Tuesday, November 08, 2011

According to new measurement technique, fewer children, blacks and rural people are poor

There are fewer African-Americans and children living in poverty than previously estimated, according to a new measurement technique that the U.S. Census Bureau instituted Monday and says is more accurate. The measure also shows a slightly higher poverty rate for the nation last year than previously calculated.

Though the "supplemental poverty measure" will not replace official measures of poverty that depend on calculation of federal assistance to states, it could provide a more accurate picture of poverty in rural America, where high rates have been consistent.

Sabrina Tavernise and Robert Gebeloff of The New York Times report results of the new measure: "There were 3.2 million fewer children found to be living in poverty in 2010, compared with the official measure, a difference of about 4 percentage points, and 800,000 fewer poor African-Americans, or about 2 percentage points less." They write that a big reason for this is the expansion of food stamps and the earned-income tax credit under President Obama that helped lift 11 million people above the poverty line.

"The new measure shows a 15.9 percent poverty rate among people 65 and older, nearly double the 9 percent rate of the official measure, largely because the new measure deducts medical expenses from income," Tavernise and Gebeloff report. Census official Kathleen Short told them the new measure "was developed primarily to give policy makers a sense of the effect that social safety-net programs are having" by including costs like child care and out-of-pocket medical care.

While the measure is more accurate in ways, some think the number of elderly living in poverty has been overstated because it doesn't take into consideration money from savings and the stock market. University of Chicago economics professor Bruce Meyer told the Times: "If you look at what they consume, you see that their living standard is much higher." (Read more)

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