Alternative Poverty Measurement for the U.S.: Focus on Supplemental Poverty Measure Thresholds

Thesia I. Garner and Marisa Gudrais

Abstract

Guidelines to produce a new supplementary poverty measure for the U.S. were released to the public in early 2010 and were presented as Observations from the Interagency Technical Working Group on Developing a Supplemental Poverty Measure (SPM). Since that time, research has been ongoing in the Bureau of Labor Statistics (BLS) and Census Bureau to produce and improve upon the initial measure. SPM statistics, released by the U.S. Census Bureau since 2011, are based on resources that account for federal in-kind (noncash) benefits for food, rent, and utilities. However, the SPM thresholds to which these resources are compared are primarily based on out-of-pocket spending on food, clothing, shelter, and utilities (FCSU). A guideline in the 2010 document was that thresholds and resources would be defined consistently. By accounting for in-kind benefits in thresholds, a consistent SPM results. Census Bureau Current Population Survey Annual Social and Economic Supplement data are the basis of SPM resources while the BLS Consumer Expenditure Survey Interview data are the basis of the thresholds. This research has two goals: (1) to describe the methods currently used to produce the SPM thresholds, showing thresholds for 2005-2015; and (2) to present ongoing research designed to improve SPM thresholds by including the value of in-kind benefits along with FCSU expenditures. These latter thresholds are produced for 2014 only. In-kind benefit based SPM thresholds are statistically higher than SPM thresholds that are based on expenditures only for all three housing tenure groups: owners with mortgages, renters, and owners without mortgages.