Poverty Measurements Need a Facelift

By Carrie Wolfson*

Tuesday, March 29, proved to be an important day for advancing our understanding of poverty, with two unaffiliated events tackling different aspects of this important issue. The Women of Color Policy Network, in conjunction with the Center for American Progress, hosted an event to discuss the measurement of poverty and poverty reduction programs within the U.S. Just one hour later, Spotlight on Poverty and Opportunity led an audioconference to discuss lessons that U.S. policymakers can learn from the U.K. on reducing childhood poverty.

The event on poverty measurement convened an array of policy experts for a discussion of how the method used to measure poverty affects our perceptions of programs that aim to reduce it. The main focus was the new Supplemental Poverty Measure (SPM), which will be published by the U.S. Census Bureau in the fall of 2011, along with the official poverty measure. The SPM accounts for a lot of important information that isn’t captured by the official poverty measure, which was developed back in the 1960’s.

Congressman Jim McDermott, the keynote speaker, explained the official measure is far too low, because it is based on antiquated assumptions about the portion of a family’s budget that should be spent on food.  In addition, it fails to account for the resources families gain from important federal programs, such as the EITC and SNAP (commonly referred to as food stamps). Those in favor of cutting these types of programs frequently point to the fact they haven’t reduced poverty rates. Yet benefits can’t possibly be shown to reduce poverty when our measurement of poverty completely ignores them.

Using an appropriate measure of poverty is not only important for determining the success of poverty reduction programs, but it also presents a more accurate picture of groups that are truly in need. Sara Manzano-Diaz, Director of the Women’s Bureau of the U.S. Department of Labor, explained that the SPM would increase the proportion of single mothers and the elderly who are considered to be in poverty which could help increase the pressure to insure these vulnerable groups receive necessary aid.

The event on childhood poverty looked for lessons the U.S. can learn from the U.K, which was able to cut childhood poverty in half in just one decade. Jane Waldfogel, of Columbia University and the London School of Economics, pointed out the U.K.’s rapid reduction of poverty demonstrates to U.S. policymakers that poverty does not have to be intractable if there is a national commitment to its reduction.

Interestingly enough, the UK achieved poverty reduction by using U.S. policies as models.  Waldfogel explained that the UK's interventions were more effective because, while similar, their policies were more generous, retaining carrots while eliminating sticks. The UK's willingness to offer more generous benfits than the U.S. as they had different goals for the programs. The U.S. implemented policy reforms to decrease welfare dependence, while the UK's main concern was to reduce childhood poverty.

Many efforts are currently being made to reduce poverty at the state level across the U.S. However, Paul Gregg, of Bristol University in England, suggests that perhaps the most important factor in the UK’s success was the national government’s involvement in promoting poverty reduction. Perhaps we can take the day's first event as a sign that the U.S. national attention is shifting. There were signs of this refocusing when Congressman McDermott suggested that we reach beyond President Obama’s goal to end childhood hunger by 2015 and to end childhood poverty by 2021, because "the wealthiest country in the world should be satisfied with nothing less."

*Carrie Wolfson is a Research and Programs Intern with the National Council for Research on Women. She currently attends NYU Wagner where she is President of the Wagner Women's Caucus.

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