In 2010, an Interagency Technical Working Group (which included representatives from the Bureau of Labor Statistics (BLS), the Census Bureau, the Economics and Statistics Administration, the Council of Economic Advisers, the U.S. Department of Health and Human Services, and OMB) issued a series of suggestions to the Census Bureau and BLS on how to develop a Supplemental Poverty Measure. Their suggestions drew on the recommendations of a 1995 National Academy of Science report and the extensive research on poverty measurement conducted over the past 15 years.
The official poverty measure, which has been in use since the 1960s, estimates poverty rates by looking at a family's or an individual's cash income. The new measure will be a more complex statistic incorporating additional items such as tax payments and work expenses in its family resource estimates. Thresholds used in the new measure will be derived from Consumer Expenditure Survey expenditure data on basic necessities (food, shelter, clothing and utilities) and will be adjusted for geographic differences in the cost of housing. Unlike the official poverty thresholds, the new thresholds are not intended to assess eligibility for government programs. Instead, the new measure will serve as an additional indicator of economic well-being and will provide a deeper understanding of economic conditions and policy effects. Additional details can be found at http://www.census.gov/hhes/povmeas/methodology/supplemental/research/SPM_TWGObservations.pdf.
The Census Bureau's statistical experts, with assistance from the BLS and in consultation with other appropriate agencies and outside experts, will be responsible for the measure's technical design. The Census Bureau plans to publish preliminary poverty estimates using the new approach in October 2011. Both the Census Bureau and the Interagency Technical Working Group consider the Supplemental Poverty Measure a work in progress and expect that there will be improvements to the statistic over time.
The Research Supplemental Poverty Measure: 2012 [PDF - 875k]
Kathleen S. Short (U.S. Census Bureau)