OPINION: New poverty numbers for SD aren’t what they seemMore than one in 10 South Dakotans have incomes below the poverty level.
By: Joy Smolnisky, Guest columnist
The official poverty rate in South Dakota averaged 14.5 percent from 2009 to 2011.
A new poverty rate released by the U.S. Census Bureau — the Supplemental Poverty Measure — averaged 11 percent.
That is a decrease of about 3.5 percentage points, or 28,000 people — a 25 percent drop in the number of South Dakotans living in poverty during the time period
What happened? Did South Dakotans suddenly get richer? No.
Rather, the U.S. Census Bureau’s new Supplemental Poverty Measure released in November more accurately reflects contemporary social and economic realities, and government policy.
“There are several important differences between the official and supplemental poverty measures,” said Kathleen Short, a U.S. Census Bureau economist and the report’s author.
“For instance, the supplemental measure uses new poverty thresholds that represent a dollar amount spent on a basic set of goods adjusted to reflect geographic differences in housing costs. The official poverty thresholds are the same no matter where you live.”
There are two other major differences as well. The official measure includes only pre-tax money income.
Income for the supplemental measure adds the value of in-kind benefits such as the Supplemental Nutrition Assistance Program, school lunches, housing assistance and refundable tax credits like the earned income tax credit.
Additionally, supplemental poverty measure resources deduct from income necessary expenses for critical goods and services such as taxes, child care and other work-related expenses, and contributions toward the cost of medical care and health insurance premiums or medical out-of-pocket costs.
Why should South Dakotans and their policy makers pay attention to the state Supplemental Poverty Measure?
It creates a clearer picture of economic reality for South Dakotans and a clearer picture of how local cost-of-living and government policies impact that reality.
After taking these factors into account, 88,000 South Dakotans (more than 1 in 10) still have incomes below poverty.
Joy Smolnisky is the director of the South Dakota Budget and Policy Project.