Happy belated Poverty in the United States report release day to all who celebrate! Here at Scioto Analysis, understanding the current state of poverty is central to our mission, so we are always paying attention when the Census releases the most up to date data on one of America’s thorniest challenges.
Each year, this report lays out all the current information we have about both the Official Poverty Measure and the Supplemental Poverty Measure. This gives us the ability to look at both measures side-by-side and see how their differences impact the way we see the data.
As a really quick reminder, the Official Poverty Measure just looks at household income and compares it to a fixed line depending on the number of people in the household. This means that a 4-person household in Jackson Mississippi has the same poverty line as a 4-person household in San Francisco.
On the other hand, the Supplemental Poverty Measure makes adjustments for differences in cost of living across the country, and it also takes into consideration any non-wage income that a household might benefit from, such as SNAP benefits.
In general, the Supplemental Poverty Measure is higher than the Official Poverty Measure across the country. Overall, the Supplemental Poverty rate is 12.9% compared to 10.6%. When we look at sub-groups, we see that this trend is fairly consistent.
In the report’s Figure 7, all of the different poverty rates are laid out for each demographic group identified in the data. Some of these groups stand out as having significantly different Supplemental Poverty rates compared to their Official Poverty rates.
Cohabitating partners
The biggest difference by far between Supplemental and Official Poverty belongs to cohabitating partners. Cohabitating partners have a Supplemental Poverty rate that is nine percentage points lower than their official poverty rate. The main reason for this is that cohabitating partners count as being part of the same resource group in the Supplemental Poverty Measure, but not the Official Poverty Measure.
When people live together, there are economies of scale in terms of the resources those people need. We see this reflected in the Official Poverty thresholds, where the income required for an individual is $15,650, while the income required for a family of two is $20,440. If two people required exactly twice as many resources, then their poverty line should be $31,300, which is much closer to the poverty line for a family of four.
Children
The only other group whose Supplemental Poverty rate is lower than their Official Poverty rate is people under 18 years old. The difference here is quite small, only 0.9 percentage points, but this is notable given that all other groups have a Supplemental Poverty rate is higher than the Official Poverty rate.
I suspect the main reason that children have a lower Supplemental Poverty rate is due in large part to the special benefits families with children are eligible to receive. Policies like Child Tax Credits or the Earned Income Tax Credit provide key of supplemental income to families that do not get counted by the Official Poverty Measure.
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This poverty data release has a ton of amazing information in it. There is so much for policymakers and analysts to pick up and comb through. This kind of high quality public data is critical for better understanding the world around us and helping us make better decisions that might lessen the burden of poverty for everyone.