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 Office of Management and Budget) 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 is 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 are derived from Consumer Expenditure Survey expenditure data on basic necessities (food, shelter, clothing and utilities) and are 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:
The Census Bureau's statistical experts, with assistance from the BLS and in consultation with other appropriate agencies and outside experts, are responsible for the measure's technical design. Starting in 2011, the Census Bureau has published annual supplemental poverty estimates using the new approach. 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.
In early 2019, the Chief Statistician of the United States established the Interagency Technical Working Group on Evaluating Alternative Measures of Poverty (the Working Group) in order to evaluate possible alternative measures of poverty, how such measures might be constructed, and whether to publish those measures along with the measures currently being published. The poverty measures recommended by the Working Group are not intended to replace the official poverty measure or the Supplemental Poverty Measure. The Federal Register Notice and the Working Group’s Interim Report are available online at: https://www.regulations.gov/docket?D=OMB-2019-0007.