New Answers to Who Is Poor in America

May 15, 2017

Recent mail included not only the usual junk, requests for donations and bills, but a magazine from Stanford University’s Center on Poverty and Inequality. Such a surprise, since I hadn’t ordered it. And such an informative and thought-provoking issue.

It’s a series of what it terms “blueprints” for ending poverty, prefaced by two framing papers. One presents key facts that reforms should reflect, the other a litmus tests for them.

They seem to me more groundbreaking than the blueprints, fine as those are. So I’ll focus on the first—and more meaty — here. Will follow up with the second soon.

More Jobless, Childless Adults

The authors present two facts that indicate a changing structure in U.S. poverty.

They’re often ignored because they’re at the margins of our safety net programs and so would be harder to accommodate than, say, much-needed reforms in Temporary Assistance for Needy Families. (Unintentionally confirming this, none of the blueprints addressed them.)

The first is the ongoing increase in jobless poverty — more specifically, the unemployment rate for working-age adults. Many are probably “disconnected,” i.e., not looking for work and so not counted in the reported rate.

It rises during recessions, of course. But in good times, as well as bad, working-age adults who don’t have children living with them — often referred to as childless — have dropped out of the labor market.

More in Dire Poverty

So the poverty population as a whole is becoming “a more deprived and destitute class”—not just poor, but deeply so, i.e., living on incomes less than half the poverty threshold or even the extreme $2.00 a day poverty. This is the second key fact.

But our safety net programs don’t reflect it, for several reasons. One is that they’re work-based. TANF, for example, aims to increase the training that will gain participants jobs. The Earned Income Tax Credit is only for people who’ve earned money by working.

The programs are also family-based. TANF, of course, is only for parents who’ve got children living with them. The EITC favors married couples with children and sets a very low maximum benefit for the childless.

Opportunities Out of Reach

The third key fact differs from the others because it’s not directly a change in the structure of our poverty population. The authors refer to it as the “commodification of opportunity”—a fancy term for several developments that help account for poverty.

They include low and unpredictable wages for both workers in regular jobs who’ve got, at most, a high school education and the growing number in the gig economy, e.g., Uber drivers, temp agency employees.

Two other developments have to do with the composition of the poverty population. One is the growing share who are Hispanic. Another, closely related is the share who are immigrants.

They’re at high risk not only because many are undocumented and so justifiably fear complaining of wage theft. Most who are legally here don’t become eligible for major safety net benefits for their first five years.

And however long they’ve been here, a goodly number have limited job opportunities because they speak little or no English.

Still another and again related development is increasing neighborhood segregation. The authors focus here on research on children who grow up in poor neighborhoods, i.e., the potential next generation in the working-age adult poverty population.

But, in fact, living in a poor neighborhood disadvantages the current generation too —  because of few nearby decent-paying jobs, for example, public transportation to get to them, fewer working neighbors to serve as networks and such high levels of stress as to interfere with job training and searches.

Now comes genuine commodification, i.e., the need to buy what’s needed for a decent-paying job. When TANF began, a diploma from a public high school sufficed for a job that paid more than a poverty-level wage.

As we all know, you now need postsecondary education and/or training for in-demand skills. Both are often costly. So it’s sort of them that has gets and those that don’t doesn’t.

Add to these the difficulties low-income parents have in giving their children opportunities that will pay off in the long run. These include high-quality early education delivered in daycare centers.

And following that, ready access to good public schools, since that generally requires living in a well-off neighborhood, where rents are high or nonexistent because it’s a homeowner community.

The authors intersperse these facts with brief remarks on what policies could do and what some already are. But what’s clear enough is that our anti-poverty plans need some significant adjustments.

Advertisements

Much Progress Toward Reducing Poverty, But Much More to Do

March 23, 2017

So many news reports, analyses, blog posts, etc. on how the House Republicans’ repeal-replace bill and/or Trump’s budget would harm poor people. I thought I should clear my mind and purge anger, however briefly.

