by Astrid Spota

According to an alternate poverty measure released by the U.S. Census Bureau last week, 16 percent of U.S. residents — or 48 million people — are living in poverty. That’s 9 percent higher than the official poverty rate currently used by the federal government.

Because the government uses the official poverty rate to determine eligibility for various benefits, like food stamps, this difference between two mathematical calculations can have a real impact on the lives of low-income Americans.

Under the official measure, 14 percent of U.S. residents, or 44 million people, are living in poverty. That leaves the 4 million Americans who are living right above the official poverty level without the last-resort benefits that help families keep food on the table.

The official poverty rate has long been criticized for being an outdated and inadequate calculation that understates the extent of poverty in the U.S. Developed in 1955, it doesn’t account for increases in the cost of basic necessities like food and housing, and it doesn’t measure the impact of tax credits and government benefits like food stamps.

The new alternate measure is a much more dynamic calculation. It includes non-cash transfers like food stamps and housing subsidies in the calculation of household income, and accounts for household expenses like out-of-pocket medical costs and taxes owed. And, so important for an expensive city like New York, it considers geographical variability in the cost of living.

These sophisticated calculations lead to some interesting findings. Among them:

• Under the alternative measure, the percentage of senior citizens living in poverty is almost double that of the official rate, increasing from 9 to 16 percent. This drastic increase is primarily attributed to rising medical expenses.
   
• After adjusting for geographical variations in the cost of living, the new estimate found that one in five residents living in central cities is living in poverty, compared to one in six living in non metro areas and one in seven living in the suburbs.
   
• Without food stamps, the poverty rate would increase from 16 to 17 percent, and without the Earned Income Tax Credit (EITC) it would increase to 18 percent.

Findings like these have serious implications for government policies and programs designed to meet the needs of the most vulnerable Americans. Acting on the knowledge that the number of people in need is actually far higher than previously estimated is a choice that will take a lot of political will — so don’t be surprised if there is no hurry to make the transition to a more accurate poverty measure.