States and cities measuring poverty differently

The US will soon be measuring poverty numbers differently. The old method only used food expenditures, if a family spent a large amount of their income on food they were considered poor. The new poverty measurement will take into account much more including what a family spends in housing and child care. This new method will also account for how much public assistance a family receives to balance things out.

The worry about using the new poverty measurement is that it could greatly expand the number of people now considered poor. Some states and cities have already used this formula, with some surprising results

From State Line, writer Christine Vestal talks about the results when local areas changed the way they measured the poor.

In New York City, for example, where an NAS-type poverty measure was adopted three years ago, Mayor Michael Bloomberg said the new data would allow the city to pinpoint who needs assistance most and which of the city’s social services have been most effective at improving its residents’ standard of living.

Using an updated measurement, New York City found that children — the recipients of a broad range of social welfare programs — were less poor than originally thought, while elders, who were struggling with previously unaccounted for medical expenses, were poorer.

As states become increasingly challenged by shrinking revenues and rising numbers of people in need, more than a dozen have set up commissions to help low-income families and many have set poverty reduction goals.

Among them, Minnesota and Connecticut have used NAS-like formulas to assess the effectiveness of current and proposed anti-poverty measures.

With technical assistance from the public policy research group The Urban Institute, both states used the results to support aggressive anti-poverty campaigns. Minnesota has a Legislative Commission to End Poverty in Minnesota by 2020, and Connecticut created a Child Poverty and Prevention Council with the goal of cutting child poverty in half by 2014.

Connecticut found only a slight increase in the number of people living in poverty when using the updated calculation — 21,000 people in 2006, compared to 20,000 using the existing Census measure.

But it got very different results when determining which public assistance programs did the most to reduce poverty. Under previous assumptions, child care subsidies and adult education and job training were seen as the most highly effective at moving people out of poverty over time. But the new formula showed that increasing enrollment in programs such as food stamps, energy assistance and subsidized housing was a more effective way to reduce child poverty in the near term. As a result, the state redoubled its outreach efforts to sign up as many low-income families as possible for these federally-funded programs.

In Minnesota, where the results were similar, a bipartisan legislative committee recommended the state refine its definition of poverty, build public awareness, and carefully monitor the impact of all major legislation on existing anti-poverty programs.