Who's Poor? Don't Ask the Census Bureau

The National Academy of Sciences has estimated what the Orshansky measure would look like today if it were updated for changes in consumption patterns, and found the threshold could be as much as 45 percent higher, implying higher poverty rates.

Second, the current measure leaves out some sources of income and some expenditures that weren't relevant when it was devised. The Census Bureau counts the value of cash transfers, like welfare payments, but it ignores the value of food stamps and health benefits, as well as newer tax credits that can significantly add to the income of low-end working families. Not only would taking these additions into consideration bring down the poverty rate figure, it would also provide a real measure of the effects of these antipoverty programs.

On the other side of the ledger, the current method also ignores important costs to low-income families. For example, these days many more women with young children participate in the labor force, yet the money they spend on child care is not factored into the poverty calculation.

If the Census Bureau's poverty findings were simply an accounting tool, these failures might not be important to anyone but economists and demographers. But the official figure plays an important role in determining eligibility for the federal and state safety nets: if we're not getting the measurement right, we're not providing services to the right people.

There is a better way, but of course it's a political hot potato. Census Bureau analysts have been working on alternative measures that take into account the changes in family life over the past four decades. The one I consider most reliable, because it factors in child-care costs for working parents, has shown poverty rates that average about 3 percent above the official figure, implying that there may be 9 million more Americans whose incomes are inadequate for their basic needs.

Of course, no administration would want to adopt such a measure on its watch.