The real poverty rate in Massachusetts may be higher than we thought, according to a new and improved poverty assessment released this morning by the Census Bureau.
Whereas the so-called “official” rate puts state poverty at 11.5 percent, the new more comprehensive measure suggests that actually 1 of every 7 people in Massachusetts lives in poverty, or 13.8 percent.
For the last 50 years, the Census Bureau has been measuring poverty by comparing earnings against certain poverty thresholds. If you’re a family of four living anywhere in the US, and all together you earn less than about $24,000 a year, then you’re in poverty. If you earn more, you’re not.
Trouble is, this measure doesn’t include taxes, or noncash benefits like food stamps. Nor does it account for regional differences in housing costs or the growth in health care spending.
Since 2011, however, the Census has also been producing a second measure of poverty, which factors in all of these things and more. It’s called the supplemental poverty measure, or SPM. And that’s the measure, released today, that says one in seven people in Massachusetts live in poverty.
One reason Massachusetts fares worse under the supplemental measure is precisely because of the adjustment for regional housing costs. Housing in Massachusetts is expensive, and a family making $25,000 in the Bay State will have a harder time meeting basic housing needs than a family making $25,000 in Missouri or in Maine.
Do all states have more poverty under the SPM?No. There are 26 states where the supplemental poverty rate is actually lower than the official measure. So it’s not as if this is just a looser standard.
What else can the SPM tell us?
Because it accounts for tax breaks, food stamps, and other kinds of benefits, the supplemental poverty measure can actually tell us how effective these programs are at combating poverty.
It turns out Social Security is by far the most effective antipoverty program. Without it, the nationwide poverty rate would be more than 50 percent higher. Food stamps, the earned income tax credit, and Social Security disability all have smaller, but still significant effects on poverty in the United States.
Will the SPM become the new standard?
Not for now. While it provides a more robust and comprehensive picture of poverty, the supplemental poverty measure has its own drawbacks.
For one thing, the Census Bureau has only been calculating the SPM for the last four years. The “official” rate goes back 50 years, making it possible to track changes over time (although some researchers have tried to do this with the SPM as well).
What is more, a number of government programs rely on the official poverty rate to gauge eligibility. So while swapping in a new measure might sound like a mere technical fix, it could actually have a far-reaching effect on people’s lives.