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April 27, 2010
5:47 PM


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 - April 27 - 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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