Poverty researchers have been debating alternatives to the traditional poverty rate for years. So it’s not surprising that some people wondered why we chose the particular method that we used for today’s article about poverty.
Under guidelines established by National Academy of Sciences, the Census Bureau publishes eight alternative methods of calculating poverty. They are broadly similar. All take a fuller accounting of economic well-being than the official poverty measure does. They include benefits the official measure ignores, like food stamps and tax credits. And they subtract taxes, work expenses and out-of-pocket medical costs, which the official measure does not.
They differ in part by the way they account for inflation, with four using the Consumer Price Index and four using the Consumer Expenditure Survey.
One of the questions we wanted to ask was whether an alternative measure — by including many billions in increased safety-net spending — gave a different view from the official count of how much poverty has risen since prerecession days.
That question cannot be answered with the measures in the Consumer Expenditure Survey because of a change in its methodology in 2007, contaminating comparisons with earlier years. Therefore, under guidance from the Census Bureau, we chose the Consumer Price Index measure that most closely approximates a new alternative the bureau will release on Monday — the Supplemental Poverty Measure.
Our analysis of that measure showed the number of poor people had risen by 4.6 million people since 2006 — not by 9.7 million people as the official Census count reported in September.
Shawn Fremstad of the Center for Economic and Policy Research notes that the Supplemental Poverty Measure, being released on Monday, uses the Consumer Expenditure Survey and therefore differs from the method we used. That is true. But the Consumer Expenditure Survey measures cannot be used for prerecession comparisons. We used the next best thing — a measure that, like the measure coming Monday, includes a fuller account of income and expenses and adjusts for differences in costs of living.
It’s worth noting that since the methodological change occurred, both sets of alternative measures show poverty rising more modestly than the official measure does. From 2007 to 2010, poverty rose 2.6 percentage points by official count; 0.8 points on average by the four Consumer Expenditure Survey measures, and 0.9 points by the four Consumer Price Index measures. That bolsters our finding that alternative measures show poverty rising less than the official numbers suggest. It’s also worth noting that our findings echo those by researchers in Wisconsin and New York City, who also found safety net programs doing more than the official numbers show to restrain poverty growth.
By official count, there are 46.2 million Americans in poverty. Many experts think the Supplemental Poverty Measure may produce a slightly higher count, as our article noted. That is a different question from whether safety net programs have done more than the official count shows in restraining its growth.
Article source: http://feeds.nytimes.com/click.phdo?i=20933ebfca79c7e2d5d4769d3277a8ec
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