Tuesday, October 28, 2014

The 2013 Supplemental Poverty Measure

The Census Bureau recently released the 2013 poverty rate based on an alternative measure of poverty, the Supplemental Poverty Measure (SPM). In 2013, the supplemental poverty measure found that 15.5 percent of people are living in poverty, compared to 16 percent in 2012. Children were found to have a supplemental poverty rate of 16.4 percent compared with 20.4 percent using the official measure. The SPM found that adults over 65 have a poverty rate of 14.6 percent compared with 9.6 percent using the official measure.

The SPM differs from the current poverty measure because it takes into account the impact of non-cash benefits, necessary expenditures for families and geographic location. Though the official U.S. poverty measure is updated annually to adjust for inflation, it provides an absolute definition of poverty, with families either defined as living in poverty or above it. Alternatively, the SPM provides a detailed look into the lives of families living in- or near - poverty and provides information on the effectiveness of safety-net programs.

The SPM takes into account factors including:
  • unrelated people (like foster children and unmarried partners);
  • information on what people spend today for basic needs, such as food, clothing, shelter, and utilities;
  • housing costs, including related factors such as geographic location, if a family pays a mortgage, rents or owns their home; and 
  • non-cash benefits from the government that help families meet their basic needs, while subtracting expenses, such as health care, taxes, commuting costs, etc. 

The SPM also provides important information demonstrating the success of government benefits in keeping millions of families out of poverty. By including taxes, benefits, and other necessary expenses, the SPM provides information on what resources people need to make ends meet and measures the resources that are currently in place.

The findings from the SPM show how Social Security, refundable tax credits, and the Supplemental Nutrition Assistance Program (SNAP) are three programs that have a strong impact on the lives of low-income people. Without Social Security, the supplemental poverty rate would be 24.1 percent compared to the current rate of 15.5 percent – a significant 8.6 percent higher. Refundable tax credits also demonstrate a significant benefit to children, reducing the supplemental rate of poverty by 3 percent across all age groups and doubles for children with a reduction of 6.4 percent. These numbers are clear - government programs alleviate poverty and can improve the quality of life for low-income families and children.

For more information on the Supplemental Poverty Measure, read the full report here.

To read our blog post on the 2013 Census Poverty Data, click here.

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