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The US Census Bureau yesterday announced a change in the way it defines poverty, updating the criteria used since 1963. The new definition classifies 49 million American as living in poverty, which translates into 3 million more poor Americans than previously measured. A Census Bureau report on the change says this new way of measuring disposable income was born of much criticism of the old standard, and decades of research. A 1995 panel study by the National Academy of Sciences found the Bureau’s old measure did not account for major household expenses, including medical costs and those tied to employment, such as transportation and child care costs. A 2010 Working Group made further suggestions for these new criteria, called the Supplemental Poverty Measure. The Supplemental Poverty Measure, or SPM is not replacing the old standard, but according to the Census Bureau, will “[b]e an addition macroeconomic statistic providing further understanding of economic conditions and trends.” The results of this new analysis are surprising. The Christian Science Monitor reports that the inclusion of benefit programs, like food stamps in the new calculations puts poverty rates for African American on the decline, while, “[r]evealing greater poverty trends among Asians, Hispanics, whites and the elderly.” Conservatives are criticizing the new system saying the inclusion of government assistance programs is pure political strategy to bolster support for the Democrats’ agenda. A spokesman for the Heritage Foundation, and former member of President Clinton’s welfare reform team, called the change, “a trojan horse” employed to usher in wealth redistribution.

GUEST: Shawn Fremstad, a senior research associate with the Center for Economic and Policy Research

Visit www. cepr.net.