The National Center for Children in Poverty is associated with Columbia University’s Mailman School of Public Health. Just last month (June 2008) the Center released an important new report, Measuring Poverty in the United States. The report found that:

Across the country, families typically need an income of at least twice the official poverty level ($42,400 for a family of four) to meet basic needs. In high-cost cities such as New York, it may take an income of over three times the poverty level to make ends meet, whereas in some rural areas, the figure may be under double the poverty level

The findings are particularly important for Alaska which is a “high-cost” area to live. Here is a bit more detail about the report, and you can read the full report by clicking on the link above:

The current poverty measure was established in the 1960s and is now widely acknowledged to be flawed. It was based on research indicating that families spent about one-third of their incomes on food – the official poverty level was set by multiplying food costs by three. Since then, the figures have been updated annually for inflation but have otherwise remained unchanged.

The current poverty measure is flawed in two ways.

1. The current poverty level – that is, the specific dollar amount – is based on outdated assumptions about family expenditures.

Food now comprises only one-seventh of an average family’s expenses, while the costs of housing, child care, health care, and transportation have grown disproportionately. Thus, the poverty level does not reflect the true cost of supporting a family. In addition, the current poverty measure is a national standard that does not adjust for the substantial variation in the cost of living from state to state and between urban and rural areas.

More accurate estimates of typical family expenses, and adjustments for local costs, would produce substantially higher dollar amounts.

2. The method used to determine whether a family is poor does not accurately count family resources.

When determining if a family is poor, income sources counted include earnings, interest, dividends, Social Security, and cash assistance. But income is counted before subtracting payroll, income, and other taxes, overstating income for some families. On the other hand, the federal Earned Income Tax Credit isn’t counted either, underestimating income for other families. Also, in-kind government benefits that assist low-income families – food stamps, Medicaid, and housing and child care assistance – are not taken into account. This means that official poverty statistics cannot be used to analyze the effectiveness of these programs.