Social Impact Research Center
at Heartland Alliance
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Any time data are collected there is a time lag before it is publicly released. Sometimes the lag is short—unemployment data are released just a month or two after being collected—and other times the lag is longer—poverty estimates are generally released about 9 months into the next year after they are collected. The Report on Illinois Poverty and this website use the most timely data sources available for the types of geographies and comparisons we make, and at the time they are released, they are the most accurate available (sometimes sources go back and correct errors).
There are a number of sources that provide poverty estimates. These sources each differ slightly in regards to the geographies they have estimates for and the time period they reference. The data source we use for any given purpose is driven, among other things, by whether we need comparable data for all counties in Illinois or not. The American Community Survey, which surveys a sample of the entire population, is the preferred data source for sub-national estimates of poverty. This is the source used for the vast majority of poverty estimates in the Report on Illinois Poverty, including estimates for the Chicago region counties. However, single-year estimates—currently for the year 2011—are not available for counties with populations below 65,000. So we must use another source, the Small Area Income and Poverty Estimates program, which uses data collected as part of the ACS and combines it with other data sources, like tax information, food stamp usage, and decennial census data to generate comparable poverty and income estimates for all counties.
To learn more about various sources of poverty estimates, visit: http://www.census.gov/hhes/www/poverty/about/datasources/description.html
The most current poverty estimates reflect the year 2011. Poverty is measured in terms of percents of the federal poverty level (FPL): 100% FPL is the poverty threshold, 50% FPL is half the poverty threshold, and 200% is twice the poverty threshold. The federal poverty thresholds in 2011 were:
|Family Size||100% FPL||50% FPL||200%FPL|
Calculating poverty estimates involves tallying up a family’s annual income and determining if the amount falls below the poverty threshold for the family’s size. If the annual income does fall below the threshold, then the family and every individual in it is considered to be in poverty. Non-relatives, such as housemates, do not count. The official poverty thresholds do not vary geographically and are updated each year for inflation.
Money income used to compute poverty status includes the following (before taxes, noncash benefits and capital gains/losses do not count): earnings, unemployment compensation, workers’ compensation, Social Security, Supplemental Security Income, public assistance, veterans’ payments, survivor benefits, pension or retirement income, interest, dividends, rents, royalties, income from estates and trusts, educational assistance, alimony, child support assistance from outside the household, and other miscellaneous sources.
The poverty measure is outdated and is generally agreed to understate the degree of actual material deprivation. The federal poverty threshold was established in the 1960s using 1955 food costs as its basis. Since then, food costs consume much less of a family’s budget than they did half a century ago and other costs have ballooned, such as health care and housing. The result is a measure that is not in any way an indication of what families need to get by since it is not based on a market basket of all basic needs and its methodology is “frozen.” Instead, it is a measure of severe income deprivation. Many experts agree that it takes an income of around two to three times the poverty line to pay for a family’s most basic expenses.
As a longitudinal measure, the poverty measure has some value. However, there are other pitfalls of the federal poverty measure that have made it decline in usefulness as a true measure of hardship. First, the measure assumes a one-worker family with a stay-at-home mom, which is no longer the norm. So certain costs are left out (i.e., child care). Second, the FPL does not vary based on the cost of living in different places of the country. Finally, the FPL does not include some income (in-kind benefits) and does not capture the impact of work supports, making it difficult to get a true picture of how families are helped by such programs.
On November 7, 2011, the U.S. Census Bureau released the Research Supplemental Poverty Measure (SPM), developed based on recommendations from the National Academy of Sciences (NAS) Panel on Poverty and Family Assistance. The Supplemental Poverty Measure is an effort to build on the current federal poverty measure—which many experts agree is outdated and underestimates poverty—and take into account the impact of government benefit programs and tax credits to obtain an improved understanding of the economic well-being of American families and of how federal policies affect those living in poverty.
- The official poverty measure, which has been in use since the 1960s, largely estimates poverty rates by looking at a family’s or an individual’s cash income. It will remain the definitive statistical measure.
- The supplemental measure is a more complex and refined statistic, including such additional items as tax payments and work expenses in estimating family resources. The supplemental measure will not be the measure used to estimate eligibility for government programs. Instead, it is an additional macroeconomic statistic, providing further understanding of economic conditions and trends.
- “The new supplemental poverty measure will provide an alternative lens to understand poverty and measure the effects of anti-poverty policies,” Department of Commerce Under Secretary for Economic Affairs Rebecca Blank said. “Moreover, it will be dynamic and will benefit from improvements over time based on new data and new methodologies.”
To learn more about the Supplement Poverty Measure, visit: http://www.census.gov/hhes/povmeas/methodology/supplemental/research.html
Good data should be the backbone of all decision making. Many different audiences use the Report on Illinois Poverty to understand poverty in their communities. Funders use it to make wise investments, services providers use it to gain deeper (or more current) insights into their target populations, legislators use it to influence legislative decisions, and local leaders use it to prioritize poverty-related issues in their planning.
During the 2008 Illinois legislative session, the From Poverty to Opportunity Campaign, coordinated by Heartland Alliance, advocated for the creation of the Commission on the Elimination of Poverty—the country's first commission on ending poverty consistent with international human rights standards. The Commission is comprised of elected officials, leaders from a variety of social service, business, and other sectors, as well as people experiencing poverty.
The poverty commission is a vehicle for the state to coordinate its efforts in good times and in bad so that the most vulnerable are not left out of the equation. The commission has created a substantive plan to cut the number of Illinoisans in extreme poverty in half by the year 2015, which was released in December 2010. The current economic downturn speaks all the more to the need for the state to have a plan in place with real goals and benchmarks. The plan addresses specific issues that have a direct role in poverty, including housing, health care, nutrition, employment, education, transportation, child care, and income supports. Such a concerted, deliberate effort can help make strong, safe, and stable communities across Illinois that are poverty free.
To learn more about the Illinois Commission on the Elimination of Poverty, visit: http://www2.illinois.gov/poverty/Pages/default.aspx
The Social IMPACT Research Center at Heartland Alliance conducts applied research in the form of evaluations, data services, and studies for nonprofits, advocacy groups, foundations, governments, and coalitions to help them inform and improve their work. IMPACT also regularly reports on key trends releated to poverty so that decision makers better understand how to address it through programs and public policy. To learn more about the Social IMPACT Research Center, visit: http://www.heartlandalliance.org/research/.
Heartland Alliance believes that all of us deserve the opportunity to improve our lives. Each year, we help ensure this opportunity for more than one million people around the world who are homeless, living in poverty, or seeking safety. Our policy efforts strengthen communities; our comprehensive services empower those we serve to rebuild and transform their lives. To learn more about Heartland Alliance, visit: http://www.heartlandalliance.org/.
Learn about our Data Services and Subscriptions and submit a request here: http://www.heartlandalliance.org/research/services/data-services-and.html