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Deep in the weeds: A tale of two poverty measures




Some good news on poverty. Robert Doar:

Something that should go without saying but too often does not: When we calculate how many Americans live in poverty and how well our social safety net is reaching them, our measurements should reflect the resources available to families from their earned income, from saved money and durable goods, and from public assistance programs.

While there are several measurements for poverty in America, only AEI fellow Bruce Meyer’s and Jim Sullivan’s consumption poverty rate accounts for standard of living rather than income from earnings and assistance. Thanks to its reliance on a rigorous evidence base of survey and administrative data that has been called “a dizzying, overwhelming effort,” the consumption poverty measure has earned respect in policy circles for its comprehensiveness.

So it is good news that Meyer and Sullivan found a decline in consumption poverty once again in 2017, in their report issued on Wednesday. The consumption poverty rate declined from 3.0 percent in 2016 to 2.8 percent this past year — in other words, there were over 650,000 fewer Americans in material deprivation than there were in 2016. This is not entirely surprising given the health of our economy — especially the uptick in employment — combined with generous assistance for working families. But it is still encouraging to see that our system of fighting poverty is working better than it has in the past.

[Robert Doar, “Deep in the Weeds: A Tale of Two Poverty Measures,” American Enterprise Institute, November 2]


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