So I reread a fleshed-out speech that Jason Furman, Obama’s Chairman of the White House Council of Economic Advisors—gave a few days before Trump’s inauguration.

It seems even more timely now, as we learn more about what the new administration and Republican House leaders have in mind. But it’s relevant also to what state — and in some cases, local — policymakers have done and can do.

So a brief summary of the hefty, research-based framework and then the agenda Furman lays out.

What Accounts for Poverty

“Poverty is shaped by market forces and government policies and programs,” Furman says. Market forces are basically those that determine what people earn by working, investments and profits from sales. Furman focuses solely on the first.

Government policies and programs include other pre-tax income, e.g., Social Security benefits, post-tax cash transfers like refunds from the Earned Income Tax Credit and cash-equivalent transfers like SNAP (food stamp) benefits.

Significant Progress Toward Reducing Poverty

Forget all that rhetoric about throwing trillions at the problem with no impact on poverty rates. The poverty rate, as measured by a back-looking version of the Census Bureau’s Supplemental Poverty Measure was 41% lower in 2015 than in 1967, as the War on Poverty was setting in.

But the news here is that government anti-poverty programs account for the drop. Market-income poverty has remained essentially flat — and its deep poverty rate risen by nearly 3%.

Why No Progress From Market-Income Poverty

Furman identifies three market-income factors that could lift poor workers and their families over the poverty line — productivity growth, i.e., output per worker per hour, where the income generated flows and labor force participation, i.e., the percent of the population over 16 years old that’s working or actively looking for work.

Productivity growth slowed about 20 years ago, though it recently ticked up. The big difference from the prime period the CEA identified is that most of the income flows to the top — very large salaries for top management, corporate decisions to boost stock prices by buying back shares and maximizing dividends.

So productivity growth and average worker pay, plus benefits no longer closely track. The gap has, in fact, steadily widened, as the Economic Policy Institute’s graphs show.

Meanwhile, the labor force participation rate has trended down, recently reaching a 38-year low. Many reasons for this—retirement of baby boomers, for example, more young people going to college, more people (mainly women deciding to stay home with the kids because child care costs more than they’d earn.

But that still leaves a contingent of discouraged workers — those who looked, but gave up, those who decided it was futile to try — in many cases because they’ve found or have reasons to believe that they don’t have the knowledge and/or skills employers demand.

What the participation rate means, of course, is less household income — and less pressure on employers to offer higher wages.

Where to Go From Here

Furman’s agenda for further progress follows logically from his analysis. It has four major items.

Do no harm. Evidence shows that the safety net works — not only in the short term during recessions, but in the long term because the benefits it delivers have lasting effects on children’s prospects for moving up the income scale. So we should avoid policies that make it less effective, including block grants. (Told you this was timely.)

Focus on raising market incomes. This will involve policies to boost economic growth, but also changes to shift more of the gains to lower-income workers. Measures would raising minimum wages, as 22 states, the District of Columbia and more than 60 local communities have.

Furman also names expanded unions — presumably mostly in the private sector. This would also require repealing laws in half the states that allow workers to benefit from union bargaining without joining — and laws in three that have weakened public-sector union bargaining.

For individual workers and prospective workers, we need better programs to connect workers to jobs. Also more and better formal education.

On the more side, Furman cites research showing that low-income children fared better as adults when they participated in early childhood education programs. On the better, everything from that to college and beyond.

Rounding out this part, Furman looks to unspecified steps to reduce monopsony, i.e., cases where only one employer or a few control the labor market, thus enabling them to keep wages low..

Take further steps to improve the safety net. We need, for example, to increase funding for programs that egregiously fail to serve people who are or ought to eligible, e.g., for Temporary Assistance for Needy Families, housing assistance.

We need to expand the EITC so that it’s a work incentive for childless adults, whom we still tax into poverty or deeper poverty.

