New Census Measure Shifts the Face of Poverty
Census Bureau's new poverty threshold shows safety net's impact
Federal social programs are keeping nearly 2 million American children out of poverty, according to the U.S. Census Bureau's first new poverty-calculation measure in more than four decades.
The new poverty measure, released on Nov. 6, is intended to supplement the federal government's official count, which is used by the education field for everything from achievement research to setting eligibility criteria for programs such as Title I school grants for disadvantaged students.
The new measure will not affect eligibility or grant allocations for those programs, Census research economist Kathleen Short said at a briefing on the release at the Washington-based Brookings Institution, but it does give a much more comprehensive picture of who is poor in America and how they are affected by housing, child care, and other daily costs.
"It's a more credible measure," said Ron Haskins, a co-director of the Center on Children and Families at Brookings and a longtime poverty researcher. "There will be tons of applications [for the measure] in thinking about programs and poverty."
Using the supplemental poverty measure or the official count, child poverty is still on the rise. In 2010, 16.8 million children ages 18 and under were living in poverty, or about 22.5 percent, while according to the supplemental measure, the poverty rate was 18.2 percent, or 13.6 million under age 18.
By the supplemental yardstick, from 2009 to 2010, the number of poor children under age 18 increased by 0.9 percent, or 671,000. That's faster than the overall rise in poverty from 2009 to 2010, which was 2.6 million, or 0.8 percent, but far less than the increase in child poverty measured by the official poverty rate.
While the poverty rate among those 18 and younger was lower under the supplemental measure, it was higher for every other age group. Children under 18 made up 36.1 percent of all those in poverty in 2010 by the official count, while under the supplemental measure, they made up 27.7 percent of all those in poverty.
"The one very important message from the data is, although the number of children deemed to be living in poverty is reduced [compared to the official rate], it really is because the safety net programs are doing the job they were intended to do," said Sheila Smith, the director of early childhood programs for the New York City-based National Center for Children in Poverty.
"We have children moving out of poverty under this new measure because this new measure is taking into account families' receipt of safety-net resources. What you have to conclude is these resources are helping reduce poverty," she said.
More Nuanced Picture
By the official Census poverty threshold in 2010, a family of two adults and two children would be considered in poverty if they were living on $22,113 per year. The supplemental measure raised the threshold to $25,018 for a family in a home with a mortgage and to $24,391 for renters, and lowered it to $20,391 for a family with no mortgage.
The official poverty measure, which has been mostly unchanged since 1969, considers a family of three or more in poverty if its annual income is less than three times the cost of a "minimum food diet" originally calculated in the 1950s and updated using the Consumer Price Index. Grocery costs are compared to the family's gross income and the cash benefits it receives from government, such as Social Security, unemployment insurance, and Temporary Assistance to Needy Families. The official poverty count includes no adjustment, however, for regional differences in the cost of living; a family in Los Angeles is expected to live on the same amount as one in rural Louisiana.
The Census Bureau never intended to base the spending calculation of the official poverty count solely on food expenses, and it has been working on the supplemental measure since the mid-1990s, relying in part on recommendations by an interagency working group and the National Academies of Science, a congressionally chartered organization that advises policymakers and the public on scientific matters.
Ms. Short said that the supplemental measure is "experimental ... intended to address some of the criticisms of the official count."
The more nuanced supplemental measure considers a family to be poor based on its spending on basic necessities of food, clothing, shelter, and utilities, while also taking into account other needed expenses, such as child-care costs and medical bills—both of which can have much larger effects on a family's budget than groceries.
It also accounts for:
• Regional differences in the cost of living, based on data updated every five years;
• Alternative types of family structure, such as single-parent households and cohabiting parents with children;
• Whether a family rents or owns its home with or without a mortgage; and
• Income after required expenses, such as federal and state income taxes, child-support payments, out-of-pocket medical costs, and work transportation costs.
On the income side, the new measure also includes in-kind benefits that the official count does not cover, such as discounts and vouchers from food programs like the national free and reduced-price school breakfast and lunch program and supplemental nutrition for Women, Infants, and Children, or WIC, as well as housing subsidies and home-heating assistance programs.
The more detailed calculations yield a shift in the portrait of poverty in the country. Because older Americans have higher medical costs, and children are more likely to receive support from social programs, the new figures show greater numbers of senior citizens living in poverty and fewer children than do the official poverty counts.
The Census Bureau found that using the supplemental poverty measure in 2010, poverty rates rose for a wide variety of groups, including families headed by married couples, whites, Asians, immigrants, and homeowners with mortgages. The supplemental measure also showed rising poverty in the suburbs.
Helpful for Districts?
It also showed that social support programs kept some families—particularly those with children—out of poverty, and improved the lot of those in the deepest poverty as well.
For example, the new measure subtracts the cost of unsubsidized child care from parents' income, as a required work expense. With the annual cost of unsubsidized care running from $3,500 to more than $7,000 per child, Smith said, "We can assume if we didn't have public funding going into these programs, parents would have to pay the lion's share of those programs."
With education researchers still digging into the effects of concentrated poverty on the achievement gap, and policymakers taking a closer look at how well programs like Title I focus on the students who need them most, the new Census measure is likely to be a gold mine of information.
"If this new data can actually become part of giving a truer picture of where poverty is in school districts, it could be very helpful," said Rick Carder, president of the National Association of Federal Program Administrators, which represents school district Title I and other program staff. For example, having a better sense of the make-up of their communities and the support available from other federal programs might help district administrators figure out whether to use federal funds to target only students in poverty or for schoolwide improvement.
If the supplemental measure ever gets built into the funding formula for Title I or other programs, Mr. Haskins warned, "there would be huge effects on education."
"Now a new dynamic has been set up," he said. "States that would get more money are going to start lobbying to use this new measure and the states that would lose money will be against it."
Vol. 31, Issue 12, Page 10Published in Print: November 16, 2011, as New Measure Yields a Subtler Portrait of Child Poverty