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What Is the Supplemental Poverty Measure and How Does It Differ From the Official Measure?

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Since publication of the first official U.S. poverty statistics, there has been a continuing debate about the best way to measure income and poverty in the United States.

In 2010, an interagency technical working group asked the U.S. Census Bureau and the U.S. Bureau of Labor Statistics to develop a new measure that would improve our understanding of the economic well-being of American families and enhance our ability to measure the effect of federal policies on those living in poverty. The technical design of the Supplemental Poverty Measure (SPM) draws on the recommendations of a 1995 National Academy of Sciences report and extensive research on poverty measurement conducted over the past 20 years. (See the history of poverty measures in the United States infographic.)

On Sept. 15, the Census Bureau will release its 10th report on the SPM, containing 2019 estimates. The report presents estimates of the official and supplemental poverty measures and discusses differences between the two measures. For a detailed comparison of major concepts, see the table below and this infographic.

We measure poverty two ways every year. The official poverty measure is based on cash resources. The SPM includes both cash resources and noncash benefits and subtracts necessary expenses (such as taxes and medical expenses).

Poverty Measure Concepts: Official and Supplemental

 

Official Poverty Measure

Supplemental Poverty Measure

Measurement Units

Families (individuals related by birth, marriage or adoption) or unrelated individuals

Resource units (official family definition plus any co-resident unrelated children, foster children, and unmarried partners and their relatives)  or unrelated  individuals (not otherwise included in the family definition)

Poverty Threshold

Three times the cost of a minimum food diet in 1963

Based on expenditures of food, clothing, shelter and utilities (FCSU)

Threshold Adjustments

Vary by family size, composition and age of householder

Vary by family size, composition and tenure, with geographic adjustments for differences in housing costs

Updating  Thresholds

Consumer Price Index for All Urban Consumers: all items

Five-year moving average of expenditures on FCSU

Resource Measure

Gross before-tax cash income

Sum of cash income, plus noncash benefits that resource units can use to meet their FCSU needs, minus taxes (or plus tax credits), minus work expenses, medical expenses, and child support paid to another household


The official poverty measure compares an individual’s or family’s pretax cash income to a set of thresholds that vary by the size of the family and the ages of family members. These official poverty calculations do not take into account the value of in-kind benefits, such as those provided by nutrition assistance or housing and energy programs. Nor do they take into account regional differences in living costs or expenses, such as housing.

The SPM takes into account family resources and expenses not included in the official measure as well as geographic variation. First, it adds the value of in-kind benefits that are available to buy basic goods to cash income. In-kind benefits include nutritional assistance, subsidized housing and home energy assistance. Then it subtracts necessary expenses for critical goods and services not included in the thresholds from resources. Necessary expenses that are subtracted include income taxes, Social Security payroll taxes, child care and other work-related expenses, child support payments to another household, and contributions toward the cost of medical care and health insurance premiums.

Thresholds used in the SPM are produced by the Bureau of Labor Statistics Division of Price and Index Number Research using Consumer Expenditure Survey data that show how much people spend on basic necessities (food, clothing, shelter and utilities), and are adjusted for geographic differences in the cost of housing. The SPM thresholds are not intended to assess eligibility for government assistance.

Next week’s report will compare 2018 SPM estimates to 2019 SPM estimates for numerous demographic groups. It will also provide state-level supplemental poverty statistics using three years of Current Population Survey Annual Social and Economic Supplement data and compare official poverty estimates to SPM estimates. In addition, the report will examine the effect on supplemental poverty rates of excluding specific resource or expenditure elements, such as noncash benefits, tax credits and medical expenses.

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