November 7, 2011 6:26 pm
US poverty measure paints bleaker picture
By Robin Harding in Washington
http://www.ft.com/intl/cms/s/0/74e8c4fa-0960-11e1-a20c-00144feabdc0.html#axzz1d2ypRTvP Poverty in the US is even worse than previously thought, according to a new official measure
http://www.census.gov/prod/2011pubs/p60-241.pdf that takes better account of the cost of living.
In 2010, 16 per cent of Americans lived in poverty according to a supplemental measure published by the Census Bureau for the first time on Monday, compared with the official figure of 15.1 per cent. That suggests an additional 2.5m Americans are poor: 49.1m rather than 46.6m by the official definition.
The supplementary figure illustrates how rising costs for health and childcare have added to poverty and paints a different picture of which Americans are poor. It may influence the current debate in Washington about how to reduce the US budget deficit by showing the role that programmes such as income tax credits and food stamps play to control poverty.
The official measure, introduced in the 1960s, compares income before tax to a threshold of three times the cost of a basic diet of food. In 2010, for a family of two adults and two children, that threshold was $22,113.
But the official measure takes no account of changes to tax and benefits that affect after-tax income, costs that have increased in time, such as medical care or the higher cost of living in some parts of the US.
Adjusting for these factors increases the average poverty threshold to $24,343 and suggests that the demographics of US poverty are different.
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