By Tara Mancini
This week, all around the country families will gather to celebrate Thanksgiving, a day known for eating turkey, but also for giving back to those in our communities who are in need. Over the last few years, a recession and weak economy have contributed to a rise in the percentage of people who are living in poverty. In 2011, the official poverty rate reached 15.0%, and the supplemental poverty measure, reflects an even higher rate of 16.1%.
Not everyone may be familiar with the supplemental poverty measure, as its release last week marked only its second annual release. The supplemental measure was developed in response to concerns that the official measure, which has not been modified since its inception in 1964, is inadequate. While the official measure only takes pre-tax income into consideration, the supplemental poverty measure attempts to get a more accurate account of a person’s resources. As a result, the supplemental measure counts the the value of in-kind benefits, such as the Supplemental Nutrition Assistance Program (SNAP), subsidized housing, and home energy assistance, minus necessary expenses for critical goods and services. As it’s name indicates, this supplemental measure is just that, and therefore it does not replace the official poverty measure. Still, the supplemental measure is a great tool for policymakers and advocates, as it can be viewed as a more comprehensive snapshot of one’s resources.
Findings from the 2011 supplemental poverty measure reveal better rates for some groups, and worse for others. For instance, the supplemental poverty rate for children is lower than the official rate, mostly due to accounting for in-kind benefits. In contrast, the supplemental rate for the elderly is 15.1%, almost double the official rate as a result of taking into account necessary expenses. Even with these changes for children and the aged, children still have a higher rate when compared to 18-64 year olds and those over age 65; which truly speaks to the breadth of poverty among our youngest and most vulnerable.
The supplemental measure was also used to compare poverty rates for race and ethnic groups. In 2011, the supplemental rate for Blacks was lower by 2.1 percentage points, whereas White, non-Hispanics, and Asians both had supplemental rates higher than their official rates.
To end on a happy note, the poverty rate for those with public health insurance is more than 5 percentage points lower when using the supplemental measure instead of the official one. While public health insurance benefits are not included in the supplemental measure’s in-kind benefits, medical out-of pocket expenses do count toward the necessary expenses that are deducted from one’s income. While not a causal link, this does suggest the possibility that public health insurance programs help to lift people out of poverty.
If you are interested in reading more of the report’s findings or the methodology used for computing the supplemental measure, you can access it here. Also, here are two other helpful blog summaries, one from Center for American Progress, and the other from Center on Budget and Policy Priorities.
