For Immediate Release: November 07, 2011
Alternative Poverty Measure Demonstrates Government Programs Help Reduce Poverty
The Supplemental Poverty Measure released today by the Census reveals government has a key role to play in reducing poverty, CLASP, the Center for Law and Social Policy said today.
"While the SPM shows an overall increase in poverty, there's a much bigger story," said Alan W. Houseman, executive director of CLASP. "The increase in poverty based on the SPM would have been much more substantial without poverty alleviating programs such as the Earned Income Tax Credit, SNAP and housing subsidies. This is no small feat. The SPM demonstrates government programs work and public policy has a critical role to play in helping to reduce poverty. As lawmakers debate deficit reduction and cutting domestic programs, they should keep this report in mind. It would be counterproductive to slash poverty-alleviating programs at any time but especially now when need is increasing."
The official poverty measure is based on an antiquated 1960s-era formula that does not take into account modern living expenses such as transportation costs, medical expenses and child care costs. It reflects a poverty rate of 15.1 percent or 46.6 million people. The SPM calculates poverty based on these expenses but also considers tax benefits such as the Earned Income Tax Credit as well as in-kind benefits such as Supplemental Nutrition Assistance Program (SNAP or food stamps), housing subsidies, school lunch and energy assistance. By this measure, poverty increased to 16 percent or 49.1 million. According to Census, the SPM would have been 2 percent higher without EITC and in-kind benefits. The supplemental measure is not technically perfect, but it is a step forward in more accurately examining family ecomomic well-being.