A Deeper Look at Last Week's Poverty Numbers

September 22, 2015
by Tia Lewis, RESULTS U.S. Poverty Intern, and Meredith Dodson, Director of RESULTS U.S. Poverty Campaigns

As RESULTS volunteers know, the Census Bureau released its latest income poverty data last Wednesday and there were definitely some interesting findings. As we noted in our press statement and editorial memo, over one in seven (14.8 percent) Americans lived in poverty in 2014, statistically unchanged than in 2013. The “official” poverty rate in the Current Population Survey (CPS) is is based off of food consumption patterns from 1955, when low-income families spent roughly one-third of their income on food – now an outdated formula. Additionally, the CPS is based on pre-tax  cash income, including wages, Social Security, unemployment compensation, public assistance, educational assistance, etc..

Last week the Census Bureau also released their Supplemental Poverty Measure (SPM), a tool that more accurately captures other critical sources of income or defacto income such as the Earned Income Tax Credit (EITC) and the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps). According to the SPM, the poverty rate was 15.3 percent, also not statistically different from 2013. The SPM indicates that pro-work tax credits like the EITC helped to lift 9.8 million Americans out of poverty in 2014, including 5.2 million children, and SNAP lifted 4.7 million Americans above the poverty line. Many, including Dylan Matthews at Vox.com, argue that we should stop using the CPS and instead use the SPM.

But, another data set released September 17, the American Community Survey (ACS), found that poverty fell and median income rose in 2014 compared to the year prior. While the news may come as a surprise, there are a few things to consider as we move forward with this data. In 2014, about 3 million households are surveyed by the ACS in comparison to only about 100,000 households surveyed by the CPS. Our friends at the Center on Budget and Policy Priorities highlight that ACS data is perhaps the best indicator about the well-being of American families. In addition, the ACS data allows us to dig in deeper for state and local poverty data, which our friends at TalkPoverty.org have conveniently plugged into their interactive map.

For now, RESULTS will continue CPS data for national poverty numbers since that is what is regarded as the “official” numbers in the media, highlight the impact of EITC and SNAP using the SPM, and rely on the ACS data (and those who break it down like TalkPoverty.org) for state and local data.  While the Census SPM data has shown that programs that support low-income Americans are indeed effective, it is essential to note that more than 1 in 7 Americans and 1 in 5 American children are still living in poverty by any of these measures. The Coalition on Human Needs (using ACS data) notes that it would take 25 years to cut the poverty rate in half based on the reduction between 2013 and 2014 – though Congress has the power to make an impact and accelerate this progress, or make it worse. The work of RESULTS volunteers to generate media this month and make the case to Congress to save key provisions of the EITC and CTC is an incredibly important first step.

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