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/