And we should redesign the unemployment insurance program so that recessions automatically trigger more weeks of benefits or bigger benefits, rather than depending on what Congress decides at any given moment to do..

Think harder about people who fall through the cracks. Furman has no specific suggestions here, just notes the Edin-Shaefer findings on families living on $2 or less per day.

Worth noting, however, that the team attributes the sharp rise in such extreme poverty to the virtual end of cash assistance for non-working families when TANF replaced welfare as we knew it. Furman too zeroes in on TANF in a lengthy boxed insert.

So as we martial our defenses of safety net programs and protections for under-paid (and unpaid) workers, it’s still worth holding onto a vision and speaking out for a better day and better ways. And worth not losing sight of the policy-driven progress we’ve already made.


Poverty in the Presidential Campaign: What’s There, Not and Why

October 24, 2016

Back in 2012, Greg Kaufmann, then a columnist for The Nation, launched a social media campaign that eventually morphed into the TalkPoverty.org blog and related projects.

The aim was to get poverty issues into what Kaufmann referred to as “the mainstream political debate.” To that end, we were to tweet poverty-related facts and questions to the moderators of the Presidential debates, using #TalkPoverty as the hashtag.

Now we’re nearing the end of a seemingly endless campaign that becomes more bizarre with each passing day. Kaufmann and colleagues have relaunched theirs, with a new hashtag — #WhereDoYouStand.

They want us to tweet questions on specific policies, e.g., a minimum wage increase, expansions of Social Security. We were then to post them on a website that let others vote for questions they’d most like the moderators of the second debate to ask.

Last time I checked, only three such questions had gotten enough votes to put them in the top 30 — those that the moderators had said they’d consider. Perhaps they did, but they didn’t ask any of them. No poverty talk in the third debate either.

We do, however, have one Presidential candidate who’s chosen to talk poverty, as distinguished from telling all blacks they’re poor. Hillary Clinton (or her people) authored an op-ed for The New York Times that actually used the p-word and presented a plan of sorts.

It’s the sort of thing the #WhereDoYouStand campaign seems to have in mind, though perhaps less specific in some policy areas due to the column-length constraint.

No such constraint on her website, which has lots of initiatives tucked into a dozen or so issue areas. Her recently-announced Child Tax Credit reforms flesh out bullet points there.

All this is fine for policy wonks — and perhaps for others who can seize on a few issues that especially matter to them. But it’s hard to get one’s mind around the agenda as a whole.

The Times rousing endorsement alludes to this, allowing as how Clinton’s policy proposals are thus far a “pointillist collection.”

I think we’d benefit from a framework of some sort. I haven’t seen it in the campaigns — and doubt that any of us will. And not only because we’re in the homestretch with one campaign imploding.

An NPR reporter says that Trump has basically one poverty proposal — “jobs, jobs jobs.” We can piece together something more like an agenda from his other campaign themes, plus earlier remarks and ghost-written books.

Poverty is the fault of people who don’t work and policies that encourage them to laze around. So we’ll blow the policies away and create a bazzilion more jobs. Keep undocumented workers from having them — and apparently some who have legal authority to work.

We’ll make all safety net benefits temporary and condition them all on work. Don’t let teen mothers have them unless they “jump through some pretty small hoops” — including, it seems, finding a group home to live in.

So I’m mulling over what a credible framework would look like. What, in other words, would the major headings be for an agenda to address the causes and consequences of poverty in America?

On the other hand, I’m mindful of reasons our candidates would rather not make poverty their “vision thing,” to borrow from then-candidate Bush, the first.

Economist/blogger Jared Bernstein observes that “the poor are not necessarily the swing voters you’re trying to pick off.” In other words, they’re likely to vote for the candidate from whichever party they usually vote for.

But they’re not all that likely to vote, as a recent Census analysis shows. Nothing new about this, except the figures. We see similar low turnout rates dating back to 2004.

