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 Bureau of Labor Statistics (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.
In 2016, a new Interagency Technical Working Group (ITWG) on improving the SPM was formed to review potential methodological improvements to the measure. In 2018, ITWG announced a process and timeline for considering changes to be made to the SPM. These changes were implemented in the September 2021 SPM report. Details on the updated methodology can be found at https://www.census.gov/topics/income-poverty/supplemental-poverty-measure/library/working-papers/topics/potential-changes.html.
Future Research Topics
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 Working Group concluded in 2021. The poverty measures recommended by the Working Group are not intended to replace the official poverty measure or the SPM. The Federal Register Notice and the Working Group’s Interim Report are available online at: https://www.regulations.gov/docket?D=OMB-2019-0007. The Working Group’s Final Report is available online at https://www.census.gov/content/dam/Census/library/publications/2021/demo/EvaluatingAlternativeMeasuresofPoverty_08Jan2021.pdf.
In 2020, the Census Bureau commissioned the National Academies of Sciences, Engineering, and Medicine Committee on National Statistics (CNSTAT) to convene a panel to evaluate the Supplemental Poverty Measure and offer recommendations to improve the measure in the future. The expert panel produced a consensus report in April 2023 that outlined key areas of research for the Census Bureau and the BLS to work on in the coming years. The panel’s report can be found at https://nap.nationalacademies.org/catalog/26825/an-updated-measure-of-poverty-redrawing-the-line.
The Census Bureau conducts ongoing research on improvements and will consider the recommendations of the CNSTAT panel alongside research by external and governmental experts in developing a research agenda and roadmap for improvements to the SPM. In considering any changes that would be made to the SPM, the Census Bureau will continue to work with BLS and the current ITWG on the SPM. The ITWG on the SPM has an established process for making changes to the SPM, with major changes only occurring only after a multi-year process of research and public engagement.