Interesting piece in the Washington Post about thoughts by NY mayor Mike Bloomberg on how to measure poverty. It sounds correct that measuring poverty by amount of income spent on food is not so relevant any more with the advent of fast food (poorer health) and the increased costs of items like rent, transportation and health care. We wish Mr. Bloomberg and the city of NYC Godspeed in coming up with better metrics. We agree the federal measurement system is perhaps outdated. (link to article here) -pg
N.Y. Mayor Offers New Poverty Gauge
Bloomberg Says Federal Measurement System Is Outdated
By Keith B. Richburg
Washington Post Staff Writer
Monday, July 14, 2008; A02
NEW YORK, July 13 — Calling the current federal poverty measure broken and outdated, Mayor Michael R. Bloomberg (I) on Sunday unveiled a new method that he and his aides said gives a more accurate picture of the poor, and that he hopes eventually will become the new national standard.
“If we are serious about fighting poverty, we also have to start getting serious about accurately measuring poverty,” Bloomberg said in remarks prepared for delivery to the convention of the NAACP in Cincinnati. Bad weather prevented his flight to Ohio, and one of Bloomberg’s deputy mayors made the speech in his place.
Bloomberg chose as his audience the nation’s oldest civil rights organization, which is committed to increasing economic empowerment for African Americans, who remain disproportionately poor. His effort comes as the House Ways and Means subcommittee on income security plans a hearing this week on the need for a modern poverty measure for the United States.
The current federal measures show New York City with a poverty rate of 18.9 percent. But the new measure shows that the rate is 23 percent. And the new measure shows wide differences within that spectrum. There are fewer people in extreme poverty, reflecting the impact of anti-poverty assistance programs. But under the new measure, the number of elderly poor nearly doubles, from 18 percent to 32 percent, mostly because of health-care costs.
The current federal poverty measure, in use since 1969, is based primarily on how much of an individual or household’s pretax income is spent on food. The federal poverty measure is used to determine eligibility and amounts of assistance from federal and state programs.
But Bloomberg’s aides said that while food accounted for a third of household spending in the 1960s, food now accounts for only an eighth of spending, with housing and transportation taking a larger slice of income. The new measurement, put together by New York’s Center for Economic Opportunity, takes into account a household’s spending on food, clothing, shelter, transportation, utilities and out-of-pocket medical expenses.
Equally important, the advisers said, the new measurement also takes into account targeted poverty programs that the current measure does not — for instance, whether the individual or household gets food stamps or housing subsidies.
“We don’t have the benefit of an accurate measure of poverty,” said Linda Gibbs, deputy mayor for health and human services, in a conference call with reporters.
The new measure also takes into account regional differences in housing costs to reflect the higher amounts in expensive cities such as New York and San Francisco.
The new measurement is based largely on a method the National Academy of Sciences proposed to Congress in 1995. The center also said it uses census statistics to make adjustments for geographic differences in housing costs.