NYT Misleads on Poverty Trends
|Written by Shawn Fremstad|
|Friday, 04 November 2011 09:45|
In a post yesterday, I wrote that the new poverty measure proposed by the Obama Administration—known as the Supplemental Poverty Measure (SPM)—likely increases the poverty rate by a modest amount compared with the official rate (less than 1 percent), while producing lower poverty rates in most (34) states. A story in today's New York Times by Jason DeParle and Sabrina Tavernise goes considerably further, saying that the "bleak portrait of poverty" painted by official poverty statistics "missed the mark" with the implication being that poverty is "less bleak" than official statistics suggest.
Oddly missing from the article is any clear mention of the fact that the Supplemental Poverty Measure actually paints a modestly "bleaker" portrait of poverty in 2009, a fact confirmed by Census officials in a media webinar this morning. In fact, as the table below shows, some 2.4 million more people lived in poverty in 2009 than under the official measure.
The article's implication that poverty is less bleak is based on the NYT's analysis of alternative poverty measures that show that "as much as half of the reported rise in poverty since 2006 disappears" But here, again, the NYT isn't telling the whole story.
The NYT analysis is based on a Census table that compares the official poverty with eight alternative poverty rates from 1999-2009. Four of these measures uses poverty thresholds that are mostly consistent with the Obama measure and the National Academy of Sciences; the other four use thresholds that are not consistent with the Obama measure or the NAS in a fundamental way that affects how they change over time. Unlike the four consistent measures, the four non-consistent measures do not adjust the poverty thresholds for changes in consumer spending on housing and certain other basic needs expenditures as the NAS recommendations and the Obama measure do. The table below shows the differences in both the consistent and non-consistent measures between 2006 and 2009.
As you can see, the four measures most consistent with the proposed Obama measure all show increases that are equal to or higher than the increase in the official rate.
I'm not a fan of the Obama measure, largely because it, like the current poverty measure ($22,113 for a family of two adults and two children in 2010), sets the poverty line at a level that is far too low compared with mainstream incomes. When established in the early 1960s, the poverty line was equal to nearly 50 percent of median income. Because it has only been adjusted for inflation since then, and not for increases in mainstream living standards, the poverty line has fallen to just under 30 percent of median income. As a result, to be counted as officially “poor,” you have to be much poorer today, compared with a typical family, than you would have in the 1960s. Unforunately, this fact gets no mention in the NYT story, and there is acknowledgement of the reasonable view that both the FPL and SPM are too low as measures of basic income adequacy.
A better standard and one that is commonly used in other counties is half of median income. As even Census has noted, some 22.1 percent of Americans fell below this very-low income standard in 2010, compared with the official rate of 14.3 percent. Similarly, both public opinion research conducted by Gallup and other pollsters, and basic budget analyses conducted by the Department of Commerce and various non-governmental research organizations, suggest that the minimum amount needed to “make ends meet” at a basic level is around $45,000 to $50,000 for a family of four. While the Census report does not report data for such a standard, it does provide data on the number of people with incomes below 200 percent of the federal poverty line, which is a roughly equivalent income level. These figures show that just over one out of every three Americans (33.9 percent; almost 104 million people) in 2010 had income below 200 percent of the poverty line, and that the percentage of such people increased by .9 percentage points between 2009 and 2010, and by 4.6 percentage points since its lowest recorded level (29.3 percent) in 2000.
On the bright side, today's NYT story made included no mention of "poverty rolls."
Update (11/15/11): In a Economix entry posted later on the day of the NYT story, the authors of the story cite my post and acknowledge that "the Supplemental Poverty Measure ... uses the Consumer Expenditure Survey [to adjust poverty threshholds] and there differs from the method we used." To justify their use of an alternative measure that differs from the SPM they argue that:
I have no doubt that the NYT authors acted in good faith, but they made the wrong decision here (as did Census if they told the authors that the Consumer Expenditure Survey-adjusted numbers could not be used to gauge the effect of safety net spending on poverty over the last several years). The explanation of this is technical and long-winded, but worth putting down here for the record.