Senior Citizens in U.S. Falling Into Poverty Faster Under Census Measure

More Americans, and a greater percentage of the elderly, were poor in 2010 than the U.S. Census Bureau estimated in September, new figures from the agency show.

The bureau used an alternate method to calculate that 16 percent of Americans, or 49.1 million people, lived in poverty in 2010, up from the official rate of 15.2 percent, or 46.6 million, according to a report released today. The new measure put the proportion of indigent Americans 65 and older at 15.9 percent, an increase from the official 9 percent rate. Among those under 18, the new rate was 18.2 percent, a drop from the official rate of 22.5 percent.

The new Supplemental Poverty Measure is a “more complex statistic,” showing how much families spend on food, shelter, clothing and utilities, the bureau said. It finds that medical out-of-pocket expenses have the largest proportional effect on disposable income of any expense or benefit, and takes into account how geographic differences can alter housing costs.

“It is important to have a measure that can accurately tell us what’s going on and -- especially in tough times -- it is critical that we know what programs really help lift individuals and families out of poverty,” New York Mayor Michael Bloomberg said in a statement. The new measure “brings us one step closer to giving us the tools we need to fight this ongoing challenge.”

Across Most Groups

Most groups saw their poverty rates increase using the new calculations compared with the official count, including married couples, whites, Asians, those born outside the U.S., homeowners with mortgages and those with private health insurance. Rates fell for blacks, renters, people living outside metropolitan areas, those living in the Midwest and the South and those covered by only public health insurance.

The new methodology contrasts with the one the bureau has used since the 1960s, which determines the official poverty line by tripling a family’s minimum annual food budget. That method fails to accurately reflect economic realities by excluding expenses such as payroll taxes, which reduce disposable income, and public programs such as food stamps, which free resources, the Census Bureau said, citing an independent study from 1995.

Today’s data “will provide a deeper understanding of economic conditions and policy effects,” according to the bureau. It won’t be used to assess eligibility for government programs, the bureau said.

Child Poverty

The “single most important finding” from the report is that “government benefit programs, especially those that support low-income workers, dramatically reduce child poverty,” said Ron Haskins, a senior fellow at the Brookings Institution in Washington. “We now have a much fuller picture, which should allow policy makers to better target scarce government resources.”

The annual income at which a family of four -- two adults and two children -- is considered living in poverty was $24,343 in 2010, under the supplemental measure calculations. That compares with the official figure of $22,113 for the same year.

New York’s mayor, who is founder and majority owner of Bloomberg News parent Bloomberg LP, said the bureau’s new calculations were based on methods pioneered by the city’s Center for Economic Opportunity in 2008.

Highest Since 1993

Official numbers, which the bureau reported in September, showed the proportion of people living in poverty climbing to 15.1 percent last year from 14.3 percent in 2009, the highest level since 1993. The 15.1 percent figure didn’t include unrelated individuals under the age of 15 living in a household.

The ranks of people in poverty, about one in seven Americans, are the highest in the 52 years since the bureau began gathering that statistic.

The September data also showed median household income declined 2.3 percent in 2010 to $49,445, down from $50,599 the year before. That was even as the U.S. economy expanded 3 percent in 2010.

Those figures were part of an annual report on income, poverty and health insurance released by the Census Bureau. The data are based on a survey of about 100,000 addresses that’s used as the primary source of figures about the nation’s labor force.

To contact the reporter on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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