Addendum to Previous Report on Overall Poverty Data from the Bureau of the Census

By Carolyn Burstein
October 30, 2014

The Bureau of the Census released its data on poverty in the U.S. using the Supplemental Poverty Measure (SPM) on October 16, 2014. This addendum is intended to supplement the blog written on overall poverty data using the official measure of poverty published in mid-September.

The supplemental poverty measure is an effort to take into account many of the government programs designed to assist low-income families and individuals that were not included in the official poverty measure, such as the Supplemental Nutrition Assistance Program (SNAP, also known as food stamps), school lunches, housing assistance and refundable tax credits.

In addition, the supplemental poverty measure deducts necessary expenses, such as taxes (especially important for many low-income workers are payroll taxes), child care and transportation costs, out-of-pocket medical expenses, and child support expenses.

Given these changes, the nation’s poverty rate using the SPM is 15.5% compared to the official poverty rate of 14.5%. However, both rates were below the rates for 2012, and that is encouraging. Using the SPM, 48.7 million people were below the poverty line in 2013 compared to 45.3 million using the official poverty rate.

The safety-net programs are especially beneficial for children of low-income families; their poverty rate using the SPM is 16.4% compared to a poverty rate of 20.4% using the official data.

However, adults older than 65 fared more poorly – a 14.6% poverty rate using the SPM compared to 9.5% using the official measure. The reason for a higher poverty rate for the elderly using the SPM is that medical out-of-pocket expenses are a significant element for this group, while the official poverty measure is based solely on cash income. It should be noted that, despite the improvement granted children by using the SPM, their poverty rates, nevertheless, are still higher than those of the elderly, as well as the poverty rates of 18-64 year-olds.

The supplemental poverty measure has been estimated since 2010 and is intended to provide an improved understanding of the economic wellbeing of U.S. families and individuals and the way that federal policies affect those living in poverty.

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