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America's Children in Brief: Key National Indicators of Well-Being, 2016

Supplemental Poverty Measure

Since the publication of the first official poverty estimates in 1964, there has been continuing debate about the best approach to measuring poverty in the United States. Recognizing that alternative estimates of poverty can provide useful information to the public as well as to the Federal Government, the U.S. Census Bureau publishes alternative poverty estimates using the new supplemental poverty measure (SPM). The SPM does not replace the official poverty measure but serves as an additional indicator of economic well-being and provides a deeper understanding of economic conditions and policy effects. The SPM is based on the suggestions of an interagency technical working group.17, 18

In contrast to the official poverty measure, which compares pre-tax cash income to a set of thresholds derived in the early 1960s, the SPM creates a more complex statistical picture by incorporating additional items such as tax payments, work expenses, medical out-of-pocket expenditures, and the value of noncash nutritional, energy, and housing assistance. Thresholds used in the new measure were derived by staff at the U.S. Bureau of Labor Statistics from Consumer Expenditure Survey expenditure data on basic necessities (food, shelter, clothing, and utilities) and are adjusted for geographic differences in the cost of housing.

Figure 6: Percentage of children ages 0–17 living in poverty by race and Hispanic origin and type of poverty measure, 2014
Percentage of children ages 0–17 living in poverty by race and Hispanic origin and type of poverty measure, 2014

NOTE: These data refer to the civilian noninstitutionalized population. The abbreviation NH refers to non-Hispanic.

SOURCE: U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement.

  • For all children, the 2014 SPM rate was 17 percent, 4 percentage points lower than the official poverty rate of 21 percent.
  • In 2014, the SPM rate was lower than the official poverty rate for White, non-Hispanic; Black, non-Hispanic; and Hispanic children.19 The difference between the two poverty rates for Asian, non-Hispanic children was not statistically significant.
  • While the official poverty rate was higher for Black, non-Hispanic children than for Hispanic children in 2014, the difference between the SPM rates for these two groups was not statistically significant.
  • The SPM rate was higher for Asian, non-Hispanic children than for White, non-Hispanic children in 2014. The difference in official poverty rates between these two groups was not statistically significant, however.

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17 Interagency Technical Working Group. (2010, March). Observations from the Interagency Technical Working Group on developing a Supplemental Poverty Measure. Retrieved from http://www.census.gov/hhes/www/poverty/SPM_TWGObservations.pdf

18 For the latest report, see Short, K. (2015, September). The Supplemental Poverty Measure: 2014 (Current Population Report P60–254). Retrieved from http://www.census.gov/content/dam/Census/library/publications/2015/demo/p60-254.pdf

19 Federal surveys now give respondents the option of reporting more than one race. Therefore, two basic ways of defining a race group are possible. A group such as Black may be defined as those who reported Black and no other race (the race-alone or single-race concept) or as those who reported Black regardless of whether they also reported another race (the race-alone-or-in-combination concept). This indicator shows data using the first approach (race alone). Use of the single-race population does not imply that it is the preferred method of presenting or analyzing data. The U.S. Census Bureau uses a variety of approaches. Data on race and Hispanic origin are collected separately. People of Hispanic origin may be of any race.