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Economix Blog: United States of Hunger

November 18, 2011 by Leave a Comment

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

Casey Mulligan noted Wednesday on Economix that United States spending on food stamps had skyrocketed since the recession began. A new Census Bureau report provides a look at just how big the program has become. Last year, more than one in 10 families received food stamps, with some states having significantly higher participation rates. In Oregon, the share was nearly one in five.

Here’s a map showing what share of families in each state received these benefits to help them buy food:

DESCRIPTIONCensus Bureau

In Oregon, 17.8 percent of families received food stamps, officially known as Supplemental Nutrition Assistance Program (SNAP) benefits, the highest rate in the nation. Oregon was followed by Tennessee (17 percent) and Michigan (16.9 percent).

The state with the lowest SNAP participation rate was Wyoming, with a rate of 6.2 percent. The next-lowest rates were in New Jersey (6.8 percent) and California (7.4 percent).

I must admit I’m a bit puzzled by some of these numbers. I would have expected California’s food stamp take-up rate, for example, to be much higher, since its unemployment rate is 11.9 percent, the state is broke, and so many cities there suffered from housing busts.

I did a quick scatterplot showing the relationship between median household income and food stamp take-up rates, and the relationship is relatively weak:

DESCRIPTIONSource: Census Bureau

The relationship between unemployment rates and food stamp take-up rates was even weaker:

DESCRIPTIONSource: Census Bureau, Bureau of Labor Statistics

Of course, there are a lot of variables not at all reflected by unemployment and median income figures, such as inequality and state safety net programs.

Article source: http://feeds.nytimes.com/click.phdo?i=0f457b6a203f449f1ffdcba00b8ef16f

Filed Under: Economy News Tagged With: , ,

Economix Blog: More on Calculating Poverty

November 5, 2011 by Leave a Comment

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

Filed Under: Economy News Tagged With: , ,

Economix Blog: Calculating Poverty

November 4, 2011 by Leave a Comment

To preview how the Census Bureau’s new Supplemental Poverty Measure may change the portrait of poverty, The New York Times consulted multiple alternate measures that researchers have quietly published in recent years.

They included a 2009 version of the Supplemental Poverty Measure, as well as four of eight alternate measures the Census has published, incorporating recommendations from the National Academy of Sciences.

They also included studies from the University of Wisconsin and from officials in New York City, along with three state analyses by Sheila Zedlewski and colleagues at the Urban Institute.

While there are differences in the calculations, all go beyond the official measure by counting benefits like food stamps, work expenses, taxes, and the cost of living.

In addition, The Times did an in-depth analysis of one experimental data set (known as MSI-GA-CPI). It is the Census measure that comes closest to the new Supplemental Measure, while also providing a methodologically consistent look back at prerecession years.

That produced a number of interesting figures that our article length could not accommodate.

Among children, it showed poverty rates falling to 15 percent, from 22 percent, in the official count. That removes about 5.2 million children from poverty. That drop is broadly consistent with what the Urban Institute researchers found in Massachusetts, Illinois and Georgia — an average decline in child poverty of about 24 percent.

It also falls sharply for women ages 25 to 39 — many of them mothers. Many safety net programs, particularly the Earned Income Tax Credit, focus on families with children.

Among elderly, The Times’s examination of the Census data showed poverty rates rising to 13.8 percent, from 9 percent, by the official count. The 2009 Supplemental Poverty Measure and the Urban Institute studies found broadly similar climbs.

Some experts found this possibly portentous — a complication in the generally accepted story that poverty among the elderly has been on a long-term decline. Irwin Garfinkel of Columbia University said his own studies of alternate poverty measures showed that the figure had been climbing for a decade. “We’ve been slipping backwards and we didn’t know that before,’’ he said.

But others, including Bruce Meyer of the University of Chicago, cautioned that it could be a statistical anomaly. Many elderly people use retirement savings but do not report that money as income. And measures of consumption among the elderly, these experts say, have not shown a rising level of hardship.

In The Times analysis, poverty rates in rural America drop sharply, to 10.9 percent from 16.4 percent in the official count, most likely reflecting the lower cost of living. But they rise in metropolitan areas, to 14.9 percent from 13.9 percent. While poverty rises in the Northeast and West, it falls in the South and Midwest, by a total of about six million people.

The Times study found poverty dropping sharply among blacks, falling by 6.7 percentage points to 20.6 percent. Most other studies have also showed significant declines among blacks, which could reflect either that they receive relatively more benefits or live in relatively low-cost locations.

The Times study found poverty growing among Asians, as did all the others. It found poverty declining among Latinos, though by a much smaller amount than it declined among blacks. Some other studies have found Latino poverty rates rising. One possibility is that Asian and Latino immigrants have a harder time getting access to benefits. Another is that differences between the official and alternate studies reflect where people happen to live, perhaps disproportionately in high-cost areas.

What elements of the new measure lift people from poverty? The Times examined the characteristics of those Americans considered poor by the official count, but not poor by the alternate. About 70 percent lived in households that received food stamps a year. A third lived in households with housing subsidies and 19 percent lived in households that received the earned income tax credit.

A caveat: this data is not the same as what the Census Bureau will release on Monday, which among other things uses a different cost-of-living adjustment. But while the numbers may vary, the general trends are likely to remain the same.

Article source: http://feeds.nytimes.com/click.phdo?i=8f73bf251a66b2bacb00142635a044af

Filed Under: Economy News Tagged With: , ,