The U.S. Census Bureau released the 2012 Supplemental Poverty Measure (SPM) on November 6. According to the new report, the national SPM 16% nationally for 2012, about 1 percentage point higher than the official poverty rate of 15%. The SPM shows that nearly 50 million Americans lived in poverty, three million more people than the official poverty measure estimates for 2012.
SPM estimates were released for the first time in 2010 in response to shortcomings of the official poverty measure methodology. The official poverty measure only considers cash income, excluding government benefits and geographic differences in housing costs. The SPM, in contrast, includes the value of social benefits such as the Supplemental Nutrition Assistance Program (SNAP), housing assistance and the Earned Income Tax Credit (EITC). The SPM also deducts certain expenses from income, including taxes, child care costs, and contributions towards health insurance premiums.
The SPM results in higher poverty rates for people 65 years and over, men, those who were 18 to 64 years old, married-couple families, Whites, Asians, the foreign born, and homeowners with mortgages. SPM estimates for children under the age of 18 (18%), and African-Americans (25.8%) are lower than the official poverty rates (22.3% and 27.3%, respectively). This reflects SPM’s inclusion of critical public benefit programs, including housing subsidies, which effectively keep some Americans above the poverty threshold.
The SPM also includes state level poverty estimates, using three-year averages from the Current Population Survey. The SPM rates are higher than the official poverty rate in 13 states and the District of Columbia. In 28 states the SPM rates are lower than the official rate. In the other nine states, the difference was not statistically significant. These differences are in part tied to the variation in housing costs across the country.
According to the data, assistance programs such as Supplemental Nutrition Assistance Program (SNAP) and housing subsidies played a key role in reducing poverty. In 2012, not accounting for SNAP would have resulted in a poverty rate of 21% for children rather than 18% and not accounting for housing subsidies would have resulted in a poverty rate of 16.9% rather than 16%.
View The Research Supplemental Poverty Measure: 2012 at: http://www.census.gov/prod/2013pubs/p60-247.pdf