Friday, May 07, 2010

The US supplemental poverty line

The U.S. government is about to make a big step in updating the country's poverty figures. The official poverty measurement has been outdated for a long time, but it will not be replaced just yet. The Obama Administration is going to have the government begin measuring poverty by a new method that will supplement the outdated one.

From the Columbus Dispatch, writer Rita Price explains the differences between the two methods.

The supplemental measure won't replace the official one, which still will be used to determine state funding and program eligibility. But supporters hail the new measure as an important step away from an antiquated formula that ignores far more information than it considers.

"We don't live in Mayberry anymore," said Lisa Hamler-Fugitt, executive director of the Ohio Association of Second Harvest Foodbanks. "It's about time that Congress and the government put their noses to the grindstone to see what poverty looks like, and to see what it takes to lift more Americans into the middle class."

The current poverty measure is based on a low-cost food budget from the 1960s that assumes that a family spent about one-third of its income on meals. For nearly a half-century, the formula has been adjusted for inflation but nothing else.

That means family income is calculated without counting the value of now-widespread benefits such as food stamps, housing assistance and the Earned Income Tax Credit.

On the flip side, significant expenses such as child care, housing and out-of-pocket medical costs also aren't considered.

The new measure aims to take it all into consideration.

"People can argue around the edges, but I've never found anyone who thinks the old one is better," said Robert Michael, a professor at the Harris School of Public Policy at the University of Chicago.

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