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Does Poverty Measurement Tell Whole Story?

PHOTO: Modernizing the formula used to measure poverty in America can help mitigate child poverty and improve the effectiveness of government safety net programs, such as tax credits and social security, concludes a new report from the Annie E. Casey Foundation. Photo credit letsmove.org
PHOTO: Modernizing the formula used to measure poverty in America can help mitigate child poverty and improve the effectiveness of government safety net programs, such as tax credits and social security, concludes a new report from the Annie E. Casey Foundation. Photo credit letsmove.org
February 25, 2015

ALBUQUERQUE, N.M. - The formula the federal government uses to measure poverty in the U.S. is outdated and should be modernized to better reflect the true picture of poverty in America.

That's the finding of a new report from the Annie E. Casey Foundation. Christine Hollis, Kids County director with New Mexico Voices for Children, says the Federal Poverty Level guidelines, established in the 1960s, only consider the cost of food and none of the other major expenses of raising a family.

"The Federal Poverty Level doesn't take into account the basic costs of living in New Mexico; like housing, transportation, the cost of childcare, health care and all of those things that a family has to pay for in order to support their families," she says.

Hollis says the poverty guidelines also don't consider the cost-of-living differences that can change based on where a person lives.

The report from the Casey Foundation calls on the government to start using the Supplemental Poverty Measure developed by the U.S. Census Bureau in 2011.

Hollis says it measures the impact of the Earned Income Tax Credit (EITC), Supplemental Nutrition Assistance Program (SNAP), and other safety-net programs. She says without such programs, New Mexico's child poverty rate could double.

"If we did not have those programs operating in New Mexico, we would probably see another 102,000 children who would be considered in poverty," she says.

Hollis adds, using the Supplemental Poverty Measure can also help lawmakers develop a keener understanding of which safety net programs are working the best.

She says child poverty costs the U.S. an estimated $500 billion a year in lost productivity and earnings, as well as health and crime-related costs.

Troy Wilde, Public News Service - NM