Senator John Kennedy (R-LA) has introduced legislation that would require the U.S. Census Bureau to publish an alternative poverty measure alongside the Official Poverty Measure (OPM) in its annual poverty report. The bill would mandate inclusion of the Congressional Budget Office's more comprehensive poverty metric, which accounts for both cash and non-cash government transfers including the Earned Income Tax Credit, Medicaid, food stamps, and housing subsidies — all of which the OPM currently excludes.

The legislative push draws support from a recent National Bureau of Economic Research paper by economists Richard Burkhauser and Kevin Corinth, who developed a 'full-income' poverty measure tracking poverty rates back to 1939. Their analysis found that the full-income poverty rate stood at 3.7 percent in 2023 — dropping to 1.6 percent when employer-provided health insurance is included — compared to the OPM's reported 11.1 percent for the same year.

The Burkhauser-Corinth research presents a historically pointed finding: from 1939 to 1963, the period preceding President Lyndon Johnson's Great Society programs, absolute full-income poverty fell by 29 percentage points, from 48.5 percent to 19.5 percent. In the six decades following 1963, despite an estimated $20 trillion in federal anti-poverty expenditures, poverty declined by only 15.7 percentage points.

The researchers also distinguish between the drivers of poverty reduction across these two periods. From 1939 to 1959, market income — wages, salaries, and employment-based earnings — accounted for nearly the entirety of poverty reduction, falling 26.1 percentage points within an overall 27.3-point decline. From 1967 to 2023, market income poverty fell by only 3.9 percentage points, while post-tax, post-transfer poverty fell by 10 percentage points, indicating that government transfers, rather than earned income, became the primary mechanism of poverty reduction.

The analysis further notes that the share of working-age adults relying on government transfers for more than half their income declined slightly from 2.9 percent in 1939 to 2.7 percent in 1959, but had risen to 7.6 percent by 2023, reaching as high as 15 percent in some intervening years.

Mercatus Center scholar Jack Salmon is quoted in the source article stating: 'The War on Poverty changed the how of poverty reduction, but it didn't accelerate the how much.'

The article, authored by Tyler Turman and published via TheDailyEconomy.org and aggregated by ZeroHedge, also cites Fraser Institute research indicating that jurisdictions with higher economic freedom tend to exhibit greater income mobility among low-income households and lower levels of food insecurity. The piece references global data showing that economic liberalization helped lift approximately one billion people out of extreme poverty between 1990 and 2010.

Critics of the OPM have long argued that the measure, established in the 1960s, is methodologically outdated, while defenders of existing welfare programs contend that transfer payments provide an essential floor preventing deeper material deprivation, particularly for populations facing structural barriers to employment.

Source: https://www.zerohedge.com/personal-finance/measuring-poverty-correctly-reveals-hard-truth-about-welfare-state