Exclusive Commentary

The New Supplemental Poverty Measure: Two Views

Indivar Dutta-Gupta, Center on Budget and Policy Priorities and Peter Mitchell, The Clapham Group - Posted November 8, 2011


Yesterday, the Census Bureau released the Supplemental Poverty Measure (SPM), an experimental measure of poverty designed to account for perceived flaws in the official poverty measure.  As the Bureau releases their preliminary findings, Spotlight has gathered reflections from two experts on each side of the aisle to address the question: how do the recent Census findings in the SPM affect our understanding of and response to poverty?


Indivar Dutta-Gupta

Policy Advisor, Center on Budget and Policy Priorities

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.

 

Peter Mitchell

Associate, The Clapham Group

In the short time since it has been released, much has already been written on the Supplemental Poverty Measure (SPM) and its commendable efforts to gain better and fuller data on poverty. Yet even the best statistics are only a veiled reflection of reality and we must guard ourselves against the temptation of valuing what we can measure instead of trying to measure what we value—normally a much harder task.

So the discussion of the SPM must not consist purely of technical and statistical soliloquies, but of a wider discussion on whether the SPM attempts to measure those things we value. This is vital because how we measure poverty shapes our perception of it and most importantly how we seek to solve it.

If we measure poverty as almost exclusively material, our solutions will also likely be exclusively material and we will measure our compassion by the size of our checks - whether public or private - rather than the well-being of the recipients. We will be missing the fact that many times poverty is not just a lack of financial capital, but a lack of human capital and, just as importantly, social capital.

For example, while the new data shows the Earned Income Tax Credit might lower the SPM by about two percent, the data also shows marriage can lower the SPM by as much as 20 percent when compared to a single female household. So a measure of how many families remain married and intact is as important to poverty as their cost of clothing or housing.

If we don’t widen our definition of poverty, we may come to say of the SPM those fateful words Bobby Kennedy uttered about Gross National Product: “it measures everything in short, except that which makes life worthwhile.

 

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