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Poverty in the United States

As America is the wealthiest and most bountiful nation in the world, it is no surprise that many Americans think of hunger and poverty occurring only in developing countries. While most Americans have encountered someone suffering from hunger and poverty in the United States, few of us may have actually realized it. The face of hunger and poverty in the United States is quite different from the images we often see in developing nations. Rather than outright starvation or homelessness, the face of hunger is a child who is malnourished because her parents do not earn enough to buy healthy food and sometimes has to skip meals. The face of a poor person in the United States is a single parent who works full time, but still can’t afford to pay for food, rent, child care, medical bills, and the costs of transportation to work.

It is ironic that hunger and poverty still persist in the world’s wealthiest nation. In September 2009, the U.S. Census Bureau released 2008 data on poverty, incomes and health insurance coverage. According to the Census press release, real median household income in the United States fell 3.6 percent between 2007 and 2008, from $52,163 to $50,303. The Census data (and other sources) reveal trends in who lives in poverty in the U.S.:

Poverty

  • The number of people living in poverty, 39.8 million in 2008, was up about 2.5 million from 37.3 million in 2007. See below for definition of poverty.
  • The 2008 poverty rate of 13.2 percent compares with 12.5 percent in 2007.
  • For children under 18, the poverty rate increased from 18.0 percent in 2007 to 19.0 percent in 2008.
  • For state-by-state poverty data, see the Coalition on Human Needs page on using Census data.
  • The federal minimum wage was increased 70 cents in July 2009, the third of three steps to raise it from $5.15 an hour to $7.25 an hour.

Health Insurance

  • The number of people without health insurance coverage rose to 46.3 million in 2008, compared to about 45.7 million people in 2007.
  • The number of people covered by government programs such as Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) increased from 83.0 million to 87.4 million, while the number with private and employer-provided insurance declined.
  • Increased enrollment in government programs is likely the reason that the number of children without health insurance declined from 8.1 million (11.0 percent) in 2007 to 7.3 percent (9.9 percent) in 2008.

Other Data Sources

  • In July 2009, the Annie E. Casey Foundation released the 2009 Kids Count Data Book. The book profiles the well-being of America’s children on a state-by-state basis and ranks states on 10 key measures of child well-being.
  • The Economic Policy Institute has found that without government assistance, the United States ranks among the top four countries with the highest rates of child poverty.
  • A current indication of hunger is participation in the SNAP (Food Stamps). In June 2009, food stamp participation was a record 35.1 million persons, 6.4 million over June 2008. Yet, according to Food Research and Action Center, the program may be missing as many as four in ten eligible people.
  • Data from the U.S. Department of Agriculture (USDA) shows that the prevalence of food insecurity in 2007 was 11.1 percent of households compared to 10.9 percent in 2006. The prevalence of “very low food security” (formerly called “food insecurity with hunger”) in 2007 was 4.1 percent of households, little changed from 2006's 4.0 percent. See USDA Briefing Rooms. Food insecurity remained higher than in 1999–2001.

Racial and Ethnic Discrepancies

  • Census Bureau findings show that among the racial and ethnic groups, Black households had the lowest median income in 2008 ($34,218), compared to the median of $55,530 for non-Hispanic white households. The same survey shows that 24.7 percent of blacks were living in poverty compared to 8.6 percent of non-Hispanic whites.
  • United for a Fair Economy (UFE) released a report in January 2009 titled State of the Dream 2009: The Silent Depression. The report says that while America has been in recession for about a year, people of color are experiencing a depression, since they have been losing ground for more than five years.

Women

  • Poverty rates are higher for women than for men. In 2007, 13.8 percent of females were poor compared to 11.1 percent of males.
  • Women are poorer than men in all racial and ethnic groups. The 2007 poverty rates for women and men were, for African Americans, 26.5 percent compared to 22.3 percent; for Hispanics, 23.6 percent compared to 19.6 percent; for Asians, 10.7 percent compared to 9.7 percent; and for Whites, 11.6 percent compared to 9.4 percent.
  • Contrary to popular belief, the majority of poor women are not single mothers. Only a quarter of adult women with incomes below the poverty line are single mothers.

What is the official U.S. government measure of poverty?

All statistical measures of poverty are based on the poverty thresholds, the original version of the federal poverty measure. Poverty thresholds were originally created in 1963-1964, based on U.S. Department of Agriculture (USDA) data on the cost of basic foods, “food budgets designed for families under economic stress,” and the percent of income that low-income families spent on food. In the early 1960s, low-income families spent about 1/3 of their income on food, so, in a nut shell, the threshold was set at three times the cost of the USDA Thrifty Food Plan.

The thresholds are updated annually for inflation by the Office of Management and Budget using the Consumer Price Index. The final weighted average 2008 thresholds were $14,051 for a family of two, $17,163 for a family of three and $22,025 for a family of four. See the Census Bureau page:

http://www.census.gov/hhes/www/poverty/povdef.html

The Department of Health and Human Services issues a simplified measure of poverty called the poverty guidelines. These are used for administrative purposes, such as determining eligibility for government programs.

 

The 2009 Poverty Guidelines for the
48 Contiguous States and the District of Columbia

Persons in family

Poverty guideline

1

$10,830

2

14,570

3

18,310

4

22,050

5

25,790

6

29,530

7

33,270

8

37,010

For families with more than 8 persons, add $3,740 for each additional person.

 

Guidelines for Alaska and Hawaii are somewhat higher.

What is wrong with the poverty guidelines?

Many critics say that the guidelines don’t reflect the costs that families actually have to cover. For example, food takes a smaller proportion of family outlays than it did in the early 1960s, while housing takes a larger share than it used to. Legislators and government agencies are aware of the problems with the threshold, and so eligibility for programs is often set at some level above the poverty guidelines. For example, eligibility for Medicaid may be set at 133 percent of poverty.

Shawn Fremstad of Center for Economic and Policy Research suggests, “A new measure should meet two fundamental criteria. First, it should represent the minimum income a family needs to ‘get along’ or ‘make ends meet’ at a basic level. Second, while retaining a focus on income deprivation, it should encompass other forms of deprivation, including hunger, substandard housing, and lack of health insurance. In doing so, it would cut across the various conceptual and issue ‘silos’ that characterize anti-poverty policy and advocacy.” See:

http://spotlightonpoverty.org/ExclusiveCommentary.aspx?id=10ba8b9a-303c-4cdf-9d84-ce4cbeea6378

Darrick Hamilton and William Darity, Jr., writing in The American Prospect, September 2009, say that poverty measurement should consider a family’s assets as well as its income, recognizing the extent of the racial wealth gap. They say that shifting from an income-based to a wealth-based test for transfer programs can be an effective non-race-based way to reduce racial inequality. Reid Cramer of New America Foundation wrote in 2003 that considering assets would more realistically capture the dynamic and complex relationship between economic well-being and household resources over time.