Currently the official government measure of poverty under-represents the number of poor in the United States. The seemingly simple formula, created in the 1960s, has set the national poverty threshold for decades. Last year the official poverty threshold was about $23,600 for a family of two adults and two children. Yet our official poverty yardstick fails to recognize the difference in standards of living across the United States. Whether a family lives in Cheyenne, Wyoming or San Francisco, California, where the average housing costs are 225% higher than Cheyenne, the government standard makes no adjustment for regional variations in cost of living.
The Supplemental Poverty Measure (SPM), an alternative measurement with no official influence on policy, places the national poverty rate at 15.5%, one point higher than the official measure. The SPM provides a more realistic measure of poverty across the U.S. It attempts to bridge the gap by counting food stamps, tax refunds, and other public assistance towards family income, an important factor for nonprofits that provide or support place-based programs and services. Additionally, the SPM makes adjustments for geographic location. Based primarily on housing costs, California’s poverty rate increases from 16% under the official measurement to 23%–making it the poorest state under the alternative measure.
Kathleen Short, the Census Bureau economist who authorized the latest SPM report, recognizes that the main difference between the measurements at the state level are due to regional variations in housing costs. According to Short, “The official poverty measure gets a lot of criticism…There are a lot of ways we could improve, to get a closer look at families in poverty, and better understand the difficulties they’re going through.”
Source: Keith Griffin, “California, the Golden State, is Actually the Poorest of All,” Equal Voice, October 21, 2014, http://www.equalvoiceforfamilies.org/california-the-golden-state-is-actually-the-poorest-of-all/.
Student Researcher: Hailey Oster (Sonoma State University)
Faculty Evaluator: Faye Smyle (Napa Valley College)