The official U.S. poverty rate fell last year for the first time since 2006, dipping to 14.5 percent, according to a new annual report by the Census Bureau. For the past several years, it had hovered around 15 percent. In total, 45.3 million Americans lived under the poverty line during 2013, including some 14.7 million children.
The official poverty rate is sometimes criticized as unreliable because of its odd origins and narrow definition of income. The statistic was basically MacGyvered into existence in the 1960s by a lone Social Security Administration economist who based it on cost of food for a family of three, since that was just about the only data on living standards she had to work with. Since then, the stat has only really been updated for inflation. While it counts cash payments such as Social Security towards a family’s finances, it doesn’t account for benefits such as food stamps. As a result, it vastly understates the decline of material need in America over the decades.
That said, it does provide a decent snapshot of poverty as it exists today. For several years, Census researchers have been honing an alternative statistic known as the Supplemental Poverty Measure, which takes into account more government benefits along with geographical variations in the cost of living for a much more sophisticated approach to quantifying need. But in 2011, the SPM was only 1 percentage point higher than the cruder, official measure we've been using since the Johnson days.
In short, poverty has been high for years now, and its persistence has been one of the clearest indicators of the weaknesses of the economic recovery. Last year’s drop, while welcome news, came far too late.