Current Standard Fails to Accurately Assess Poverty

Print
April 27, 2010

New framework would better reflect decent living standards and economic security needs in the US

For Immediate Release:April 27, 2010
Contact: Alan Barber, (202) 293-5380 x115

Washington, D.C. - A new study released today from the Center for Economic and Policy Research (CEPR) proposes a new framework for measuring poverty and basic economic security in the United States.

“For years, the minimum amount needed by the typical family to ‘get along’ at a basic level has grown larger and larger compared to the current official poverty measure,” said Shawn Fremstad author of the study and Director of the Bridging the Gaps program at CEPR. “It is imperative that Congress act to adopt a balanced approach that accurately and succinctly measures poverty in America.”

The report, “A Modern Framework for measuring poverty and basic Economic Security,” details how the dominant framework for defining poverty has been defined down over time, analyzes the Obama administration’s Proposed improvements to the current poverty measures, and then recommends a new framework more reflective of contemporary mainstream living standards.

For years, polls have shown that the average American’s idea of what it takes to get by and make ends meet has grown considerably. Meanwhile, the current standard, conceptualizing poverty solely in terms of an extremely low level of income and tied to inflation, has become more conservative, with a poverty threshold that is too low and too narrow.

In the study, Fremstad suggests five recommendations for a standard that would more accurate describe poverty in the United States:
  • A new national statistical framework for measuring poverty and economic security
  • Restoration of the Family budgets Program at the department of Labor
  • Adjustments for geographic differences in living standards
  • Accurately labeling the Obama administration’s Supplemental Income and Poverty Measure (SIPM) as a measure of extremely low income
  • A public consultation process that would give the public an opportunity to provide input on the development of the SIPM and other proposed measures

###