More Americans are living on the edge of poverty, according to the Supplemental Poverty Report (SPM) from the Census Bureau. Some of those are homeowners with full time jobs and cars, yet they cannot be called secure. A big medical bill or unexpected home repair could tip them into insolvency.
The Census Bureau produced a report on Nov. 21 to detail the situation of people with incomes less than 50 percent above the official poverty level, at the request of The New York Times. About one-third of Americans are in that group, which paints a far clearer picture of economic distress than the official poverty rate.
The total number of people with incomes up to 150 percent of poverty was 51,365,000 according to the SPM. Many of the people were married, were homeowners, and many of the homeowners had paid off mortgages, a hefty 9,457,000. Many of them had private health insurance. A substantial number had full time jobs, 10,277,000 people, but a greater number of them did not work, 17,696,000.
The Census Bureau officially defines poverty as a family of four with an income of $22,314. That measure has been criticized as unrealistic and lacking detail.
For 2010, 15.1 percent of Americans or 46,180 million people were in poverty. Its current way of measuring poverty was developed in the 1960s and assumes the primary household expense is food. The poverty threshold was based on the cost of a minimal diet in 1963 multiplied by three. No other factors are considered.
The SPM is more nuanced. It considers different costs of living for different regions, such as housing and food costs and local tax burdens. It is meant to complement the existing poverty report and will be compiled each year. The primary reason to create the SPM report is to measure the effect federal actions have on the financial well being of Americans, from payroll taxes that reduce income to Social Security, which is meant to keep people out of poverty, according to the census.
The census researched other measures of economic distress after the National Academy of Sciences (NAS) said the standard poverty measure does not reflect modern life and does not give an accurate measure of national poverty rates.
NAS recommended that poverty measures consider regional or age group variations in health care costs, expenses such as child support payments, and expenses needed to hold a job, such as “transportation costs for getting to work and the increasing costs of child care for working families resulting from increased labor force participation of mothers.” In a 1995 study, NAS asked the census to measure poverty and near-poverty in a more complex way.
According to Arloc Sherman, senior researcher at the Center on Budget and Policy Priorities, the takeaway of the SPM should be “Six temporary federal initiatives enacted in 2009 and 2010 to bolster the economy by lifting consumers’ incomes and purchases kept nearly 7 million Americans out of poverty in 2010, under an alternative measure of poverty that takes into account the impact of government benefit programs and taxes.” He was analyzing the SPM for the center. He wrote that a food stamp expansion, tax credits, and expanded unemployment insurance Congress authorized “kept nearly 7 million Americans out of poverty in 2010, under an alternative measure of poverty that takes into account the impact of government benefit programs and taxes.” The center is a nonpartisan fiscal policy research institute.