We’re well aware of barriers states impose, especially since the Supreme Court struck down a key part of the Voting Rights Act. But perhaps more people who could vote would if they thought the outcome would make a difference in their lives.

They wouldn’t necessarily turn out if a candidate made poverty, so-labeled central to his/her campaign, however.

A Pew Research survey that focused on views about the economy and government policies found that a very large majority of respondents viewed themselves as middle class — 76%, counting those who put themselves in the lower middle.

Nearly 20% of adults under 65 had incomes at or below 150% of the very low poverty thresholds that year. But only 11% of Pew’s respondents identified themselves as “lower class,” perhaps because that’s a generally pejorative term.

But so is “poor” — thanks to years to fault-finding, fraud myths and the like. Thanks also to years of identifying “middle class” with contrasting virtues like hard work, prudence, responsible child-rearing (and bearing), etc.

That’s partly why our Presidential candidates (and others) refer instead to “income inequality,” a political science professor says.

Perhaps also why Clinton headlined her Child Tax Credit proposal as a “middle class tax cut,” though more than three-quarters of the people who’d benefit are poor, according to Center on Budget and Policy Priorities’ estimates.

And it’s probably why she, as Bernstein notes, “doesn’t always connect the dots to poverty and low-income workers,” even when she’s teeing up plans like the CTC reforms, a minimum wage increase and investments targeted to deeply depressed communities.

Probably also why Trump has chosen to connect the dots between indifferent (or worse) politicians and the griefs, resentments and fears of Americans whom he addresses as the once and future middle class.

“If we want the media to talk about poverty, we have to turn anti-poverty work into an anti-poverty movement,” says Jeremy Slevin at TalkPoverty.org. He’s referring specifically to the talking heads who moderate debates.

But it seems equally apt for candidates, whether prompted by “the media” or otherwise — and whether contending for the Presidency or down-ballot offices.


New Census Report Proves Again That Anti-Poverty Programs Work

September 19, 2016

Only so much number crunching a lone blogger like me can do. So I’m behind the curve on the Census Bureau’s Supplemental Poverty Measure report, issued the same day as the report using the official measure.

As in the past, the SPM shifts poverty rates up and down. The overall poverty rate, for example, is higher — 14.3%, as compared to the official 13.5%. The child poverty rate drops from 19.7% to 16.1%, while the senior poverty rate rises from 8.8% to 14.3%.

These differences, as well as others derive from numerous differences between the measures. For example, the SPM includes the children who aren’t part of the official measure’s poverty universe.*

This is relatively minor, compared to other differences — thresholds among them. Instead of those I’ve nattered about, the SPM begins with consumer spending on four basic needs, plus a small additional for others.

It then deducts for work-related expenses, e.g., transportation, child care, and for child support payments and medical costs that individuals themselves must pay. (Those medical out-of-pockets largely explain the higher senior poverty rate.)

The annual threshold adjustments differ too — and in a way that may make yearly changes in the SPM poverty rates “confusing,” the Center on Budget and Policy Priorities says. It specifically cautions against comparing the new SPM figures to last year’s.

I’ll confine myself then to what we can glean from another major difference. For the official measure, only pre-tax cash income counts in determining whether a household and the members it recognizes were poor.

The SPM deducts for taxes. It also includes income derived from the refundable tax credits and the cash-equivalent value of a some safety net benefits that the federal government funds either entirely or in combination with states.

What we can see, because of an analysis the Bureau provides, is what poverty rates would have been without one or another of the safety net benefits — both cash and cash-equivalent. It folds in Social Security retirement and disability benefits, though they’re not for low-income people only.

As always, Social Security proves the most effective anti-poverty measure we’ve got. Without the benefits it provided, about 26.6 million more people would have been part of the poverty rate, boosting it to over 22.6%.

Well over a third of all seniors would have been poor — nearly triple the rate with those benefits factored in.

