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The CEO POVERTY MEASURE

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

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The CEO POVERTY MEASURE

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  1. The CEO POVERTY MEASURE Association of Public Data Users September 2010

  2. 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

  3. 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) CEO Application of NAS Method 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)

  4. 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

  5. Alternative ThresholdsTwo Adult, Two Child Family, 2008 Source: US Bureau of the Census and US Dept. of Housing and Urban Development

  6. 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

  7. 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

  8. 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

  9. Alternative Resource MeasuresAt the 20th Percentile, 2008 Source: Tabulated from the American Community Survey PUMS as augmented by CEO.

  10. Alternative Poverty Rates for NYC,By Age, 2008 Source: Tabulated from the American Community Survey PUMS as augmented by CEO.

  11. Effect of Additional ResourceMeasures On 2008 Poverty Rates, by Age Group Percentage Point Change in Poverty Rates Due to: Source: Tabulated from the American Community Survey PUMS as augmented by CEO.

  12. Change in NYC Poverty Rates,2005-2008 Source: Tabulated from the American Community Survey PUMS as augmented by CEO.

  13. Rise in CEO Threshold OutpacesGrowth in Income Source: Income and poverty rates are tabulated from the American Community Survey PUMS as augmented by CEO.

  14. Rise in Poverty Thresholds Over Time Source: US Bureau of the Census and NYC Center for Economic Opportunity.

  15. 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

  16. For More Information • CEO Poverty Measurement Reports: http://www.nyc.gov/ceo/ • Mark Levitan, Director of Poverty Research: levitanm@hra.nyc.gov

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