2011 Supplemental Poverty Measure Thresholds Based on Consumer Expenditure Survey Data
On September 25, 2012, the U.S. Bureau of Labor Statistics (BLS) released Supplemental Poverty Measure (SPM)
thresholds for 2011 that are based on Consumer Expenditure Survey data. The U.S. Census Bureau will release poverty
statistics based on these SPM thresholds on November 14, 2012.1
The SPM thresholds are produced as part of a joint research project of the BLS and the U.S. Census Bureau.
The SPM is not intended to replace the official poverty measure, but rather to provide other perspectives for
examining poverty, and is expected to be improved over time.
The official poverty measure was developed in the early 1960s and adopted as "official" in 1969.
The official poverty threshold was first determined to be the dollar value of a minimum adequate diet times three.
The multiplier of three was used because 1955 Food Consumption Survey data showed that food expenditures accounted
for one-third of after-tax income for the average family with children. An annual threshold of
about $3,100 for a family with two adults and two children was set for 1963 as the standard of needs and has
been fixed in inflation-adjusted terms since then. The 2011 official poverty threshold for a
family of two adults and two children is $22,811.
Official poverty thresholds, which account for differences in the number of adults and children in families,
are updated annually to reflect changes in prices only. The U.S. Census Bureau is
responsible for publishing official annual poverty thresholds, rates, and other statistics.
The most recent official poverty statistics
were released by the U.S. Census Bureau on September 12, 2012.
In response to concerns about the adequacy of the current official measure, a National Academy of Sciences (NAS)
panel convened from 1992 to 1995 to evaluate the official poverty measure and recommend a new one.
The panel published a report of their findings and recommendations in 1995: Measuring Poverty,
A New Approach.
Shortly thereafter, BLS and U.S. Census Bureau researchers began working with the NAS recommendations.2
In 2010, an Interagency Working Group on Developing a Supplemental Poverty Measure released guidelines for
a supplemental poverty measure (PDF).
The working group based their guidelines on the NAS recommendations and research conducted since
the NAS report was released. One of the NAS panel recommendations was that thresholds would be
based solely on expenditures and derived from Consumer Expenditure Survey data. The working group
adopted this recommendation; they acknowledged that the BLS had produced the NAS thresholds
in the past and expected the BLS would continue to play this role for the SPM. Introduced with the
SPM is a guideline that thresholds should be adjusted to account for housing status,
distinguishing owners with mortgages, owners without mortgages, and renters.
SPM thresholds are derived from the sum of expenditures for food, clothing, shelter, utilities, and a
"little bit more." This last group includes other basic goods and services, such as
those for household supplies, personal care, and nonwork-related transportation.
The SPM thresholds are based on expenditures of consumer units with two children.
Adjustments are made to convert these expenditures to represent consumer units that include exactly
two adults and two children.
Annual SPM thresholds are based on 5 years of quarterly Consumer Expenditure Survey data.
The quarterly expenditure levels are adjusted to the most recent year’s purchasing power of dollars
using the Consumer Price Index for All Urban Consumers (CPI-U).
By using the most recent expenditure data, thresholds reflect changes in the standard of living.
BLS provides the thresholds to the U.S. Census Bureau, where they are adjusted to reflect
the spending needs of other family types and geographic differences in prices.
The Census Bureau uses the adjusted thresholds to produce SPM poverty rates and related statistics.
As seen in the chart below, the 2011 SPM thresholds are $25,703 for owners with mortgages, $25,222
for renters, and $21,175 for owners without mortgages. Also presented is the 2011 official poverty
threshold for comparison. SPM thresholds for 2005 through 2011, along with details regarding
the derivation of the housing tenure-specific thresholds, are available at http://www.bls.gov/pir/spmhome.htm.
Last Modified Date: September 25, 2012