The Earned Income Tax Credit and Child Tax Credit again come in second. They lifted about 9.2 million workers and their dependents over the poverty threshold, including 4.8 million children. Their already-high poverty rate would have been 22.6% without the credits.

Not all low-income workers benefited, however. Current law denies the federal EITC to both young and elderly workers. And the credit is very small for age-eligible adults who don’t have children — or who do, but not in their homes for more than half the year.

In short, an anti-poverty measure that works, but could work better. One could say the same for other safety net benefits the SPM report accounts for.

SNAP (the food stamp program), for example, as I’ve often said. Yet even with its current limits, it lifted roughly 4.6 million people, including nearly 2 million children out of poverty last year.

Results for Temporary Assistance for Needy Families, which I’ve also often gone on about, were pathetic — a 0.2% nick in the poverty rate.

An even more pathetic impact from the Low Income Home Energy Assistance Program, which neither the administration nor Congress seems much interested in funding.

We don’t see a large boost over the poverty thresholds from federally-funded housing subsidies either — a generously rounded up 2.5 million fewer poor because of it. In this case, we do have an actively interested administration — and what seems moderate support from majorities in Congress.

But the SPM thresholds take account of what people must spend for housing. And, as everyone knows, housing costs have been rising virtually everywhere.

So federal budgets would need to do more to keep those costs from driving up poverty rates than merely ensure that as many households have vouchers as they do now — or the same chance to live in public housing.

The Census Bureau reports each of the anti-poverty programs separately. So we can’t see how many people were lifted out of poverty by, say, SNAP plus a housing subsidy.

The Center on Budget rolls all the programs together and concludes that they cut the poverty rate almost in half last year.

It also notes, as have other analysts, that households surveyed tend to under-report the benefits they’ve received — mainly just because it’s hard to recall exactly how much one gets, perhaps from multiple sources and usually over some period of time.

At a minimum then, the safety net benefits, plus Social Security lifted about 38.1 million people over their poverty threshold — more seniors than younger people, but still about 7.9 million children.

CBPP warns that cuts in the programs would plunge more people into poverty. That’s, I think, what any fair-minded person would conclude from the SPM analysis.

It shows, with hard numbers, that our major anti-poverty programs work, notwithstanding the constant drumbeat from the right about how they’ve failed. It also shows they could work better — some perhaps if just more amply funded, some surely if also reformed.

* The SPM report adjusts the official rates to include the missing children. So one finds a higher overall poverty rate and higher child poverty rate there.


Total DC Poverty Rate Ticks Down Again (Barely). Rates for Blacks Rise.

September 15, 2016

CORRECTION: The overall poverty rate change for DC falls within the margin of error. A preview table I saw indicated it didn’t. But I should have verified.

The Census Bureau has taken to blasting out all its major poverty reports in rapid-fire succession. So we now have the results of the American Community Survey — not a report in the usual sense, but a huge number of online tables.

They cover a wide range of topics. And the ACS sample is much larger than what the Bureau uses for its two other annual reports. So we can get reasonably reliable figures for states and smaller jurisdictions.

I’ve again dug into a few tables for the District of Columbia — mainly those most directly related to poverty. We could, I suppose, take heart from another year of progress. But it’s modest and mixed. Both the extent of poverty in the city — and related inequalities — remind us how much remains to be done.

Poverty and Deep Poverty Rates for DC Residents Still High

About 110,380 District residents — 17.3% — lived in poverty last year. The new rate is just 0.4%* lower than the rate reported for 2014. It’s 2.6% higher than the new ACS national rate — and rates for all but eight states.

It’s also nearly 1% higher than the local rate for 2007, just before the recession set in. The population has grown since then. So the seemingly small rate difference means that the District is now home to about 18,600 more poor people. And they’re very poor indeed, for reasons I’ll touch on below.

Roughly 58,700 District residents — 9.2% of the total — lived in deep poverty, i.e., had incomes less than half the maximum set by the poverty threshold the Census Bureau uses for a household like theirs.

