Official Poverty Measure Fails to Provide an Accurate Assessment of Anti-Poverty Programs

Posted February 25, 2015
Newsrelease officialpovertymeasurefails 2015

A report released today by the Annie E. Casey Foun­da­tion shows that the fed­er­al government’s offi­cial pover­ty mea­sure cre­at­ed in the 1960s uses out­dat­ed infor­ma­tion on how U.S. fam­i­lies are far­ing today, fail­ing to illus­trate the effect of pro­grams designed to help them. 

The new KIDS COUNT® Data Snap­shot, Mea­sur­ing Access to Oppor­tu­ni­ty in the Unit­ed States, points to a bet­ter index for mea­sur­ing pover­ty – the Sup­ple­men­tal Pover­ty Mea­sure (SPM) – which cap­tures the effect of safe­ty net pro­grams and tax poli­cies on fam­i­lies. By using the SPM, researchers have deter­mined that the rate of chil­dren in pover­ty has declined from 33% to 18% as a result of these pro­grams and policies. 

The offi­cial pover­ty mea­sure does not pro­vide the accu­rate infor­ma­tion pol­i­cy­mak­ers need to mea­sure the suc­cess of anti-pover­ty pro­grams – nation­al­ly and at the state lev­el,” said Patrick McCarthy, pres­i­dent and CEO of the Annie E. Casey Foun­da­tion. Rely­ing on this tool alone pre­vents pol­i­cy­mak­ers from gaug­ing the effec­tive­ness of gov­ern­ment pro­grams aimed at reduc­ing child pover­ty. Giv­en that child pover­ty costs our soci­ety an esti­mat­ed $500 bil­lion a year in lost pro­duc­tiv­i­ty and earn­ings as well as health- and crime-relat­ed costs, the SPM is an impor­tant tool that should be used to assess state-lev­el progress in fight­ing poverty.”

The Sup­ple­men­tal Pover­ty Mea­sure, cre­at­ed by the U.S. Cen­sus Bureau in 2011, fac­tors in the impact of a num­ber of social pro­grams such as the Sup­ple­men­tal Nutri­tion Assis­tance Pro­gram (SNAP) and the Earned Income Tax Cred­it (EITC) and takes into account ris­ing costs and oth­er changes that affect a family’s bud­get. The SPM also pro­vides a more accu­rate assess­ment of pover­ty lev­els on a state and region­al basis. It helps illus­trate, for instance, the vari­a­tions in the cost of liv­ing and the impact of fed­er­al pro­grams from one state to the next. 

Mea­sur­ing Access to Oppor­tu­ni­ty in the Unit­ed States pro­vides nation­al and state-by-state data using the SPM to show the effect of a vari­ety of resources to help low-income fam­i­lies. In a strik­ing depar­ture from offi­cial pover­ty rate data, the SPM shows that Cal­i­for­nia has the high­est child pover­ty rate, fol­lowed by Ari­zona and Nevada.

Sim­i­lar to the offi­cial pover­ty mea­sure, the SPM shows that pover­ty rates among Lati­nos (29%) and African Amer­i­cans (29%) were approx­i­mate­ly three times high­er than that of white chil­dren (10%). 

In every state, anti-pover­ty pro­grams tracked by the SPM have led to a reduc­tion in the child pover­ty rate. Because fed­er­al ben­e­fits are not adjust­ed for dif­fer­ences in region­al costs of liv­ing, they are like­ly to have a more sig­nif­i­cant impact in states where the cost of liv­ing is rel­a­tive­ly low. States and local­i­ties also vary in their con­tri­bu­tion to the safe­ty net pro­grams and tax poli­cies that can help move chil­dren out of pover­ty. These fed­er­al and state pro­grams and poli­cies helped cut the child pover­ty rate by more than 20 per­cent­age points in Ken­tucky, Mis­sis­sip­pi and the Dis­trict of Colum­bia. States where gov­ern­ment inter­ven­tion has had a less­er effect on decreas­ing child pover­ty include North Dako­ta, New Hamp­shire and Alaska. 

Con­tin­ued invest­ment in the devel­op­ment of the SPM can ensure our resources are direct­ed in ways that give our chil­dren the best oppor­tu­ni­ty to suc­ceed,” said Lau­ra Speer, the Foundation’s asso­ciate direc­tor, pol­i­cy reform and advo­ca­cy. It’s crit­i­cal that we look beyond just the fed­er­al pover­ty rate to eval­u­ate the suc­cess of impor­tant social programs.”

Mea­sur­ing Access to Oppor­tu­ni­ty in the Unit­ed States fol­lows the Casey Foundation’s 2014 report, Cre­at­ing Oppor­tu­ni­ty for Fam­i­lies: A Two-Gen­er­a­tion Approach, which out­lined addi­tion­al rec­om­men­da­tions for help­ing fam­i­lies raise them­selves out of pover­ty that include:

  • Expand­ing access to high-qual­i­ty ear­ly education;
  • Chang­ing tax cred­it poli­cies to help fam­i­lies keep more of what they earn;
  • Expand­ing and stream­lin­ing food and hous­ing sub­si­dies; and 
  • Devel­op­ing approach­es that link pro­grams for kids – like Head Start – with pro­grams for their par­ents, such as edu­ca­tion and job training.

Down­load Mea­sur­ing Access to Opp­prtu­ni­ty in the Unit­ed States

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