Current Standard Fails to Accurately Assess Poverty and Basic Economic Security

For Immediate Release

Contact: 

Alan Barber, (202) 293-5380 x115

Current Standard Fails to Accurately Assess Poverty and Basic Economic Security

Administration's Proposed "Supplemental" Measure Makes Improvements But Remains Too Limited

WASHINGTON - A new study released today from the Center for Economic and Policy
Research (CEPR) proposes a new framework for measuring poverty and basic
economic security in the United States.

"The official poverty measure has
defined deprivation down over the last four decades, moving it further
and further away from mainstream living standards over time," said Shawn
Fremstad author of the study and Director of the Bridging the Gaps
program at CEPR. "The supplemental income poverty measure proposed by
the Obama administration makes some improvements, but doesn't do enough
to modernize the measure."

 
The report, "A Modern Framework for Measuring Poverty and Basic
Economic Security
," recommends a new approach that utilizes measures
of both low income and economic hardship related to low income. The
core of this approach would be two measures that, taken together,
accurately and succinctly measure poverty and basic economic security.

For years, polls have shown that the
average American's idea of the minimum amount it takes to get by has
grown at a faster rate than the current poverty line, which is only
adjusted for inflation. Various other measures, including basic family
budgets, have found that an amount equal to roughly twice the poverty is
needed for a modest, but adequate living standard.

The report's recommendations include:

  • A core "low-income" measure that
    is equal to roughly 50 percent of median income
  • A measure of
    "low-income-plus-deprivation" that would combine various indicator of
    economic deprivation, including hunger and food insecurity, substandard
    housing, and lack of affordable and adequate health care, into a single
    measure
  • Restoration of the Family
    Budgets Program at the Department of Labor
  • Accurately labeling the Obama
    administration's Supplemental Income and Poverty Measure (SIPM) as a
    measure of "extremely low income"
  • A public consultation process
    that would give the public an opportunity to provide input on the
    development of the SIPM and other proposed measures
###

The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.

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