December 8, 2011

The Poverty Threshold: An Alternative Measure

$24,343

The Census Bureau has developed an alternative measure of poverty that takes into account a wider range of factors than the official poverty measure. The alternative measure sets the poverty threshold for 2010 at $24,343, which is $2,230 higher than the official measure for a two-adult two-child family.

For more than a decade, the Census Bureau has been developing an alternative measure of poverty that is intended to better reflect the costs of basic living expenses as well as the resources people have to pay them. The result is the Supplemental Poverty Measure, which includes additional data such as medical expenses, tax credits, non-cash government benefits (food stamps, housing subsidies and school lunch programs) and cost-of-living adjustments for different geographic areas.

The new methodology resulted in a higher poverty threshold. For example, the official measure set the 2010 poverty line for a two-adult, two-child family at $22,113 while the supplemental measure sets it at $24,343.

While the size of the overall poverty population differs only modestly between the official and supplementary counts, demographic differences emerge regarding the number of people in each population group who fall above or below the poverty line. Under the alternative measure, 3.2 million fewer children under age 18 are counted as poor. Renters, blacks and those covered by only government-provided health insurance also experienced a decline.

On the other hand, the new poverty rates increased substantially among the elderly. The new measure also shows a significant increase in poverty among Asians and, to a lesser extent, among Hispanics — two groups with relatively large proportions of recent immigrants who may not qualify for in-kind benefits.

The alternative measure is not intended to replace the official poverty measure, and for the foreseeable future, the Census Bureau will report two sets of numbers. Read More