWG,
Observa- tions from the Interagency Technical Working Group on Developing a Supplemental Poverty Measure
(Interagency), March 2010, availableat <www.census.gov/hhes/www/poverty/SPM_TWGObservations.pdf>, accessedSeptember 2011.