The new report marked the culmination of a years-long effort by the Census Bureau to come up with a poverty measure that takes into account the huge amounts of money in social services benefits provided to the needy, as well as their expenses for things such as medical care and payroll taxes.
The increased level of poverty revealed by the supplemental measure is at odds with what some poverty experts expected. The increased level of poverty was fueled by the sharply higher levels of poverty among senior citizens found by the alternative measure.
“The elderly just overwhelm it,” said Ron Haskins, a senior fellow at the Brookings Institution.
The poverty rate for those 65 and older was 15.9 percent based on the supplemental measure, much higher than the 9 percent rate for the elderly when using the official poverty yardstick.
The biggest factor increasing the poverty rate for seniors under the alternative measure was out-of-pocket medical expenses, which are not captured by the official poverty rate but are by the alternative measure. At the same time, neither the accumulated wealth of senior citizens nor their Medicare benefits are included in the official or supplemental measure, which some experts said skews the number of elderly who are counted as impoverished.
Among whites, 14.3 percent were found to be in poverty under the supplemental measure, more than a percentage point higher than the 13.1 percent poverty rate found by the official measure.
Hispanics had a poverty rate of 28.2 percent under the alternative measure, higher than the official poverty rate of 26.7 percent.
The proportion of black Americans living in poverty declined slightly under the alternative measure, from 27.5 percent under the traditional measure to 25.4 percent. Among children younger than 18, the poverty rate under the alternative measure was 18.2 percent, much lower than the official rate of 22.5 percent.
Although there are shortcomings, poverty experts say the supplemental measure offers a more comprehensive view of the nation’s poverty picture than the official measure.
Unlike the traditional method, it offers different poverty thresholds for renters, homeowners paying a mortgage and owners who have no mortgage. Overall, the new measure puts the poverty threshold at an annual income of $24,343 for a family of two adults and two children — higher than the $22,113 poverty threshold under the official measure.
The alternative measure also factors in the effects of payroll taxes and the cost of living in different parts of the country. In addition, it accounts for any government programs including the earned income tax credit, housing subsidies, food stamps and free school lunches.
“You could not look at our official poverty statistics and see any impact of government programs,” Haskins said.