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Commentary: Measure of Being Poor in Virginia

I have always maintained that the poor in Northern Virginia are worse off than others living in less affluent parts of the state because the cost of living is higher in this region. The difference can be most clearly seen in the cost of housing; and there have been many notable efforts on the part of local governments to increase the stock of workforce, affordable housing. The traffic coming into Northern Virginia from the west and south is made up largely of people who cannot afford housing in the area.

Oddly, the official poverty measure that has been used to calculate the official poverty rate has been a one-size-fits-all statistic that does not account for regional differences in the cost of living. That situation is about to change with the introduction of the Virginia Poverty Measure (VPM) by the Weldon Cooper Center for Public Service at the University of Virginia (www.coopercenter.org). These are the professionals who maintain all the demographics of Virginia’s population and who produce official population estimates upon which many programs are funded and decisions are made. Their work follows that done in other states and by other agencies seeking to get a more accurate measure of poverty.

The Virginia Poverty Measure takes into account regional differences in the cost of living, updated consumer patterns, government programs that affect family income, taxes and credits, and health care costs. While the formula to arrive at a realistic number that reflects poverty-level living conditions is more complex, it is also likely to be more realistic as to actual experiences of individuals. Those interested in the details of the calculations are encouraged to review the full report “The Virginia Poverty Measure: An Alternative Poverty Measure for the Commonwealth” at http://www.coopercenter.org/sites/default/files/publications/VirginiaPovertyMeasure_May2013.pdf.

The introduction of the VPM brings some significant changes to our understanding of poverty. Under the Virginia Poverty Measure, Northern Virginia counties and cities with some of the highest median incomes in the nation are shown to have a significantly greater extent of economic deprivation than what official poverty statistics suggest. The inside the beltway official poverty rate goes from 7.4 percent to 12.3 percent under the VPM. Fairfax goes from 6.4 percent to 9.7 percent. In contrast, Southwest Virginia goes from an official rate of 21 percent to 16 percent. The main explanation for the change is taking into account differences in cost of living and the existence of programs to relieve poverty. Calculation of the new rate found that fewer children are in poverty, dropping from 15.6 percent to 13 percent. Under the Virginia Poverty Measure, more Virginians are in “near poverty” and fewer are in “deep poverty.”

To the degree that the new methodology creates a better understanding of the existence of poverty, it will be a challenging task for policy makers to incorporate this information into budget and program decisions. Presumably there could be a shift of resources among the regions of the state, and such changes can create winners and losers. The new numbers should be a wake-up call to wealthy Northern Virginians that there are more in need among us than we had previously thought to be the case. The new method of measuring poverty is an important new tool for policymakers.