The Supplemental Poverty Measure: A (Small) Step in the Right Direction

This blog post appeared in The Huffington Post on Wednesday, November 30, 2011. You can access the original article here.

The Census Bureau recently released the supplemental poverty measure (SPM). By this gauge, 49.1 million Americans, or 16 percent of the population, live in poverty — more than the official poverty number of 46.2 million, or 15.1 percent of the population, reported in September.

The SPM takes a broader, far more illuminating view of poverty than the traditional poverty measure does. But at the end of the day, it remains an indicator of income poverty only. A broader definition of poverty is still needed — one that goes beyond measures of income alone.

Still in the research phase, the SPM does not replace the Census Bureau’s official poverty formula, which determines eligibility for billions of dollars in federal programs for the poor — a hot topic in the conversation about how to cut trillions from the federal debt in coming years. Interestingly, the official poverty measure, first adopted in 1969 and based on the price of food, was originally intended as a placeholder until a more sophisticated measure was created.

The SPM is a big improvement in that it reflects the realities of life in the United States today — as opposed to 40 years ago. Among other changes, it accounts for the costs of working, including big-ticket items like childcare. It includes benefits received from government programs intended to reduce poverty, such as food stamps, energy assistance, the Earned Income Tax Credit and excludes taxes and other unavoidable expenses, such as out-of-pocket medical costs.

The SPM provides a useful barometer of how some federal programs help reduce poverty and how some common classes of expenses exacerbate it. For example, the Earned Income Tax Credit lowered poverty by two percentage points according to the SPM, whereas deducting out-of-pocket medical expenses from family income pushed the poverty rate up 3.4 points.

While many people consider basic physical necessities (such as food and shelter) of a higher order when addressing poverty, those who experience poverty are as likely to speak about the powerlessness they feel to change their situation as they are about lack of money or material things. In short, poverty is about more than not having money. It’s about lacking the basic capabilities and opportunities a person needs to fulfill his or her potential and to sustain a freely chosen life of value. These capabilities include decent material living standards, but they also include a good education, political voice and influence, neighborhood safety, a healthy living environment, and autonomy and self-respect.

To better understand the distribution of capabilities and opportunity in America, the American Human Development Index breaks with the singular focus on income alone and considers critical indicators of well-being in the areas of health and education, in addition to material standards of living. The Index is calculated for states, congressional districts, and major metropolitan areas and broken out by gender, race and ethnicity. Tracking the American Human Development Index, in addition to SPM, over time enables us to know whether we’re also taking steps forward on the other things, beyond income, that expand people’s choices and opportunities.