JBHE: Latest News for 6/19/08

Stanford University Develops New Measure of Poverty

Ever since the federal government calculated the nation’s poverty rate more than 40 years ago, black families have on average been three times as likely to be poor. But now researchers at Stanford University state that the official government poverty rate does not present an accurate measure of the nation’s poor.

The Stanford Center for the Study of Poverty and Inequality is planning to construct a new measure of the nation’s poverty rate which it will publish on a regular basis as an alternative to the federal government’s official poverty rate.

The official government poverty rate, which was established in 1963, uses only income figures, family size, and family composition to calculate which families are in poverty. But Stanford researchers believe that they can more accurately calculate poverty by including such factors as food stamp allocations, tax credits, federal housing subsidies, home heating costs, childcare needs, and commuting expenses.

David Grusky, director of the Stanford Center, says that “the current index is a statistical fabrication that doesn’t authentically represent the real economic circumstances of families. The objective is to create a more accurate measure, not one that necessarily yields a higher poverty count. If you don’t have a good measure of poverty, you are operating in the dark and can’t make good policy decisions.”