[Federal Register Volume 75, Number 101 (Wednesday, May 26, 2010)]
[Notices]
[Pages 29513-29514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-12628]


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DEPARTMENT OF COMMERCE

Bureau of the Census

[Docket Number 100429203-0204-01]


Developing a Supplemental Poverty Measure

AGENCY: Bureau of the Census, Department of Commerce.

ACTION: Notice and solicitation of comments.

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SUMMARY: The Bureau of the Census (Census Bureau) issues this notice to 
request comments on the approach to developing a Supplemental Poverty 
Measure (SPM) presented in a report entitled ``Observations from the 
Interagency Technical Working Group on Developing a Supplemental 
Poverty Measure,'' which was recently released by the Interagency 
Technical Working Group on Developing a Supplemental Poverty Measure 
(Working Group). This report was produced as part of an effort by the 
Working Group to suggest how the Census Bureau, in cooperation with the 
U.S. Department of Labor's Bureau of Labor Statistics (BLS), should 
develop a new Supplemental Poverty Measure. The report provides 
observations about how to make a series of initial choices in the 
development of the SPM. The eventual publication of the SPM will not 
replace the official poverty measure, nor will it have any impact on 
allocations determined by the poverty measurement. Rather, it is part 
of the Census Bureau's ongoing effort to more accurately measure 
poverty levels in the United States.

DATES: To ensure consideration, written comments must be submitted to 
the office listed in the ADDRESSES section of this notice on or before 
June 25, 2010.

ADDRESSES: Send comments to David Johnson, Housing and Household 
Economic Statistics Division, Census Bureau, 4600 Silver Hill Road, 
Stop 8500, Washington, DC 20233-8500 or to [email protected]. The 
Interagency Technical Working Group's report may be found at: http://www.census.gov/hhes/www/poverty/SPM_TWGObservations.pdf.

FOR FURTHER INFORMATION CONTACT: David Johnson, Housing and Household 
Economic Statistics Division, Census Bureau, telephone number 301-763-
6443 (this is not a toll-free number), e-mail to: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Since the publication of the first official U.S. poverty estimates 
in 1964, there has been continuing debate about the best approach to 
measuring poverty in the United States. Recognizing that supplemental 
estimates of poverty can provide very useful information to the public 
as well as to the Federal Government, in 2009, the Office of Management 
and Budget's (OMB) Chief Statistician formed an Interagency Technical 
Working Group on Developing a Supplemental Poverty Measure (Working 
Group). This group included representatives from BLS, the Census 
Bureau, the Economics and Statistics Administration, the Council of 
Economic Advisers, the U.S. Department of Health and Human Services, 
and OMB. The Working Group asked the Census Bureau, in cooperation with 
the Bureau of Labor Statistics, to develop a Supplemental Poverty 
Measure (SPM) to obtain an improved understanding of the economic well-
being of American families and of how Federal policies affect those 
living in poverty, and offered its observations on how the Census 
Bureau should do so in the above-referenced report.
    The SPM ultimately produced by the Census Bureau would not replace 
the official poverty measure, and the SPM will not be the measure used 
to estimate eligibility for government programs. The official 
statistical poverty measure, as defined in OMB Statistical Policy 
Directive No. 14, will continue to be produced and updated every year. 
The SPM is instead designed as an experimental measure that defines 
income thresholds and resources in a manner different from the official 
poverty measure. The Census Bureau considers the SPM a work in 
progress, and both the Working Group and the Census Bureau expect that 
there will be improvements to the SPM over time. The first publication 
of the SPM will be accompanied by a detailed description of the 
methodology used to estimate the new supplemental measure, and the 
Census Bureau expects to update this description as changes are 
incorporated in the SPM.
    The new supplemental measure would be published initially in the 
fall of 2011 at the same time and level of detail as the 2010 income 
and poverty statistics that reflect the official poverty measure, and 
annually thereafter. Developing and estimating an SPM will take 
substantial advance work and planning, and the Working Group's 
observations are meant to assist the Census Bureau and the BLS in such 
planning.

II. Defining the Supplemental Poverty Measure

    In its report, the Working Group laid out a series of suggestions 
and recommendations that, taken together, provide a roadmap through 
which the Census Bureau, with the assistance of BLS, can use to produce 
the initial set of estimates of the number and percentage of people in 
poverty based on the SPM in 2011. It is likely that the procedures used 
to create this first set of estimates will closely resemble the Working 
Group's recommendations. A much abbreviated summary of the group's 
suggestions follows. The Census Bureau invites the public to read and 
offer comments on the approach described in the Working Group's full 
report, which can be found at http://www.census.gov/hhes/www/poverty/SPM_TWGObservations.pdf. The Census Bureau is especially interested in 
receiving comments on the methodology the Working Group employed in 
making its recommendations.
    The poverty threshold is the annual expenditure amount below which 
a family is considered poor. The Working Group recommended that the 
poverty threshold for the SPM should be established on the basis of 
expenditures for commodities that all families must purchase: Food, 
shelter, clothing, and utilities (collectively, FSCU). This threshold 
should be derived from expenditure data from BLS' U.S. Consumer 
Expenditure Survey. The Working Group recommended that the reference 
sample for this threshold be

