On September 14th, the Census Bureau will report the official poverty rate for 2020. In a typical year the poverty rate receives widespread attention as a key indicator of well-being in the United States. This year’s report is especially important given the toll COVID-19 took on American families in 2020, and because it comes on the heels of the lowest poverty rate ever recorded in 2019.
Unfortunately, the official poverty measure will not provide an accurate assessment of deprivation in 2020, or in any other year, because it has widely recognized flaws. For example, it omits key resources such as food stamps and refundable tax credits directed at low-income families.
Many analysts will instead highlight the supplemental poverty measure that the Census Bureau reports alongside the official measure. That is a mistake. Despite making certain improvements such as including the value of non-cash benefits like food stamps and adjusting for taxes, the supplemental poverty measure suffers from flaws of its own.
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