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The CEO POVERTY MEASURE. Association of Public Data Users September 2010. CEO’s Mandate, Direction, & Key Challenge. Create a more useful tool for policymaking Adopt National Academy of Sciences’ (NAS) recommendations Employ American Community Survey Large annual sample for NYC - PowerPoint PPT Presentation
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The CEO POVERTY MEASURE
Association of Public Data UsersSeptember 2010
CEO’s Mandate, Direction, & Key Challenge
• Create a more useful tool for policymaking
• Adopt National Academy of Sciences’ (NAS) recommendations
• Employ American Community Survey– Large annual sample for NYC
– But ACS does not include much of what is needed to measure family resources as recommended by NAS
Thresholds based on a percentage (80.5) of median annual reference family expenditures for these necessities:
– Food– Clothing– Shelter– Utilities
• Plus a little more for miscellaneous expenses (x 1.2)• Adjusted for inter-area differences in housing costs (via HUD Fair Market Rents)
Resources based on annual income available to family to obtain items in threshold including:
– Cash Income, after-taxes– Value of in-kind subsidies for
food– Adjustment for Housing
Status– Deduction for work-related
expenses (child care and transportation)
– Deduction for medical out-of-
pocket expenses (MOOP)
CEO Application of NAS Method
Creation of the CEO Poverty Threshold Reference Family (Two adults, Two children), 2008
Source: US Bureau of the Census and US Dept. of Housing and Urban Development
NAS Threshold for U.S. (FCSU-CE) $24,755
Shelter & Utility Share, 44% = $10,892
Non-Shelter & Utility Share, 56% = $13,863
Shelter & Utility Share, Adjusted for Ratio of NYC/US Fair Market Rent (1.52) =
$16,556
CEO Threshold: Adjusted Shelter &
Utility Share + Non-Shelter & Utility Share = $30,419
Alternative ThresholdsTwo Adult, Two Child Family, 2008
Source: US Bureau of the Census and US Dept. of Housing and Urban Development
$21,834$24,755
$30,419
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Official U.S. wide NAS NYC CEO
Measurement of Family Resources (1)
• Pre-tax cash– Source: ACS
• Taxation– Federal Payroll Taxes– Federal, State, City Income tax liabilities and credits– Source: CEO Tax Model
• Cash-Equivalent Value of Nutritional Assistance– Food Stamps– Source: ACS, Administrative records– School Lunch Program– Source: ACS, Program rules, Census valuation of
meals
Measurement of Family Resources (2)
• Adjustment for Housing Status
– Households do not require same level of expenditures to obtain housing of similar size and quality
– Adjustment: If household is living in public housing, receives a tenant-based subsidy, resides in a rent controlled apartment or owns its home free and clear, then add to family income:
Shelter and Utility portion of threshold – out-of-pocket expenditures for these items
– Source: NYC Housing and Vacancy Survey
Measurement of Family Resources (3)
• Work-Related Expenses– Cost of commuting– Source: ACS and transportation agency data– Cost of child care– Source: Survey of Income and Program
Participation
• Medical Out-of-Pocket Expenses– Source: Medical Expenditure Panel Survey
Alternative Resource MeasuresAt the 20th Percentile, 2008
Source: Tabulated from the American Community Survey PUMS as augmented by CEO.
$25,149
$29,138
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Pre-tax Cash CEO Income
Alternative Poverty Rates for NYC, By Age, 2008
17.6
26.3
14.617.6
22.0
26.0
19.3
28.5
0
5
10
15
20
25
30
All Persons Children under 18 Adults, 18 thru 64 Adults, 65 and older
Per
cent
OFFICIAL CEO
Source: Tabulated from the American Community Survey PUMS as augmented by CEO.
Effect of Additional Resource Measures On 2008 Poverty Rates, by Age Group
Source: Tabulated from the American Community Survey PUMS as augmented by CEO.
Percentage Point Change in Poverty Rates Due to:
All Under 18 18 thru 64 65 & olderNet Taxation -1.4 -5.5 -0.1 -0.8Nutritional Assistance -2.2 -4.1 -1.6 -1.9Housing Assistance -5.7 -9.1 -4.7 -5.0Work-related Expenses 2.4 4.0 2.2 0.6Medical Expenses 3.4 3.2 3.0 6.5
Change in NYC Poverty Rates,2005-2008
20.6 21.2 22.2 22.019.1 18.9
17.7 17.6
0
5
10
15
20
25
2005 2006 2007 2008
Perc
ent
CEO NYC OFFICIAL NYC
Source: Tabulated from the American Community Survey PUMS as augmented by CEO.
Rise in CEO Threshold OutpacesGrowth in Income
2005 2008 ChangeCEO Threshold $24,353 $30,419 24.9%CEO Income
20th percentile $24,054 $29,138 21.1%CEO Poverty Rate 20.6% 22.0% 1.4
Official Threshold $19,806 $21,834 10.2%Pre-tax Cash Income
20th percentile $21,499 $25,149 17.0%Official Poverty Rate 19.1% 17.6% -1.5
Source: Income and poverty rates are tabulated from the American Community Survey PUMSas augmented by CEO.
Rise in Poverty Thresholds Over Time
1.00
1.20
1.40
1.60
1.80
1994
=1.
00
OFFICIAL CEO-NYC
Source: US Bureau of the Census and NYC Center for Economic Opportunity.
Measuring Poverty in the Recession
• When the economy contracts:– Earned income plummets.– Increases in income from the safety net do not fully
replace this decline.– Total pre-tax cash income falls and the official poverty
rate rises.
• What will happen to CEO income?– Increased participation and benefit levels in Food
Stamp program– Expansion and creation of new tax credits– This makes change in total income harder to predict
For More Information
• CEO Poverty Measurement Reports: http://www.nyc.gov/ceo/
• Mark Levitan, Director of Poverty Research: [email protected]
