Measuring poverty

It seems like it should be so simple to know how many and what types of people live in poverty, but in reality it isn’t. As highlighted in the Why section of this blog, the official method for measuring poverty in the U.S. was developed decades ago and has several serious limitations. This is more than just a technical issue; it has important policy implications. After all, in order to know how to best attack poverty, we first need to understand exactly who is poor.

A recent commentary on Spotlight on Poverty and Opportunity (which, by the way, is a great resource for a wide range of resources and opinions on addressing poverty) by Rebecca Blank and Robert Kerr called “Poor Measurement” succinctly summarizes some of the limitations and current efforts to improve how we measure poverty. (A longer explanation of their argument is in “Improving the Measurement of Poverty,” a Brookings publication). As the authors point out, the official methodology in the U.S. does not adequately account for how employment and households have changed since the 1960s when it was first developed, nor does it account for regional differences in the cost of living (i.e. the income needed to be out of poverty is the same in Beverly Hills as in rural Alabama).

The good news is that there is a clear blueprint for creating a more accurate methodology for measuring poverty, recommended by an expert panel by the National Academy of Sciences (NAS). The bad news is that this panel made its recommendations in 1995 (no, that is not a typo) and still there has been no official change made by the federal government. Researchers and policy makers looking for more precise numbers on poverty have devised alternative methods for estimating poverty (e.g. using a ratio such as 200% of the federal poverty line). New York City has even moved forward on doing its own calculations, based on the NAS recommendations. Federal legislation has been introduced in Congress to implement the NAS recommendations, and Blank and Kerr suggest the Obama administration could make the change administratively without legislation.

So, what’s the hang up? Certainly part of the problem is that such an alternative measurement would certainly increase the number of people defined as living in poverty. I remember a “West Wing” episode several years ago in which the administration was considering revising the poverty methodology to give a more accurate picture of how many and who was living in poverty. But in the end they decided against it because the political advisers said that President Bartlet (played by the great Martin Sheen) would be known as the leader on whose watch the numbers of people living in poverty increased substantially overnight.

Well, poverty is certainly going to swell over the next couple years no matter what, so perhaps this is the perfect time politically to change how we measure poverty. Besides, with a clearer understanding of who is poor, hopefully we can be smarter about how best to help them get out, and stay out, of poverty.

Published by Bill

Social justice advocate and collaborative leader

4 thoughts on “Measuring poverty

  1. Bill,

    The main reason the methodology is not changed is because the “official” poverty rate enters into MANY federal government formulas to allocate resources to the states. Therefore, there is a strong incentive to keep the status quo, no state wants to lose resources. The Census Bureau used to publish in their web site “alternative” measures of poverty (introducing some of the suggestions from the NAS panel), but they don’t do it anymore, for the same political reasons, as I understand…

    About the definition and measurement of poverty, there is this very good paper “What Does It Mean to be Poor in a Rich Society?” by Robert Haveman, that’s worth reading: http://www.lafollette.wisc.edu/publications/workingpapers/index.html#2009-001

    Oscar

  2. I can imagine that politicians are reluctant to be associated with a dramatic “increase” in the number of those living in poverty. Here’s hoping that Obama does the right thing.

    It’s sad that the government needs complex formulas to determine who is living in poverty. I realize unfortunate need for this accountability, but if you spend a couple of hours with someone it is pretty easy to tell if they are in need or not.

    I just happened across your blog today and will be adding it to my list. Best wishes.

    – Schev

  3. Good point Oscar. The status quo is unfortunately the (non)driving force in DC. Hopefully something positive that could come out of the current crisis is some innovation. And thanks for the link to the paper. It looks like a great resource.

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