Is there a better way to measure poverty? Yes.

New York City has found a better way. In 2006, New York Mayor Michael Bloomberg tasked his Commission for Economic Opportunity to develop new ideas for fighting poverty in the city. In addition to its program recommendations, the commission called for a reformulation of the poverty measure for the five boroughs. The commission examined a number of alternative computations and worked with scholars at the National Academy of Sciences to adapt their proposed recalibration to the New York City context. Bloomberg's commission has evolved into the Center for Economic Opportunity, one of the nation's hothouses of anti-poverty innovation. The CEO has constructed a new poverty measure for New York City. On the expense side, the measure takes into account the costs of food, housing, child care, utilities, and clothing, among other necessities. And on the resources side, the measure takes into account income that ranges from after-tax earnings and welfare supports to housing vouchers, tax credits, public health insurance, and other in-kind supports. Like its NAS model, New York City pegs the poverty threshold at approximately 80 percent of the median amount of what families require to meet these needs. Even within the city, the CEO incorporates regional differences in cost of living.

In July the Bloomberg administration unveiled its findings. (For the full report, click here.) Under the new count (which used the Census Bureau's 2006 American Community Survey Data), overall poverty in New York City increased to 23 percent of the population, over the official federal 19 percent level. This rise resulted largely from a newly formulated poverty line; the New York City measure calculated a $26,138 threshold for a family of four, nearly 30 percent higher than the $20,444 federal level.

However, the new measure allowed for more granular measurement: Within this overall increase, fewer people were "extremely poor" (below 50 percent of the CEO poverty threshold) than under the federal count because of housing assistance, food stamps, and tax credits. Similarly, the poverty rate for children living with a single parent decreased from 44.4 percent to 41.6 percent in large part because of the State Children's Health Insurance program. These dips suggest that policies aimed at poor children and the very needy have had some impact.

The new data also revealed some surprising increases in poverty across demographics: Poverty was up among non-Hispanic whites, Asians, and the foreign born. Two other changes were particularly notable. Under the official federal estimate, less than 20 percent of New Yorkers, or one in five, 65 or older are poor. Under the new calculus, one in three elderly New Yorkers is poor, largely because of high medical costs. The working poor were also worse off: For New Yorkers with full-time work, the new poverty rate jumped to 8.5 percent under the CEO measure from the official 3.6 percent federal statistic. There were also geographical nuances to the new data; poverty in the Bronx, for example, held steady while poverty in Queens was up 8 percent.

New York City is the first local government to put in place a reformed poverty yardstick, and it has the potential to go national. Linda Gibbs, New York's deputy mayor for Health and Human Services, speaks regularly at national urban policy conferences (at a December Brookings Institution discussion, she described herself as "the one with muddy boots on down in the trenches") and has shared data and technical advice with her counterparts in Los Angeles, San Francisco, Chicago, Seattle, and Philadelphia as well as with state officials from New York and California. Bloomberg met extensively with Rep. Jim McDermott of Washington, who in September introduced the Measuring American Poverty Act of 2008 in the U.S. House of Representatives. Later that month, Sen. Christopher Dodd of Connecticut introduced the Senate version of the legislation. Both bills were in committee at the close of the 2008 legislative session.

Although there has been some criticism of New York's poverty accounting—conservative policy analyst Doug Besharov calls it politically motivated for a Bloomberg third term and argues that the new data mask long-term gains against poverty—the clamor to revamp the federal measure has consistently come from both sides of the aisle. And although there will be debate between Democrats and Republicans about the details of any new threshold (to overgeneralize, Republicans are typically concerned about overstating poverty, Dems about understating it), the new Democratic majorities in the House and Senate bode well for both the McDermott and Dodd legislation.