Transcript Slide 1

Using the American Community Survey
to Create a National Academy of
Sciences-Style Poverty Measure
Work by the New York City
Center for Economic Opportunity
CEO’s Mandate, Direction,
& Key Challenge
• Create a more useful tool for policymaking
• Adopt NAS recommendations
– Capture policy effects
– Create realistic poverty thresholds
• Employ American Community Survey
– Large annual sample for NYC
– But ACS does not include much of what is needed to
measure family resources as recommended by NAS
The Official Poverty Measure
An Income Adequacy Approach
Threshold:
– Established in the mid-1960s at three times
the cost of the USDA’s “Economy Food Plan”
– Adjusted annually by the change in the
Consumer Price Index
– Uniform across the U.S.
Resources:
– Total family pre-tax cash income
What’s wrong with the current measure?
Definition of resources is too narrow
Pre-tax cash does not capture much of what public policy
does to support low-income families.
–
–
–
EITC and other refundable tax credits
Food Stamps and other nutritional programs
Housing subsidies such as public housing and
section 8 housing vouchers
What’s wrong with the current measure?
Food is no longer one-third of family expenditures
Other
21.3%
Transportation
18.5%
Food
13.2%
Housing
31.7%
Healthcare
4.6% Clothing Utilities
4.4%
6.2%
Source: US Bureau of Labor Statistics, Consumer Expenditure Survey.
What’s wrong with the current measure?
Threshold has lost value relative to median family income
137%
1964=100 Percent
140
130
120
110
100
90
1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004
Median Family Income
Source: US Bureau of the Census
Poverty Threshold
What’s wrong with the current measure?
Threshold does not reflect the high cost of living in NYC
Fair Market Rents, Two Bedroom Apartment
Monthly Rent
$2,000
$1,600
$1,200
$800
$400
$0
C
o
ll C
ro
r
a
$1,318
$805
$871
$932
$944
$1,529 $1,592
$867
$498
S
M
,
ty
n
u
D
I
M
it,
rt o
e
IL
Y
A
Y
PA
ge
,
C
N
,
N
a
o
,
,
r
a
,
s
k
hi
ag
rk
la
co
ve
ol
l
c
p
f
o
s
l
i
i
A
a
f
h
Y
u
D
S
de
nc
C
S
w
a
U
li a
e
r
u
F
N
sa
Ph
n
s
a
Sa
N
X
,T
HUD FMR Area
Source: US Department of Housing and Urban Development
CEO Application of NAS Method
Thresholds based on a
percentage (80.5) of median
annual reference family
expenditures for these
necessities:
– Food
– Clothing
– Shelter
– Utilities
• Plus a little more for
miscellaneous expenses (x 1.2)
• Adjusted for inter-area
differences in housing costs (via
HUD FMRs)
Resources based on annual
income available to family to
obtain items in threshold
including:
– Cash Income, after-taxes
– Value of in-kind subsidies for
food
– Adjustment for Housing
Status
– Deduction for work-related
expenses (child care and
transportation)
– Deduction for medical out-ofpocket expenses (MOOP)
Creation of the CEO Poverty Threshold
Reference Family (Two adults, Two children), 2006
NAS Threshold for entire U.S. (based on food,
clothing, shelter & utilities)
$21,818
Shelter & Utility Share, 44% of $21,818 =
$9,600
Non-Shelter & Utility Share, 56% of $21,818 =
$12,218
Shelter & Utility Share, Adjusted for Ratio of
NYC/US Fair Market Rent (1.45) =
$13,920
CEO Threshold: Adjusted Shelter &
Utility Share + Non-Shelter & Utility Share =
$26,138
Source: US Bureau of the Census and US Dept. of Housing and Urban Development
2006 Poverty Rates Using CEO Threshold
With Alternative Income Concepts
Income Concept:
Rate:
1. Pre-tax cash
23.9
2. After-tax
23.2
3. After-tax, plus Nutritional Assistance
21.8
4. After-tax, plus Nutritional, plus Housing
Status Adjustment
18.6
5. After-tax, plus Nutritional, plus Housing,
minus Work-Related Expenses
20.4
6. After-tax, plus Nutritional, plus Housing,
minus Work-Related Expenses, minus MOOP
23.0
Source: NYC CEO.
Distribution of Population,
By Intervals of the Poverty Threshold:
Poverty Measure
Percent of
Threshold
CEO
OFFICIAL
Percent of
population
Cumulative
percent
Percent of
population
Cumulative
percent
Under 50
6.5
6.5
7.4
7.4
50-74
6.9
13.4
4.7
12.1
75-99
9.6
23.0
5.8
18.0
100-124
11.1
34.1
5.0
23.0
125-149
10.2
44.3
4.8
27.8
Source: NYC CEO
Comparing Poverty Rates,
By Age Group
40
32.0
Percent
30
26.6
27.2
20.0
20
18.1
14.5
10
0
Under 18
18 thru 64
Age Group
CEO
Source: NYC CEO
OFFICIAL
65 & up
Comparing Poverty Rates,
By Family Type
40
36.5
37.3
Percent
30
20
15.8
16.1
13.9
7.9
10
0
Two-Parent
Single-Parent
CEO
Source: NYC CEO
Official
No Children
Comparing Poverty Rates Using Different
Resource Measures, By Age
40
Percent
30
33.9
32.0
27.5
26.6
19.5
20
20.0
10
0
Under 18
18 to 64
Official resource measure
Source: NYC CEO
65 and over
NAS resource measure
Comparing Poverty Rates Using Different
Resource Measures, By Family Type
50
45.7
36.5
Percent
40
30
20.0
20
15.8
13.7
16.1
10
0
Two-Parent
Single-Parent
Official resource measure
Source: NYC CEO
No Children
NAS resource measure
Comparing Poverty Rates,
By Nativity/Citizenship
40
28.6
Percent
30
21.8
20
21.6
20.7
18.6
13.3
10
0
Citizen by birth
Foreign born, naturalized
citizen
CEO
Source: NYC CEO
OFFICIAL
Not a citizen
Comparing Poverty Rates,
By Race/Ethnicity
40
29.7
Percent
30
25.9
23.9
20.7
20
25.8
18.0
16.3
10.0
10
0
Non-Hispanic
White
Non-Hispanic
Black
CEO
Source: NYC CEO
Non-Hispanic
Asian
OFFICIAL
Hispanic, any race
CEO’s Current Work
• Track change over time
• Assist similar efforts by other cities and
states
• Bring poverty measure into City policy
planning
• Advocate for change in federal measure
For More Information
• CEO Poverty Measurement Report:
http://www.nyc.gov/ceo/