Thursday, August 13, 2015

Measuring Poverty (1)

Almost one-third of California households, 31 percent, can’t meet their basic costs of living according to a report. 

According to the U.S. Census Bureau, California’s official poverty rate, as averaged from 2009 to 2013, was 15.9 percent. So, why the big difference? The official poverty measure’s biggest weakness is that it does not account for regional cost of living variances. As far as the official poverty rate is concerned, the cost of living in New York City or San Francisco is the same as it is in Houston or Kansas City. Further, the official poverty rate only accounts for cash assistance in determining household income. As such, it ignores the value of food assistance (the Electronic Benefit Transfer card spends the same as cash at the grocery store, but, the official poverty rate doesn’t count it) as well as rental subsidies in addition to other benefits and costs. The Census Bureau developed an alternative poverty measure to address the shortcomings of its half-century-old traditional poverty yardstick. Known as the Supplemental Poverty Measure, it shows that California has the nation’s highest poverty rate, 23.4 percent.

But, while showing a higher poverty rate for California than the old, official measure, the Supplemental Poverty Measure still indicates a lower rate of poverty than does the study from United Ways of California. The difference is likely due to the fact that the Census Bureau only looked at state-to-state housing costs while the United Ways researchers included a far larger basket of goods and services—all of which cost more in California than in America at large.

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