Is Poverty Worse Than We Realize?

Nov 15 2012 @ 11:20am

Spm programs

Dylan Matthews analyzes what the "supplemental poverty measure" – a new Census bureau metric (pdf) that, unlike the "official" poverty rate, accounts for welfare programs – reveals about how poverty affects different demographic groups:

Overall, [the SPM is] higher than the official measure, at 16.1 percent, but for some groups, such as children under 18 and blacks, it’s actually lower. By contrast , it’s much higher for the elderly (15.1 percent in the supplemental measure, 8.7 percent in the official one) and Asian-Americans (16.9 percent supplemental, 12.3 percent official), and slightly higher for those 18-64, Hispanics, and non-Hispanic whites.

Matthews digs into which government programs have the biggest impact:

Medical expenses are the main expense contributor to poverty, followed by expenses related to work (such as transportation, supplies, etc.), while Social Security is far and away the most important program for reducing poverty….

[T]he Social Security number is especially notable given how much higher the supplemental measure is than the official one for the elderly. It suggests that even with that substantial safety net, the poverty problem among the elderly is much bigger than we thought.

Arloc Sherman, meanwhile, emphasizes the looming sequestration factor:

These figures are particularly timely given the looming expiration of two key measures that account for part of these programs’ large antipoverty impact:  federal emergency unemployment insurance and the 2009 Recovery Act’s improvements in refundable tax credits like the EITC. Letting these measures expire at year’s end could push large numbers of families into poverty.