New Poverty Measure Shows Government’s Anti-Poverty Impact
Posted by: Indivar Dutta-Gupta
Posted in: Federal Budget, Federal Tax, Food Assistance, Food Stamps, Individuals and Families, Poverty and Income, Recession and Recovery, Taxes and the Economy, Trends, Unemployment, Welfare Reform / TANF
The Census Bureau’s release of the Supplemental Poverty Measure (SPM) makes clear, in a way that the traditional poverty measure cannot, that federal and state programs significantly reduce the extent and depth of poverty.
The official measure counts only cash income and does not include in-kind benefits or tax credits, whereas the SPM captures a much broader array of safety net programs. The SPM shows that on an ongoing basis, but especially in response to this recession, the Earned Income Tax Credit kept approximately six million above the poverty line in 2010, and the Supplemental Nutrition Assistance Program (formerly food stamps) kept more than four million above the poverty line. This provides proof that these programs help protect American families from poverty caused by low pay, job loss, disability, old age, and other vulnerabilities and misfortune that President Franklin Roosevelt called the “vicissitudes of life.” Such findings come when many benefits are under attack, and they serve as a powerful antidote to the myth that this assistance can be cut without significant harm. Policymakers should take heed and extend or protect these polices.
By adopting a more meaningful poverty threshold and a more complete understanding of family resources available for meeting basic needs like food, clothing, shelter, and medical care, the SPM also reveals the burden of out-of-pocket healthcare costs (which pushed approximately ten million people below the poverty line) and child care and other necessary work expenses in 2010 (which pushed nearly five million below the poverty line) — factors not considered in the traditional measure of poverty.