(Action for Children) A new report released by the U.S. Census Bureau Monday suggests more Americans are living in poverty than previously thought. The Supplemental Poverty Measure (SPM), finds 49.1 million Americans (16%) now live in poverty, a slight increase from the 46.6 million (15%) thought to be poor under the traditional measure of poverty.  

While the overall number of Americans living in poverty increases under the SPM, the number of children living in poverty actually drops from 16.8 million children (22.5%) to 13.6 million (18.2%) under the new measure.  This decline is due to differences in how the SPM calculates poverty.

While the traditional poverty measure examines only gross income, the SPM compares the bills families must pay, food, clothing, shelter and utilities, and the resources they have available to pay them.  The SPM excludes expenses that reduce resources, such as payroll taxes, transportation costs or medical expenses, and adjusts for differences in housing status and cost of living by geography.

The result is a more sophisticated picture of what it takes to make ends meet in America, and the resources available to help vulnerable children and families do just that. In 2010, the official poverty threshold for two adults and 2 children was $22,113, the supplemental threshold was $24,343.

These figures highlight the importance of anti-poverty programs in alleviating economic hardship among children.  According to SPM analysis, the Earned Income Tax Credit, a refundable federal income tax credit for low- and moderate- income working individuals, helps to reduce child poverty by 4.2 percentage points. The Supplemental Nutrition Assistance Program, which helps low income families meet their food costs, improves the child poverty rate by 3 percentage points.  

Barb Bradley, President & CEO of Action for Children North Carolina, a statewide policy and advocacy organization dedicated to improving outcomes for children in North Carolina offered the following statement in response to the new poverty figures:

“While far too many children are considered poor, even under these new estimates, these data show what many advocates have been saying all along: smart investments can help reduce poverty among children. These findings are significant for a number of reasons. Research indicates that poverty is the single greatest threat to the well-being of children. The experience of poverty during childhood, particularly during the critical period between birth and age five, has been associated with poorer academic performance, reduced health and lower earnings potential later in life. 

While these estimates show the social safety net helps to lift many children out of poverty, they also indicate that child poverty is on the rise.  In 2009, the SPM estimated 17.3% of American children lived in poverty.  Last year, that percentage grew to 18.2%.

“Reducing poverty is good policy. Not only does it improve the health and well-being of our children in the short run, it bolsters the economic strength of our country in the long-run by helping us to create the healthy, well-educated workforce we need to keep the economy moving and to drive innovation.”

The supplemental poverty measure does not replace the official poverty measure, and will not be used to determine program eligibility or resource allocation.  Instead, the SPM helps improve existing knowledge by quantifying the impact of social safety net programs in reducing economic hardship for vulnerable children and families.

The Research Supplemental Poverty Measure: 2010 is available online at http://www.census.gov/prod/2011pubs/p60-241.pdf.

 A new report, Living on the Edge: America’s Low-Earning Families,  finds that 40 percent of all children – 30 million kids – grow up in households in which their parents are employed, yet the family still struggles with making ends meet.

The report concludes by answering the question, “What should be taken from this unfolding story about America’s low earning families?”

• First, the importance of a sharper account of who the “squeezed middle? are and what has been happening to them, as part of a wider story about the state of working America today. Here the focus needs to be on how overall standards of living are changing – rather than on income alone. Those seeking to tackle child poverty need now to direct their efforts at the world of work, as well as at the world of welfare.
• Second, that however global the changes that are affecting low paid workers, there is still a central role for government, and for social and economic policies that protect against the vagaries of such changes.
• Finally, there is a lesson about the goal to aim for. It is easy to fall into a trap of thinking that the central question is one of deficit reduction versus growth. The focus instead needs to be on fostering a broad-based prosperity – a prosperity that will provide low- and middle-income families with the economic security that has been seized from them over the last generation and create a prosperous future for today’s children.

Download the report.