The New York Times reports that the federal government is experimenting with a new way to measure poverty. I think this is great news given that nobody has been happy with the old measure which basically only took cash income into account. It’s too early to see whether the new measure is better, but it’s hard to believe that it could get worse.
Federal officials describe the supplemental measure as experimental and a work in progress. It establishes a poverty threshold that depends on the cost of food, shelter, clothing and utilities “plus a little more” for “a population that is not poor but is somewhat below the median.”
The original measure figured costs for two adults and two children. The new one covers one adult and two children, a family structure more prevalent these days among lower-income households, and would be adjusted to reflect living costs in different metropolitan areas.
The threshold would be adjusted to calculate the value of in-kind benefits, like food stamps, and whether homeowners have a mortgage. Tax credits would be added to the total income and benefits; taxes, work expenses (including commuting and child care), and out-of-pocket medical costs would be deducted.
At least it looks like we’ll be able to better pinpoint the source of changes in year-to-year poverty rates which is always a good thing.
- Josh McCabe
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