The economic downturn and the high cost of living in California has left many families caught in the middle — they do not have enough money to make ends meet yet are not considered "poor" enough to qualify for many safety-net programs.
How do policy makers gauge economic security and address poverty in California?
A new Center policy brief highlights results from a broad survey of the California legislature on the data and information they use to understand poverty in their districts and finds that most prefer data that is tailored to their local constituencies, and takes into account current costs for basic living expenses, rather than just income or spending patterns.
However, currently legislators are often required to use the Federal Poverty Level (FPL) when they are making recommendations about policy and evaluating programs for low-income populations. Yet, the FPL does not reflect the actual income needed for basic living expenses in high cost-of-living states like California.
Instead, the FPL — a measure created in the 1960s that is based on 1950s spending patterns and is adjusted yearly with the Consumer Price Index — establishes a single national amount of income as the official measure of poverty, leaving many struggling individuals invisible to policy makers.
For example, while the annual FPL amount is $15,130 for a couple in 2012, the actual cost of living for a two-person household in the state can be two to three times that amount, according to the Elder Economic Security Standard Index, a newer measure of poverty calculated by the Center. (The Elder Index shows how much it costs retired older adults to cover all of their most basic needs such as food, housing, health care, and transportation.)
The result: Two out of five older adults (ages 65 and over) are undercounted as poor, according to the Elder Index. Other research suggests that one out of five nonelderly adults (ages 18–64) are also not counted as poor.
Although many legislative staff members use the FPL, they ranked "an economic measure based on 1950s spending," which is the basis for the FPL, as their least preferred economic measure. Instead, they prefer data that is tailored to their local constituencies, and takes into account current costs for basic living expenses, rather than just income or spending patterns.
Measures of poverty that would more accurately meet legislators’ preferences include the Elder Index, the Family Economic Self-Sufficiency Standard, and the U.S. Census Supplemental Poverty Measures.
“The legislature relies on the FPL to comply with federal requirements for a variety of social programs,” said D. Imelda Padilla-Frausto, the study’s lead author. “However, having additional data could be useful to capture the complexity of the current social and economic reality in California and could help protect California’s most vulnerable populations.”
As a first step in the right direction, in 2011, California legislators passed into law AB 138, she noted. The law requires the California Department of Aging and local area agencies on aging to use the Elder Index as a guide in crafting statewide and local area plans.
Read the policy brief: The Federal Poverty Level Does Not Meet Data Needs of the California Legislature.