[[Page 29514]]

an average of all families with exactly two children. A ``family unit'' 
should consist of all related individuals who live at the same address, 
any co-resident unrelated children who are cared for by the family, and 
any cohabiters and their children. Using the most recent five-year 
distribution of FSCU expenditures, the Working Group recommended that 
the Census Bureau set the dollar amount of the poverty threshold at the 
33rd percentile of the distribution of FCSU expenditures. To account 
for differences among those who rent, own a home with a mortgage, and 
own a home without a mortgage, the Working Group recommended the Census 
Bureau develop an adjustment factor for the shelter component, to 
reflect differences in expenditures among these three groups. To 
account for basic expenditures outside of FCSU, the Working Group 
recommended that the Census Bureau multiply the dollar amount (as 
calculated above) by 1.2. To define thresholds for different families, 
the Working Group recommended the use of the so-called ``three-
parameter equivalence scale'' that has been used by the Census in 
recent years. The Working Group also recommended that thresholds be 
updated annually using an updated five-year distribution of FSCU 
expenditures.
    The Working Group also recommended that poverty thresholds should 
be adjusted for price differences across geographic areas. American 
Community Survey (ACS) data, which is collected annually by the Census 
Bureau, appear to be the best data currently available from which one 
can create a housing price index based on differences in rental prices 
of housing across areas. Future work may provide price data that can be 
used to measure interarea price differentials on more items than 
housing alone.
    To determine poverty status under the SPM, resources (income plus 
noncash benefits, minus necessary expenses) are compared to a family's 
poverty threshold (as calculated in the method described above). If a 
family's resources are below its poverty threshold, that family and all 
persons in the family are counted as poor. The Working Group 
recommended that family resources be estimated as the sum of cash 
income, plus any Federal government in-kind benefits that families can 
use to meet their FCSU. From this amount, the Working Group recommended 
subtracting taxes (or adding tax credits), work expenses, child support 
paid, and out-of-pocket medical expenses to determine poverty status. 
The survey used to make these calculations will be the Current 
Population Survey's Annual Social and Economic Supplement, (CPS ASEC), 
which is jointly sponsored by the Census Bureau and BLS.
    Work expenses have an impact on poverty status. The Working Group 
therefore recommended that the definition of resources used to 
calculate the SPM should exclude expenses associated with commuting and 
child care. For child care, the Working Group recommended that actual 
expenses, either reported on the CPS ASEC or assigned to CPS ASEC 
families based on other household surveys that collect these data, 
should be used. For other work expenses, the Working Group recommended 
that the Census Bureau investigate the advantages and disadvantages of 
using actual expenses versus an average amount for all working adults.
    To account for medical out-of-pocket (MOOP) expenses, the Working 
Group recommended that the Census Bureau examine the reliability of 
questions newly added to the CPS ASEC in 2010. If these data are found 
to be reliable, the Working Group recommended that the Census Bureau 
use data from the CPS ASEC in the calculation of family resources. If 
these data are found to be unreliable, then the Working Group 
recommended that MOOP should be assigned to CPS ASEC families and 
individuals from other surveys that collect reliable information on 
MOOP, in a way that takes into account the differences in medical 
expenses among demographic groups. The Working Group also suggested 
that the Census Bureau investigate the advantages and disadvantages of 
adjusting MOOP for those who are uninsured, to reflect that the 
uninsured may be paying less than is customary because they lack health 
insurance and cannot pay for health services.

III. Desired Focus of Comments

    While the Census Bureau welcomes public comments on the approaches 
described in the report of the Working Group, the Census Bureau is 
particularly interested in receiving comments on the specific methods 
used in the report, to ensure that the Census Bureau uses best 
practices in developing the SPM. Specifically, the Census Bureau is 
interested in comments on:
     Methods and data sources used to geographically adjust 
poverty thresholds;
     Methods and data sources used to adjust resources to 
account for child care and other work-related expenses;
     Methods and data sources used to adjust resources to 
account for medical out-of-pocket expenses; and
     Methods and data sources used to impute dollar values for 
in-kind benefits and taxes.
    For more information on the Working Group's observations on the 
components for the new SPM, see the report entitled ``Observations from 
the Interagency Technical Working Group on Developing a Supplemental 
Poverty Measure.'' For more information/background on issues related to 
alternative poverty measures, see http://www.census.gov/hhes/www/povmeas/papers.html.

    Dated: May 18, 2010.
Robert M. Groves,
Director, Bureau of the Census.
[FR Doc. 2010-12628 Filed 5-25-10; 8:45 am]
BILLING CODE 3510-07-P