The new rate is perhaps 0.1% lower than the rate for 2014 — in other words, basically the same. It too is higher than the rate for the nation as a whole.

Child Poverty Rate Still Far Higher Than Overall Rate

The child poverty rate has consistently exceeded the rate for the population as a whole, both in the District and nationwide. The local rate last year was 25.6%. Like the overall rate, it’s 0.4% lower than the 2014 rate.

But it still represents about 29,710 children — about 300 more than in 2014 because, again, the rate reflects a somewhat larger population. It too is higher than the disproportionately high national rate.

More than half the District’s poor children — 15,088 — were deeply poor. The new rate is higher than the 2014 rate — 13%, as compared to 12.4%.

Race/Ethnicity Gaps Still Large

Poverty is not an equal opportunity condition here in the District or anywhere else. As in the past, we see this writ in black and white in the ACS figures. Brown and tan also, though to a lesser extent.

Last year 26.6% of black District residents were officially poor, as compared to 6.9% of non-Hispanic whites. The deep poverty rate for the former was 13.3%, while only 4.5% for the latter.

Both rates for blacks were higher than in 2014. The plain vanilla rate for non-Hispanic whites was the same then, but their deep poverty rate somewhat higher.

For Hispanics, the poverty rate was 11.6% and the deep poverty rate 5.5%. The rates for Asians were 12.3% and 9.4%.

We see the same large disparities in the ACS figures for household incomes — a related, but broader indicator than the poverty rates.

The median household income for non-Hispanic whites was nearly three times the median for black households — $120,400, as compared to $41,520. Median incomes for Hispanic and Asian households fell in between.

The median for non-Hispanic white households was an eye-popping $63,400 more than the national median — an even larger difference than reported for 2014.

More Residents Suffering Hardships Than Poverty Rates Show

I always remark, at least in passing on the fact that the poverty thresholds the Census Bureau uses for analyses like these are very low.

They’re almost surely too low to accurately reflect the number of households without enough money for basic needs in communities nationwide. But they’re egregiously too low in high-cost communities like the District.

Consider, for example, a single mother with two children. They’re officially not poor if her income, before taxes was roughly $19,100 last year.

An affordable apartment for them would have had to cost no more than about $477.50 a month. But a modest two bedroom apartment, plus basic utilities cost roughly $980 more. It would have left the mom with about $1,580 for all her family’s other basic needs over the course of the year.

Even with SNAP (food stamp) benefits, she’d have been hard pressed to put enough food on the table in part because groceries here cost far more than the nationwide average, according to a cost-of-living database.

And the benefits assume she’ll spend 30% of her own adjusted income. So there goes a quite a bit of the money she’d have left after paying the rent. Probably more than her expected share, in fact. If not, then some hungry days for her.

She’d still have to pay for a host of other things, of course, e.g., clothes, soap, toothpaste and cleaning supplies, transportation. These aren’t necessarily costlier in the District than elsewhere. But we know daycare is.

She’d have to pay some part, even with a subsidy. The subsidy’s not a sure thing for a working woman like her, however. Without it, the average of cost even just after-school care for her kids would exceed her total income.

I don’t think I need to flog this point further. But we do need to put the new District poverty figures in perspective. [Your policy message here.]

* All the ACS tables include margins of error, i.e., how much the raw numbers and percents could be too high or too low. For readability, I’m reporting both as given. The overall poverty rate beats the statistical text, but others Small year-over-year changes may mean no real differences.


U.S. Poverty Rate Slides Down

September 13, 2016

The Census Bureau has just reported that 13.5% of people in the U.S. — about 43.1 million — were officially poor last year. One wouldn’t pop a champagne cork over numbers like these. But they’re lower than reported for 2014, when the rate was 14.8%, representing roughly 46.7 million very poor people.

