Wednesday, March 3, 2010

New Supplemental Measure of Poverty Coming Next Year

Late next year, we will get our first opportunity to view the results from a new threshold to measure poverty.  This new measure, based on a standard set by The National Academy of Science, will only be used for research purposes - it will not be used to change eligibility guidelines for programs.  However, it will offer a new opportunity to determine the effects of various policy programs.

The NAS measure will take into account items such as:
  • Tax costs
  • Tax credits
  • Public benefits
  • Geographic differences in the cost of living
Why is the new measure so important?  As we have discussed before, the current Federal Poverty Level (FPL) is not the same as a measurement of all people who are struggling in the United States (in brief, it is outdated, assumes that families face the same cost of living regardless of where they live in the 48 contiguous states, and is based on a measure of temporary needs). In general, the FPL underestimates the number of those earning less than what they need, which in turn undermines the ability to locate and serve families in crisis.  For instance, in Pennsylvania in 2007, about 9% of households fell below the FPL, but 21% of households actually earned less than what they need at a minimum to support their families.  The Annie E. Casey Foundation noted last year that "perhaps the single most glaring shortfall comes in our efforts to measure poverty, ‘the key performance indicator’ that rises above all others in its impact on children's futures."

Neither the FPL nor the new NAS measurement will measure the needs of families in as much detail as The Self Sufficiency Standard, which examines the cost of food, transportation, healthcare, childcare, and housing in every county in a given state for 70 different family configurations.  However, the new measure will offer a new perspective that can hopefully lead to more targeted programs for all Americans.

image courtesy of http://commons.wikimedia.org/wiki/File:US_states_by_poverty_rate.svg

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