The Census Bureau released poverty figures for 2020 today, and depending on how you look at things poverty was either up or down:
The "official" poverty measure, which no one likes, is based solely on wage income. Naturally, then, it went up last year since lots of people lost their jobs and their incomes went down.
But the Supplemental Poverty Measure, which takes into account government benefits, among other things, was down substantially. This makes sense since Congress allocated a vast amount of money to people, with a focus on the poor and the unemployed.
So which one is right? The SPM does a better job of estimating real-life resources available to families, and it's the one you should probably trust. This is, once again, evidence that social welfare programs do exactly what they're supposed to do. They make people better off.
So which one is right? The SPM does a better job of estimating real-life resources available to families, and it's the one you should probably trust.
Such things should always be measured post tax/transfer in my view.
It is odd that the SPM poverty level is usually higher than the wage level - this seems to imply that people at the median level on average receive more supplementary income than those at lower levels. If that is true then government programs are not usually reducing poverty, as defined,
The poverty rate is not an absolute measure of how well lower-income people are doing, it is a relative measure, or a measure of inequality. It is defined as the fraction of people whose income is below the poverty level, which is half the median income. Possibly there are differences in the definitions that make the two poverty levels not strictly comparable or some other explanation, but if not this could be a serious problem.
The Supplemental Poverty Measure includes a number of adjustments to the official poverty measure, including some which adjust the poverty threshold upward. Those changes can have the effect of erasing the benefit of government aid programs.
Evidently the definition I gave of the poverty level as half the median income is not the one used by the Census. Now I can't find where I got that definition.
It is still peculiar that the poverty level after adjustments is higher, and also that the difference between the two measures was so constant until last year. Haven't adjustments changed in the time of the graph?
This is, once again, evidence that social welfare programs do exactly what they're supposed to do. They make people better off.
Well we can't have THAT! After all, this is AMERICA, where being born into poverty means you clearly have moral failings and need to be forced to Pull Yourself Up By Your Own Bootstraps™.
We're significantly underestimating the rate of poverty in America, because a large chunk of the impoverished live in areas with higher costs (see: https://is.gd/Jp5PWR) than the average, and that the biggest drivers were Social Security followed by the 2020 stimulus spending (see: https://is.gd/uSMHU4).
The SPM - but also, the lower level is sure to be temporary as it's an artifact of temporary assistance.
CNN’s interpretation: https://amp.cnn.com/cnn/2021/09/14/politics/census-2020-poverty-income-pandemic/index.html