INCOME POVERTY IN NEW YORK CITY
The Supplemental Poverty Measure (SPM) Every September, the U.S. government releases the latest results on national poverty using the Official Poverty Measure (OPM). The OPM was developed in the 1960s and compared families’ total before-tax cash income with a poverty line, or threshold. The threshold was defined as three times the cost of a minimally adequate food budget during that time. With the exception of some minor adjustments, this measure has only been updated annually to account for changes in inflation. Over time, this formula has become increasingly outdated. Food costs have become less important in family budgets, while things like housing and child care have become costlier. A focus on before-tax cash income ignores benefits that many families receive through the tax system, such as the Earned Income Tax Credit, or in noncash form, such as food stamps or housing vouchers. Importantly, the poverty threshold under the OPM does not vary with costs of living, particularly housing costs, which are notoriously high in New York City. The SPM improves the measurement of poverty on all of these fronts. The poverty threshold is based on contemporary spending on food, as well as on other necessities like clothing, shelter, and utilities. The poverty threshold in places like New York City is also higher given its higher-than- average housing costs, and the threshold is different for renters and homeowners. In 2022, the SPM threshold for a two-adult, two-child family of renters in New York City was $43,890. In the SPM, tax credits and noncash benefits are also counted as income, and for families who incur them, medical, work, and child care costs are subtracted from income. The Poverty Tracker collects all the requi- site data necessary to directly calculate the SPM in its sample of New Yorkers, and this data forms the basis of our income poverty statistics. The Poverty Tracker measures poverty in New York City using the SPM. The New York City government also tracks trends in the city’s poverty rate using the NYCgov Poverty Measure. There are slight differences between the construction of the SPM and the NYCgov Poverty Measure, thus they produce slightly different annual poverty rates. The differences between the NYCgov Poverty Measure and the SPM are discussed in the NYCgov Poverty Measure annual report. 5
5 Learn more about the NYCgov Poverty Measure at https://www1.nyc.gov/site/opportunity/index.page
8 THE STATE OF POVERTY AND DISADVANTAGE IN NEW YORK CITY VOL. 6
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