November 16, 2021
Every September, the Census Bureau releases income estimates for the prior year, including estimates of the number of people who are income poor according to two different measures: the Official Poverty Measure (OPM) and the Supplemental Poverty Measure (SPM). These annual releases, which rely on the Current Population Survey (CPS), include poverty rates for whites, Blacks, Asians, and Hispanics, but not for Native Americans. The Census Bureau does include poverty rates for American Indians and Alaska Natives in certain tables on its website. However, these tables receive much less attention than the annual poverty reports using the CPS and are limited to OPM poverty rates calculated using the American Community Survey.
The Official Poverty Measure (OPM) is widely regarded by experts as the federal government’s worst statistical indicator. It combines an anachronistic poverty line, which has defined poverty down over the last half century, with an income definition that fails to take account of the benefits provided by major social assistance programs like the Supplemental Nutrition Assistance Program (SNAP), housing assistance, and the Earned Income Tax Credit (EITC). The SPM takes these benefits into account as well as some work expenses and out-of-pocket medical expenditures. In most respects, the SPM improves on the OPM, so it is unfortunate that the Census Bureau does not publish SPM poverty estimates as part of its annual reports on poverty and income.
In this article, we take a first step toward addressing this problem by calculating poverty rates for Native Americans using the SPM. We define “Native American” in the same way as Gabriel R. Sanchez, Robert Maxim, and Raymond Foxworth do in a recent Brookings Institute blog post on how the federal government’s monthly jobs report does not include Native Americans:
“. . . we use all Native American racial combinations, not just workers identifying as American Indian and Alaska Native alone. This distinction is important because, according to the Census Bureau, 61% of Native Americans identify as two or more races—the highest rate of any census-defined racial group—a function of 400-plus years of colonization and displacement.”
We also use the term “Native American” because, as Sanchez and his colleagues note, “survey research consistently finds that this population prefers this pan-ethnic term.”
Figure 1 shows SPM poverty rates for Native Americans and White, non-Native, non-Hispanics from 2014 to 2020.
Over this six-year period, the annual SPM poverty rate for Native Americans is roughly 1.75 to 2 times as high as it is for white, non-Native, non-Hispanics. The poverty rate declines gradually for both groups in the first few years and then more sharply in the latter years.
About one-third of Native Americans also self-identify as white. Table 1 compares their SPM poverty rates with those of Native Americans who do not self-identify as white. On average, over this entire period, the poverty rate for Native Americans who do not identify as white was about 4 percentage points higher than it was for Native Americans who also identify as white.
|Native American and White
|All Other Native Americans
Source: CEPR estimates using IPUMS-CPS.
Figure 2 compares SPM poverty rates (averaged over the entire period) by gender and age. Both Native American women and men (age 16 and over) have poverty rates that are nearly twice as high as poverty rates for white, non-Native women and men. Poverty rates for Native American children (18.5 percent) and young adults (20.2 percent) are somewhat higher than for Native American adults ages 30–59 (17 percent) and age 60 and over (17.7 percent).
While these estimates take an initial step toward providing a more accurate measure of poverty among Native Americans, it is important to note that the SPM has limitations. In particular, the SPM uses a poverty line that does not provide a reasonable measure of the income needed not to live in poverty today. In many respects, the SPM continues to reflect a 1960s or even earlier understanding of poverty, rather than a contemporary one that includes the income needed to maintain one’s health and social well-being, meet children’s development needs, and participate in community activities.
Moreover, it is unclear whether the Census Bureau, the Bureau of Labor Statistics, or other federal agencies involved in the development of the SPM have meaningfully consulted with Native Americans or tribal governments on the SPM or other indicators of poverty and material hardship. By contrast, when the Canadian government recently adopted a “market-basket” measure of poverty as its official poverty line, it committed to “consult with Indigenous persons to identify and co-develop indicators of poverty and well-being, including non-income-based measures of poverty, that reflect the multiple dimensions of poverty and well-being experienced by First Nations, Inuit and Métis.”
The Census Bureau should report income and poverty data for Native Americans in its annual reports on income and poverty starting in September 2022. Before then, the Office of Management and Budget and the Census Bureau should consult with Native Americans and Native nations on how best to report income and poverty data for Native Americans. Additional federal resources should be provided to improve the accuracy and reliability of Native American income and poverty statistics.
The authors thank Algernon Austin and Hayley Brown for their assistance.