January 25, 2011 : Zehra Siddiqui
The Economist reports on the Census Bureau's recent publishing of an estimate of poverty in the US using a new definition.
The old threshold of poverty took the cost of food for a household and multiplied it by 3. However food no longer makes a significant portion of an American household's spending; In 2009 food made up only 7.8% of an Americans household's expenses.
The new measurement called the "supplemental poverty measure" (SPM) more accurately reflects the ability to meet basic needs by taking into account the cost of food, clothing, shelter, utilities and an additional 20% for other expenses. Furthermore the SPM also is adjusted for cost of living in different regions, government assistance and for home ownership.
The SPM states that 15.7% of American live in poverty up from the official rate of 14.5%. Comparing SPM to the official numbers, those living in extreme poverty fell due to the inclusion of government support within the poverty calculation. In addition, the poverty rate in rural areas fell while it rose in urban and suburban ones. The poverty rate for the elderly rose from 9.9% to 16.1% under the SPM, partly due to their high medical expenses. Unfortunately the SPM will not be replacing the official one. Furthermore, the official poverty threshold will still be used to determine eligibility for government assistance.
http://teachingwithdata.blogspot.com/2011/01/redefining-poverty.html
The Economist reports on the Census Bureau's recent publishing of an estimate of poverty in the US using a new definition.
The old threshold of poverty took the cost of food for a household and multiplied it by 3. However food no longer makes a significant portion of an American household's spending; In 2009 food made up only 7.8% of an Americans household's expenses.
The new measurement called the "supplemental poverty measure" (SPM) more accurately reflects the ability to meet basic needs by taking into account the cost of food, clothing, shelter, utilities and an additional 20% for other expenses. Furthermore the SPM also is adjusted for cost of living in different regions, government assistance and for home ownership.
The SPM states that 15.7% of American live in poverty up from the official rate of 14.5%. Comparing SPM to the official numbers, those living in extreme poverty fell due to the inclusion of government support within the poverty calculation. In addition, the poverty rate in rural areas fell while it rose in urban and suburban ones. The poverty rate for the elderly rose from 9.9% to 16.1% under the SPM, partly due to their high medical expenses. Unfortunately the SPM will not be replacing the official one. Furthermore, the official poverty threshold will still be used to determine eligibility for government assistance.
http://teachingwithdata.blogspot.com/2011/01/redefining-poverty.html
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