The Bureau of the Census just released its new way of calculating poverty, which adjusts for a lot of things the old "official" poverty level calculators did not. This Supplemental Poverty Measure (SPM) is very useful, if depressing. It increases the number of Americans considered to be in poverty from 15.0% to 16.1% of the population, and tells us California and Washington DC have close to a quarter of their residents living in poverty. This latter adjustment is because of the high costs of living - especially housing and health care - in California and DC. Californians certainly knew this, and places like San Francisco have done what they could about adjusting for it. It's very good - however depressing - to see official national measures finally taking account of California's high cost of living in poverty level figures.

The new calculations are complex, taking account of income supplements from governmental programs, as well as costs of living like what it costs to get to and keep your job, pay your taxes, and get medical care, which as we all know are much larger percentages of our spending than they used to be when the old measures were set. Maybe sometime someone will get around to making a friendly little "Am I Living in Poverty?" page or app that can apply all the bureau's calculations based on a little questionnaire. Until then, looking through the publication about it (PDF) is kind of slow going. So I looked first at the graphs.

Here's the one that really jumped out at me:

This graph is in the further discussion section of the report, and what it's showing is what would happen to the new calculation of the percentage of Americans in poverty (the SPM) if you removed each of these factors from the picture. So, as it explains in the discussion, up at the top of the graph,

without Social Security benefits, the SPM rate would have been 24.4 percent rather than 16.1 percent
In other words, if it weren't for the income provided by Social Security, 8.4% more of the population of the US would be in poverty. That's over 26 million people. This is what Social Security is about, and we're none of us surprised, even if putting it that starkly is a bit sobering. You look down the graph and you see the help provided by SNAP (aka food stamps) and so on, the millions more lifted (albeit barely) out of poverty by each program.

Then you look at the bottom of the graph, where it skews in the other direction. In these, it is saying what percentage of America is in poverty, according to the new calculation, but wouldn't be counted among the poor if we ignored certain things they are paying. Taxes, for example. You have to pay them, and even if you're poor, you have taxes deducted from your paycheck. Among other things, they fund Social Security and Unemployment Insurance, which help so many more people up on top of the graph. Still, sobering.

But look at the bottom line of the graph: "MOOP". Okay, it sounds like a cute noise made by a Muppet. But it stands for "Medical Out of Pocket." And that bottom line's implication is called out in the explanation, too:

Without subtracting MOOP from income, the SPM rate for 2011 would have been 12.7 percent rather than 16.1 percent.
Yes, that means that 3.4% of the population of the United States - over ten million people - are in living poverty who wouldn't be in poverty if it weren't for their medical bills.

Please, if you think I'm misinterpreting this graph and its explanation, correct me. I'd love to find out I'm wrong.

Originally posted to rcbowman on Sat Nov 17, 2012 at 05:52 AM PST.

Also republished by Community Spotlight.

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