{ "id": "R45031", "type": "CRS Report", "typeId": "R", "number": "R45031", "active": true, "source": "CRSReports.Congress.gov, EveryCRSReport.com", "versions": [ { "source_dir": "crsreports.congress.gov", "title": "The Supplemental Poverty Measure: Its Core Concepts, Development, and Use", "retrieved": "2022-08-22T04:03:36.635798", "id": "R45031_4_2022-07-19", "formats": [ { "filename": "files/2022-07-19_R45031_1f004a2ef5357bc9e1987432c1c103f7b32ec2e1.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/R/R45031/4", "sha1": "1f004a2ef5357bc9e1987432c1c103f7b32ec2e1" }, { "format": "HTML", "filename": "files/2022-07-19_R45031_1f004a2ef5357bc9e1987432c1c103f7b32ec2e1.html" } ], "date": "2022-07-19", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "R", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=R45031", "type": "CRS Report" }, { "source": "EveryCRSReport.com", "id": 575956, "date": "2017-11-28", "retrieved": "2017-12-05T14:01:04.097826", "title": "The Supplemental Poverty Measure: Its Core Concepts, Development, and Use", "summary": "The Supplemental Poverty Measure (SPM) is a measure of economic deprivation\u2014having insufficient financial resources to achieve a specified standard of living. The SPM addresses some of the limitations of the official poverty measure, without supplanting it outright.\nBoth the SPM and the official measure determine the poverty status of people and families by comparing their financial resources against poverty thresholds that are valued in dollars. For both measures, poverty thresholds vary by family size and composition, and families whose resources are lower than the thresholds are considered to be poor.\nThe measures differ in their definitions of \nneed, as it is used in the thresholds (the dollar amounts used to determine poverty status), \nfinancial resources that are considered relevant for comparing against the measure of need as specified in the thresholds, and \nfamily, for the purpose of assigning thresholds and counting resources.\nNeed\nThe official poverty thresholds measure needs derived from the cost of an austere food budget. The food budget was multiplied by three, based on the finding that food accounted for about one-third of total family expenditures in 1955. Since their original computation, these thresholds have been adjusted annually for price inflation. In contrast, the SPM\u2019s thresholds are based on consumer expenditures for food, clothing, shelter, and utilities, and it uses five years of data from the Consumer Expenditure Survey in calculating needs and thresholds. Developing the SPM thresholds starts with spending data for families with exactly two children. These data are refined by using approximately the 33rd percentile of families\u2019 expenditures on food, clothing, shelter, and utilities. Next, an extra 20% is figured into the thresholds for miscellaneous expenses such as cleaning supplies and personal care items. The thresholds then undergo further adjustment to reflect that\nhousing costs differ between homeowners with mortgages, homeowners without mortgages, and renters;\nhousing costs differ geographically; and\ncosts differ by family size and composition.\nFinancial Resources\nFinancial resources to meet needs, whether in the SPM or the official measure, are based on the sum of income of all family members. While the official measure uses money income before taxes, the SPM makes additional adjustments and considers a wider range of resources. The SPM includes the value of certain in-kind benefits (such as food and housing subsidies), uses income after estimated federal and state taxes, and subtracts some expenses from income. These expenses include medical out-of-pocket costs, such as health insurance premiums, physician co-pays, and over-the-counter medications; child support paid outside of the household; and work expenses, such as child care and the cost of commuting, tools, uniforms, or licensing fees related to a person\u2019s employment. Work expenses, including child care, are capped at the amount of earnings from work of the lowest-earning family member. These expenses are subtracted from family income because they cannot be used to obtain the needs defined in the SPM thresholds. Unlike the official poverty measure, the range of financial resources included in the SPM is defined to be consistent with the types of needs used to compute the SPM poverty thresholds.\nFamily\nLike the official measure, the SPM family unit definition includes people related by birth, marriage, or adoption living in the same housing unit. However, the SPM additionally includes cohabiting couples and their children, and foster children below age 22.\nHow Does Poverty Look through the Lens of the SPM?\nThe demographic profile of the poverty population is different under the SPM than under the official measure. Children have a comparatively lower poverty rate (percentage in poverty) under the SPM, and the aged (65 and older) and working-age persons (18 to 64) have comparatively higher poverty rates. These differences can be explained by the SPM\u2019s resource definition. The SPM includes tax credits and in-kind benefits that help families with children (in effect, boosting the measure of family income). It subtracts medical out-of-pocket expenses, which disproportionately affects the aged (lowering their measure of income), and subtracts work-related expenses, which disproportionately affects the working-age population (lowering their measure of income).\nUses and Limits\nThe SPM can give policymakers the tools to understand how taxes and government programs, including the noncash programs, affect the poor. It also illustrates how medical expenses and work-related expenses such as child care can affect a family\u2019s economic well-being. However, the SPM poverty estimates are derived from household survey data, and hence are affected by issues such as underreporting of income from government benefit programs, limitations on how tax liabilities and tax benefits can be estimated based on survey data, and differences in how noncash benefits and lump-sum tax refunds are \u201cvalued\u201d by program recipients versus how they are valued for the purposes of poverty measurement. Additionally, the SPM does not directly value health insurance provided publicly or privately. Further, poverty has historically been measured in the United States as an \u201cabsolute\u201d measure, based on how many people fall below a set standard of living. Questions have been raised about whether the SPM continues to measure poverty in that way, or represents a \u201crelative\u201d measure of poverty, based on how the population ranks in terms of well-being relative to each other.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R45031", "sha1": "e70ee3d71694b965dda10fb09da4a7d9f2955e56", "filename": "files/20171128_R45031_e70ee3d71694b965dda10fb09da4a7d9f2955e56.html", "images": { "/products/Getimages/?directory=R/html/R45031_files&id=/0.png": "files/20171128_R45031_images_864538e0ee3fa6412c98450118c78a6350021072.png" } }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R45031", "sha1": "fa00444cdcc84ebf66cd9954f5f0004c64ae5987", "filename": "files/20171128_R45031_fa00444cdcc84ebf66cd9954f5f0004c64ae5987.pdf", "images": {} } ], "topics": [] } ], "topics": [ "Domestic Social Policy", "Economic Policy" ] }