Number of American poor higher than previously thought

The U.S. Census Bureau’s alternative Supplemental Poverty Measure — “a new measure of poverty to complement the official measure,” released this week — shows that 49.1 million Americans were poor in 2010, “more than the 46.6 million using the official definition of poverty.”

According to the Census Bureau, the Supplemental measure ”is intended to better reflect contemporary social and economic realities and government policy effects and thus provide a further understanding of economic conditions and trends.” The official poverty measure estimates poverty rates by looking at a family’s or an individual’s cash income.

A Pew Hispanic Center report released Tuesday indicates that, “compared with the official measure, SPM figures released by the Census Bureau show a higher national poverty rate for 2010, 16 percent, compared with the official poverty rate of 15.2 percent.”

A Census Bureau report (PDF) shows that the official poverty measures in use since the 1960s:

  • [do] not reflect the effects of key government policies that alter the disposable income available to families and, hence, their poverty status
  • do not adjust for rising levels and standards of living that have occurred since 1965
  • [do] not take into account variation in expenses that are necessary to hold a job and to earn income — expenses that reduce disposable income like transportation costs for getting to work, the increasing costs of child care for working families resulting from increased labor force participation of mothers
  • [do] not take into account variation in medical costs across population groups depending on differences in health status and insurance coverage and does not account for rising health care costs as a share of family budgets
  • use family size adjustments that do not take into account important changes in family situations, including payments made for child support and increasing cohabitation among unmarried couples
  • do not adjust for geographic differences in prices across the nation, although there are significant variations in prices across geographic areas

According to the Hispanic Center, the alternative measure includes “medical expenses, tax credits, non-cash government benefits (such as food stamps, housing subsidies and school lunch programs) and cost-of-living adjustments for different geographic areas.”

The Pew Hispanic report adds that, “among the nation’s largest racial and ethnic groups, poverty rates using the alternative measure are higher than official poverty rates for Hispanics, non-Hispanic whites and Asians, but are lower for blacks.”

According to the report issued by the Pew Hispanic Center, 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, higher than the official poverty rate of 10 percent
  • Asians: almost 17 precent, higher than the official poverty rate of 12.1 percent
  • Blacks: 25.4 percent, lower than the official poverty rate of 27.5 percent