Poverty May Be Worse Than In 'Official' Count

The number of Americans living in poverty totaled 46.2 million in 2010 — or 49.1 million. Both figures come from the federal government. So which number is accurate and why the discrepancy?

The “official” poverty rate from the U.S. Census Bureau came out last month and showed 46.2 million people were poor, or 15.1 percent, the largest number in the 52 years the bureau has been estimating poverty rates. But a new “supplemental poverty measure” that Census and the U.S. Bureau of Labor Statistics released yesterday showed a higher figure of 49.1 million, or 16 percent. 

As Stateline reported last year, there have been concerns for decades that the way the federal government comes up with the poverty level, using a process unchanged since 1963, is outdated because it counts only cash income. Advocates for the poor have argued that poverty counts would be much higher if the cost of housing, child care and other expenses, which are currently excluded, were factored in.

Conservatives, on the other hand, have long argued that if safety-net programs such as food stamps, housing vouchers and child-care subsidies were taken into account, which they currently aren’t, the poverty rate would be much lower. 

The new supplemental poverty measure, based on recommendations from the National Academy of Sciences, suggests that in some ways, both objections are valid. 

The official count relies heavily on the cost of the minimum food diet in 1963 and multiplies that number by three, because in 1963 people spent about one-third of their incomes on food. Today, it’s more like one-seventh, experts from Census said during a briefing at the Brookings Institution, in Washington, D.C., where the new numbers were released. 

The new supplemental poverty measure finds more poor in the Northeast and West, largely because this formula takes into account regional differences in prices and housing, and prices tend to be higher in those areas, explains Kathleen Short, a research economist at the Census Bureau and author of the new report. 

The new figures also show more elderly people and fewer children in poverty compared to the count released in September. Including benefits such as food stamps and the Earned Income Tax Credit lowers the poverty rate of children under 18 years to 18.2 percent, less than the 22.5 percent rate under the official count.

Factoring in out-of-pocket medical expenses helped to produce a higher poverty rate for those over 65 years of age, bumping up the rate to 15.9 percent, much higher than the official count of 9 percent for this group. 

Government officials make clear that the new measure “complements but does not replace” the nation’s official poverty figures released in September. The lower official numbers are still the ones that states and the federal government will use when figuring out how poor someone has to be to qualify for programs to help the needy.

This article originally appeared on Stateline.org, a nonpartisan, nonprofit news service of the Pew Center on the States that reports and analyzes trends in state policy.  It is reprinted here with permission.

Pamela M. Prah writes on social policy for Stateline.org. She is a veteran Washington reporter and is an adjunct journalism professor at American University.