The Census Bureau on Monday revealed a more exact percentage of poverty in America. The new measure indicates more poverty among the elderly, but less among children and African-Americans.
It also shows a slightly nation poverty rate increase since last year — 16 percent compared with 15.2 percent under the official measure — but lower rates among groups who benefit from noncash government programs the official count leaves out, including food stamps and the earned-income tax credit. The research also showed that another 3m people are living below the poverty line, one in six people.
Official numbers, reported by bureau in September, indicates the proportion of people living in poverty climbing to 15.1 percent last year from 14.3 percent in 2009, the highest level since 1993. The 15.1 percent figure didn’t include unrelated individuals under the age of 15 living in a household.
The ranks of people in poverty, about one in seven Americans, are the highest in the 52 years since the bureau began gathering that statistic.
In fact, the Census Bureau has come up with a new idea of counting the poor. Since the 1960s, poverty has been measured by looking at the number of people living below a set of thresholds, which were roughly equal to living on half of median incomes when they were invented. When the business cycle was good, poverty went down, when it was bad, poverty went up.
The new model, called the supplementary poverty measure, takes into account taxes, medical out-of-pocket payments, commuting costs and also capture how government safety-net programs may serve to offset them.
“It is important to have a measure that can accurately tell us what’s going on and — especially in tough times — it is critical that we know what programs really help lift individuals and families out of poverty,” New York Mayor Michael Bloomberg said. “The new measure brings us one step closer to giving us the tools we need to fight this ongoing challenge.”
Moreover, in Palm Beach County, where the poverty rate stopped at 14.2 percent in 2010, community leaders say the new measure not only confirms that poverty is on the rise, but also credits social service programs for providing relief to the neediest families.
“I think that by their including these factors in the calculation, it certainly has made a difference in the numbers and I think it tells a truer story,” said Tana Ebbole, chief executive officer of the Children’s Services Council of Palm Beach County Inc.
“If you take into account medical expenses, child care expenses, commuting expenses and housing expenses, that really creates a different calculation of poverty and not poverty,” she said.
The new formula also showed poverty rates had increased for whites, Asians and working-age adults but fallen for blacks and children.
For the first time, the poverty rate for Hispanics (28.2 percent) exceeded the rate among blacks (25.4 percent), as a result of less participation in social programs, like housing subsidies, among immigrant groups.
Census officials said that the poverty rate would have risen to 18 percent (due to the benefits of government assistance) if not for earned income tax credit for people with low to moderate incomes.
The broader measure was developed in cooperation with the U.S. Bureau of Labor Statistics and the National Academy of Sciences, Census officials said. [Via Los Angeles Times, Business Week and Palm Beach Post]