Public investments reduce child poverty rate

A new report released today by the Annie E. Casey Foundation shows that the federal KIDS_COUNT_DS_SPM_cover150px
government’s official poverty measure created in the 1960s uses outdated information on how U.S. families are faring today, failing to illustrate the effect of programs designed to help them.  The new KIDS COUNT® Data Snapshot, Measuring Access to Opportunity in the United States, points to a better index for measuring poverty – the Supplemental Poverty Measure (SPM) – which captures the effect of public investments and tax policies on children and families.

By using the SPM, the data show that without any government interventions, Maine’s child poverty rate would more than double from 12 percent to 27 percent. However, 31,000 Maine kids still lived in poverty as measured by the SPM. Nationally, the report shows that public investments kept 11 million children out of poverty.

The Supplemental Poverty Measure, created by the U.S. Census Bureau in 2011, factors in the impact of a number of social programs such as the Supplemental Nutrition Assistance Program (SNAP) and the Earned Income Tax Credit (EITC) and takes into account rising costs and other changes that affect a family’s budget. The SPM also provides a more accurate assessment of poverty levels on a state and regional basis. It helps illustrate, for instance, the variations in the cost of living and the impact of federal programs from one state to the next.

 “The official poverty measure does not provide the accurate information policymakers need to measure the success of anti-poverty programs – nationally and at the state-level,” said Patrick McCarthy, president and CEO of the Annie E. Casey Foundation. “Relying on this tool alone prevents policymakers from gauging the effectiveness of government programs aimed at reducing child poverty. Given that child poverty costs our society an estimated $500 billion a year in lost productivity and earnings as well as health and crime-related costs, the SPM is an important tool that should be used to assess state-level progress in fighting poverty.”

Measuring Access to Opportunity in the United States provides national and state-by-state data using the SPM to show the effect of a variety of supports to help low-income families. In a striking departure from official poverty rate data, the SPM shows that California has the highest child poverty rate, followed by Arizona and Nevada.

In every state, anti-poverty programs tracked by the SPM have led to a reduction in the child poverty rate. Because federal benefits are not adjusted for differences in regional costs of living, they are likely to have a more significant impact in states where the cost of living is relatively low. States and localities also vary in their contribution to the safety net programs and tax policies that can help move children out of poverty.

“This report confirms that we need to continue to invest in our children and families,” said Claire Berkowitz, the Maine Children’s Alliance executive director. “This measure speaks to the joint work of federal and state programs in improving the well-being of children. It is our hope that the SPM can help both federal and state decision makers understand how best to support the thousands of Maine children still growing up in families without sufficient economic resources.”

Measuring Access to Opportunity in the United States follows the Casey Foundation’s 2014 report, Creating Opportunities for Families: A Two-Generation Approach, which outlined additional recommendations for helping families raise themselves out of poverty that include:

  • Expanding access to high-quality early education;
  • Changing tax credit policies to help families keep more of what they earn;
  • Expanding and streamlining food and housing subsidies; and
  • Developing approaches that link programs for kids – like Head Start – with programs for their parents, such as education and job training.

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