Census officials hope the new indicator will provide a better understanding of America’s poor, by measuring both the needs of families and the effect of government help. The SPM estimates the cost of food, clothing, shelter and utilities, then adds a further 20% for other expenses. This threshold is adjusted for the cost of living in different regions and for whether a family owns or rents its home. To assess a household’s ability to pay for basic expenses, the SPM counts cash income as well as food stamps, tax credits and other government support, minus tax payments, work expenses and out-of-pocket medical costs.
Final figures are due to be published in the autumn, but preliminary results were released this month. In 2009 15.7% of Americans were poor, compared with 14.5% in the official measure (see chart). The share of those in extreme poverty fell, relative to the official measure, thanks to the inclusion of government support. The poverty rate dropped in rural areas and rose in urban and suburban ones. It jumped in the north-east and the West, while staying almost level in the South and falling in the Midwest. The most dramatic rise was for the elderly—from 9.9% in the official measure to 16.1% in the SPM, in part because of their high medical expenses.