US Poverty Measure Fails to Meet Government Standards of Reliability, Accuracy, Timeliness, and Objectivity

In response to release of income and poverty data today by the US Census Bureau, CEPR Senior Policy Fellow Shawn Fremstad issued the following statement:

"The Census Bureau's statement that only 10.5 percent of Americans were poor in 2020 is an utterly unreliable and inaccurate claim that does not provide a sound efficient basis for decisions and actions by governments, businesses, households, and other organizations.

"Federal statistical policy requires: "[s]tatistics produced by the Federal Government .... [to] meet high standards of reliability, accuracy, timeliness, and objectivity in order to provide a sound efficient basis for decisions and actions by governments, businesses, households, and other organizations." According to a report released today by the U.S. Census Bureau seemingly in accordance with these principles: "[t]he 2019 poverty rate of 10.5 percent is the lowest rate observed since estimates were initially published in 1959."

"There are many reasons why the Census Bureau's statement is utterly unreliable and inaccurate, but here are the two most important ones. The poverty line used by the Census Bureau to produce this figure is 1) much lower than the amount of income most Americans say is needed to not be poor in today's America; and, 2) much lower than any reasonable expert estimate of the goods and services it takes to not be poor today.

"An upcoming joint report with the Century Foundation will go into much more detail on why the Census Bureau's statement is unreliable and inaccurate, but this post will highlight a somewhat different question: how did we get to the point that the Census Bureau is publishing unreliable and inaccurate poverty data that will be widely viewed as credible simply because it is being published by the Census Bureau?

"The short answer is that liberal anti-poverty "experts"--mostly in think tanks and academia--and Democratic politicians bear much of the blame. Liberal experts bear much of the blame because they failed to push the Obama administration, in a public or organized way, to discontinue the use of the archaic Official Poverty Measure as a statistical measure of poverty. Instead, they opted to publicly frame the meaning of the term "poverty" as a technical question, rather than a public one. Moreover, liberal experts put all of their eggs in the basket of the Supplemental Poverty Measure--supplemental because it supplements, rather than replaces, the Official Poverty Measure--based on recommendations made by an expert panel of academics in the early 1990s, and under seemingly interminable research and development over the last quarter century. Finally, these same experts rejected the idea of adopting a conventional "relative" poverty measure for use as one of a set of statistical measures of poverty, even though it's the mainstream standard in the rest of the OECD.

"As for the Obama administration, it failed to discontinue the statistical use of the archaic official poverty measure, and there is really no excuse for this. So here we are, in September 2020, two months before a presidential election in which one of the candidates will be able to credibly claim that only about one-in-ten Americans are poor, the lowest ever on record."In response to release of income and poverty data today by the US Census Bureau, CEPR Senior Policy Fellow Shawn Fremstad issued the following statement:

The Census Bureau's statement that only 10.5 percent of Americans were poor in 2020 is an utterly unreliable and inaccurate claim that does not provide a sound efficient basis for decisions and actions by governments, businesses, households, and other organizations.

Federal statistical policy requires: "[s]tatistics produced by the Federal Government .... [to] meet high standards of reliability, accuracy, timeliness, and objectivity in order to provide a sound efficient basis for decisions and actions by governments, businesses, households, and other organizations." According to a report released today by the U.S. Census Bureau seemingly in accordance with these principles: "[t]he 2019 poverty rate of 10.5 percent is the lowest rate observed since estimates were initially published in 1959."

There are many reasons why the Census Bureau's statement is utterly unreliable and inaccurate, but here are the two most important ones. The poverty line used by the Census Bureau to produce this figure is 1) much lower than the amount of income most Americans say is needed to not be poor in today's America; and, 2) much lower than any reasonable expert estimate of the goods and services it takes to not be poor today.

An upcoming joint report with the Century Foundation will go into much more detail on why the Census Bureau's statement is unreliable and inaccurate, but this post will highlight a somewhat different question: how did we get to the point that the Census Bureau is publishing unreliable and inaccurate poverty data that will be widely viewed as credible simply because it is being published by the Census Bureau?

The short answer is that liberal anti-poverty "experts"--mostly in think tanks and academia--and Democratic politicians bear much of the blame. Liberal experts bear much of the blame because they failed to push the Obama administration, in a public or organized way, to discontinue the use of the archaic Official Poverty Measure as a statistical measure of poverty. Instead, they opted to publicly frame the meaning of the term "poverty" as a technical question, rather than a public one. Moreover, liberal experts put all of their eggs in the basket of the Supplemental Poverty Measure--supplemental because it supplements, rather than replaces, the Official Poverty Measure--based on recommendations made by an expert panel of academics in the early 1990s, and under seemingly interminable research and development over the last quarter century. Finally, these same experts rejected the idea of adopting a conventional "relative" poverty measure for use as one of a set of statistical measures of poverty, even though it's the mainstream standard in the rest of the OECD.

As for the Obama administration, it failed to discontinue the statistical use of the archaic official poverty measure, and there is really no excuse for this. So here we are, in September 2020, two months before a presidential election in which one of the candidates will be able to credibly claim that only about one-in-ten Americans are poor, the lowest ever on record.