Rates declined for every major population group the report breaks out, except working-age adults with disabilities, whose rate remained 28.5%. All reported groups, except Asians also had lower deep poverty rates, i.e., household incomes less than half the thresholds the Bureau uses to separate the poor from the non-poor.

On the flip side, we still see large disparities. And the somewhat improved rates don’t necessarily reflect meaningful income gains.

Children Still the Poorest, Seniors Still the Least

The child poverty rate has exceeded the overall poverty rate since at least 2006, when I started tracking. Last year it dipped to 19.7%, just 1.4% lower than in 2014. The new rate represents about 14.5 million children — more than a third of all the poor people in our country.

About 6.5 million children — 8.9% — lived in deep poverty. This too is somewhat fewer than in 2014, but still alarming, especially given what we know about the lifelong damages that even just plain poverty can wreak on young children.

As in the past, people 65 years and older had the lowest poverty and deep poverty rates among the major age groups — 8.8% and 2.8% respectively. We can chalk this up largely to Social Security retirement benefits, as the Census Bureau’s new report on its Supplemental Poverty Measure shows.

Race/Ethnicity Gaps Still Yawning

Nothing much new here, except the rates. For example, the poverty rate for blacks was still more than two and a half times the rate for non-Hispanic whites — 24.1%, as compared to 9.1%.

The deep poverty rates nearly mirror these gaps — 10.9% for blacks and 4.3% for non-Hispanic whites.

Hispanics fared better than blacks, but hardly well. Their poverty rate was 21.4% and their deep poverty rate 8.5%.

Rates for Asians were lower — 11.4% and 6.2% respectively. But several analyses suggest we’d see some larger gaps — and in other cases, virtually none or even reversed — if the Bureau differentiated among the subpopulations this group comprises.

Low Inflation a Factor in Poverty Rate Drops

We should take always take poverty rates like these with a large grain of salt because the thresholds are so very low. One dollar over the threshold and everyone living in the household (except for some children) is officially not-poor.*

The thresholds aren’t altogether fixed, however. The Bureau adjusts them annually, based on the CPI-U — what consumers in metro areas spend on a market basket of goods and services.

The CPI-U remained virtually flat in 2015. So even a miniscule increase in household income could boost all its members over the applicable threshold.

In other words, the new, lower poverty rates don’t necessarily signal substantial, widespread income gains. They do, however, mean that more workers got paid somewhat more — and more who wanted to work got jobs that paid more than a pittance.

* Children under 15 who aren’t related by birth, marriage or adoption to any of the adults in the household are not part of the “poverty universe,” so far as the official measure is concerned.


Measuring Poverty the Way We Understand It

August 22, 2016

It’s a well-known fact that the official poverty measure we use doesn’t accurately tell us how many poor people live in the U.S. It was never supposed to be more than an initial baseline for War on Poverty programs.

But here we are, more than 50 years later, and it’s still the basis for setting income eligibility levels for most safety net programs, plus some others that fund services in low-income communities.

The Census Bureau has a better measure — prudently named the Supplemental Poverty Measure so as to not imply it will supplant the official measure. It’s still unfinished in some important ways, e.g., sufficient adjustments for differences housing costs.

But even a more refined measure would still produce poverty rates based on pre-tax income, plus the income equivalent of some near-cash benefits, e.g., SNAP (food stamps), and the refundable tax credits.

We’ve had other measures proposed. Some economists, for example, recommend a consumption-based measure — basically, what a household owns, spends and, in some cases, has through government spending.

A team at Columbia University, supported by the Robin Hood Foundation is using a different definition to track poverty in New York City. The aim, the Foundation says, is to “take a deeper, more realistic look at disadvantage.”

This, we see, involves several things. First, the researchers use Census data, its poverty thresholds, adjusted for local rental housing costs, and an adapted version of the SPM to measure poverty in the city.

Second, the team surveys a sample of households in all income brackets, asking questions to identify those that experience “material hardships, i.e., deprivations due to lack of money.

