Recalculating US Poverty - New Study Shows Higher Poverty Numbers

November 10, 2011

At Reset we know the value of better living through better information. That’s why when the U.S. Census Bureau released better, more comprehensive data about poverty in the United States, we knew that we had to spread the word.

This week the U.S. Census Bureau released a new Supplemental Poverty Measure that provides a fuller picture of who qualifies as being in economic need. The current poverty model does not factor in expenses such as out-of-pocket medical care, childcare or commuting, and it does not consider non-cash government aid when calculating income, such as food stamps or tax credits. The supplemental poverty measure includes things the government does to try to alleviate poverty such as the earned income tax credit, food stamps or housing vouchers.

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By providing a clearer perspective of poverty in the United States, the government can better allocate resources and funding to the states, families and individuals who need it. The number of Americans living in poverty has a direct impact on the amount of federal aid. These new figures could reallocate funding across federal programs and states based on the new findings. However, the new supplemental measure is currently only being used for research. The supplemental measure is another example of better government through better data.

New Poverty Measure Shows New Version of Poverty

According to the new supplemental poverty measure, 49.1 million Americans are living in poverty, compared to the 46.6 million in poverty using the traditional government measure. Specifically, the new measure counts 16 percent of the country as impoverished compared to 15.2 percent under the official measure.

Interestingly, these 49.1 million aren't the same people as  the 46.6 million — many of them are different people. Given the inclusion of medical costs, more seniors are living in poverty than under current measures. Conversely, because of federal aid programs, fewer children are living in poverty.

Using the Supplemental Poverty Measure, the poverty rate in 2010 for various groups was:

• Hispanics: 28.2 percent, higher than the official poverty rate of almost 27 percent.
• Whites: 11 percent (the official poverty rate was 10 percent).
• Asians: almost 17 percent, “versus the official poverty rate of 12.1″ percent.
• Blacks: 25.4 percent, 2.1 percentage points lower than the official poverty rate of 27.5 percent.
• Impoverished seniors increases from 9 percent to 15.9 percent.
• Fewer children are living in poverty -- childhood poverty drops to 18.2 percent from 22.5 percent.

We think this new supplemental poverty measure is an important step, but better data is just the first step. Now we need to make sure that we have better government response to grow our economy, improve our schools and help lift millions of Americans out of poverty.

 

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