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N.Y. Unveils New Poverty Measure

AFFORDABLE HOUSING FINANCE • November 2008

DESCRIBING THE FEDERAL POVERTY MEASURE as “broken,” New York City officials have come up with their own model, becoming the first local government in the nation to reformulate the 40-year-old system of gauging poverty.

The existing measure is based primarily on food expenditures and has not materially changed since its adoption in 1969, according to the city. New York City’s measure, which was developed over the past year by the city’s Center for Economic Opportunity (CEO), factors in food, clothing, shelter, and utilities expenditures, and counts benefits such as food stamps and Sec. 8 housing subsidies. It also adjusts for differing geographic cost factors in housing.

Under the new measure, New York’s poverty rate is 23 percent compared to 18.9 percent under the existing measure. The poverty line for a family of two adults and two children under the current measure is $20,444 and increases to $26,138 under the CEO measure.

“If we are serious about fighting poverty, we also have to start getting serious about accurately measuring poverty,” says Mayor Michael Bloomberg. “Since the mid-1960s, the economy has vastly changed, so has society, and so have government benefits, but the poverty formula hasn’t adjusted in response. We can’t devise effective strategies for tackling poverty until we understand its full dimensions.”

Other mayors, including Antonio Villaraigosa in Los Angeles and Mark Mallory in Cincinnati, commended New York’s efforts, indicating growing interest in revamping the existing measure. In addition, Rep. Jim McDermott (D-Wash.), who is chairman of the House subcommittee on income security, plans to introduce legislation that would require the government to develop a new method to determine who is poor.