In other words, the project uses a concept of poverty more like the way we actually think about it — not how much money a family has, but whether it has enough to meet basic needs. The survey implicitly defines them as food, housing, utilities and medical and dental care.

A household that sometimes comes up short is said to experience “moderate material hardship.” The hardship becomes “severe” if a household experiences it chronically or acutely — for example, is so short of money for housing that it has to move to a shelter.

The hardship concept isn’t altogether novel here in the U.S. For example, a household that has very low food security, as the U.S. Department of Agriculture defines it, can’t always afford to buy enough food for everyone to have enough to eat.

The Census Bureau’s Survey of Income and Program Participation includes a section it classifies as “adult well-being.” The questions are actually about the household’s well-being, including food security, the conditions of the housing it lives in and whether it can afford housing-related expenses.

SIPP uses the same sample of households repeatedly — some for as long as four years. It’s similar, in this way, to the third aspect of the “deeper, more realistic look” that gives the Robin Hood Foundation project its name.

It too tracks the select material hardships over time by surveying the same households for several years running. But it’s focused on them, rather than participation in programs that compensate for lack of enough income.

The survey does, however, include some questions about receipt of public benefits as part of its effort to localize the SPM. And it asks what I infer are half a dozen questions about requests for help and responses. (I’ve looked in vain for a copy of the survey itself.)

The project aims ultimately to capture the dynamics of poverty — and certain related material hardships. Understanding them, the partners say, will better equip policymakers, nonprofits and private-sector donors to develop solutions.

We’ve had three reports thus far. Each slices and dices the survey results differently. Here’s a handful of things we learn about the poverty/hardship dynamics — none, I suspect, peculiar to New York, except at the data level.

Far more New Yorkers experienced at least one material hardship than fell below the relevant poverty line. Far more, in fact, experienced at least one severe hardship. Poverty was nevertheless a major factor, as you’d guess.

Very few New Yorkers lived in poverty both when first surveyed and a year later. Slightly more fell into or rose out of it, presumably by losing or gaining income, certain cash-equivalent benefits or both.

Material hardship seems more persistent. Of the eye-popping 48% identified as experiencing at least one, nearly half still experienced it — or maybe some other — a year later, if not longer. (The first survey, as reported, didn’t ask how long respondents had already experienced the hardships covered.)

Not all New Yorkers who suffered a material hardship sought help. But majorities did — more for some needs than others. Very few said they got all the help they needed — at least, within the short timeframe the survey then covered.

Help they may have received somewhat later didn’t do all that much good. Slightly less than a third no longer experienced the hardship — a troubling finding for the project’s target audience.

Help did even less to lift households out of poverty, though the survey asks about help that could have — finding a job, for example, or getting public benefits. Only 2% more households that said they got no help remained poor than those that said they got all the help they needed.

On the other hand, getting timely help apparently averted poverty for a higher percent of those that swiftly sought it and said they got all needed. This may include people who sought help with a health problem, rather than a hardship that a health problem may have caused.*

Some of the dynamics Poverty Tracker reports aren’t altogether new. The Census Bureau, for example, has used its survey data to follow near-poor people, including their lapses into full-blown poverty.

A study by an economist at the University of California, Davis tracked transitions in and out of poverty, linked to factors that help explain them. The Urban Institute cites many other studies that have parsed the in-and-out (and back in) dynamics.

But we don’t, to my knowledge, have anything as expansive for material hardship. Some other countries are far ahead of us, as a complex study by the OECD (Organisation for Economic Cooperation and Development) indicates.

The authors say what seems a suitable conclusion here. “Poverty is a complex issue, and a variety of approaches are required for its measurement and analysis.”

* The survey asks separate questions about health problems. These are certainly a disadvantage — the overall scope of the project. But analyses thus far have not linked them to material hardships, though one did look at the correlation to poverty.