Sometimes getting it half right means that you got it all wrong. Such is the case with the New York Times' coverage of the Census' Supplemental Poverty Measure (SPM).
In "Bleak Portrait of Poverty Is Off the Mark, Experts Say" the Times reports that, on Monday, the Census Bureau will unveil the SPM, a more accurate measure that actually accounts for the impact of social safety net program on relieving poverty. Previously, poverty was measured by calculating a family's gross income and then comparing that to the federal poverty threshold. Those families that fell below the threshold were poor. The SPM tells a more complicated story. It still calculates gross income, but then it adds the value of all in-kind transfers. So a family of four which was below the 2010 federal poverty line, $22,113, because they earned only $20,000 may actually have be above the poverty line once you count their housing and heating assistance, whether they participate in the federal food assistance program, and other welfare programs.
This part of the story the Times got right. Then, they took a wrong turn. According to their analysis, the Census will report a SPM poverty rate of 13.4 percent on Monday. That's 1.7 points lower than the estimate given by the traditional measure in September, and means that roughly 5 million Americans should not be counted as poor. It would also mean that the poverty rate has declined since 2009. Using the SPM (see slide 19), the Census Bureau estimated that the 2009 poverty rate was 15.3 percent.
If only it were so.
But the Times has forgotten one crucial part of the story. The SPM doesn't only improve the traditional measure by counting in-kind transfers, it also addresses the most persistent criticism of the poverty measure: adjusting the poverty threshold.
For years, advocates have said that the poverty threshold, which was estimated by multiplying the cost of a balanced budget by three (food once cost American families one-third of their income), underestimates poverty. Hence, why so many develop policies according to 150 percent of the current threshold. Even the Department of Agriculture determines eligibility for food stamps using 130 percent of the poverty threshold. Under the SPM, a family consisting of two parents and two children would have needed to earn less than $23,854 in 2009 to be poor (see slide 11). That is a $2,098, roughly 1 percent, increase over the 2009 federal poverty threshold.
Missing the change in thresholds is why the Times analysis of Charlotte, North Carolina, resident Angelique Melton is wrong. According to the Times, Ms. Melton has two children. Under the traditional measure, she would only be poor if she made less than $17,285 (the Times place the threshold at $17,400). The Times then observes that if you add up all of Ms. Melton's in-kind transfers -- food stamps, nutritional supplements, housing and tax credits -- her annual income was $18,800. Thus, they claim, she would not be considered poor by the new measure.
But they failed to re-calculate the SPM's new threshold, which by my measure was roughly $18,944 for a one parent-two child household in 2009. Thus, even with all the transfers, Ms. Melton was still poor. She was just less poor.
Missing this crucial factor calls the Times' other findings into question as well. For example, the growth in families between 100 and 150 percent of the poverty line may be more than just growth in low-income families. It may constitute the growth in poverty, explaining why the 2009 SPM poverty rate registered at 15.3 percent, .8 percent higher than the 2009 rate and .2 percent higher than the current official estimates.
The Times did occasionally hit the mark. Ms. Melton's case suggests both that deep poverty is indeed alleviated by our safety net programs, and that children benefit immensely from this support. Their other case study, Mr. Springs, an elderly man whose gross income is above the poverty line, rightly draws attention to the fact that rising healthcare costs may usher in a new age of elderly poverty in America.
Overall, however, we'd have to say that this story does more harm than good. The intention to demonstrate that our social safety net is, in some cases working, is noble. But it shouldn't come at the expense of obscuring a real crisis. Poverty in America is growing. On Monday, the SPM will show us by how much.