New poverty measure shows public policies make a difference

One in six Americans lived in poverty in 2012. That’s according to the Supplemental Poverty Measure (SPM) released by the U.S. Census Bureau, a more comprehensive way to measure poverty than the official poverty measure.

The new report demonstrates that public policies make a difference in lifting people out of poverty. It found that without supports like Social Security, refundable tax credits and the Supplemental Nutrition Assistance Program (SNAP), many more people would live in poverty.

On the other hand, because many lack access to affordable and comprehensive health insurance, medical out-of-pocket expenses were most responsible for increasing poverty – accounting for this expense pushed the supplemental poverty rate from 12.6 percent to 16.0 percent in 2012.

The value of public programs in reducing poverty is evident in Minnesota, where the Supplemental Poverty Measure is significantly lower than the official poverty measure (9.7 percent vs. 10.4 percent). Nationally renowned supports like Minnesota’s Working Family Credit and MinnesotaCare help many families move up the income ladder.

The official poverty measure, originally developed in the early 1960s, is often criticized for being overly simplistic and outdated because it is only based on the cost of food and cash income. The SPM takes a more sophisticated look at poverty, taking into account expenses like child care, medical bills and taxes; as well as other resources, like housing subsidies, heating assistance and food support. The SPM gives us a more complete picture of who is unable to meet basic needs. This year shows us that more Americans are living in poverty than shown by the official poverty measure.

Minnesota policymakers can continue to improve the well-being of Minnesotans by strengthening refundable tax credits like the Working Family Credit and property tax refunds, protecting SNAP from federal cuts and continuing to improve access to affordable health care.

-Caitlin Biegler

About Caitlin Biegler

Caitlin Biegler is the Minnesota Budget Project’s policy analyst. She researches and writes about state tax and budget issues. Caitlin holds a Master of Public Policy degree from George Washington University in Washington, DC; and a Bachelor of Science degree in Public Health from Tulane University in New Orleans, LA. She interned at the DC Fiscal Policy Institute in Washington, DC, Third Way in Washington, DC, Lutheran Social Services, and the Alabama State Office of Primary Care and Rural Health.
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