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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. The latest Census Income, Poverty, and Health Insurance Data released in September 2013, has some good news and bad news about poverty in America, along with important insights into what has worked to reduce the some of the impact. Of course these numbers do not speak about those working and near the poverty line or the impact on feelings of hope and dignity. In 2012, about 46.5 million Americans (15.0 percent) lived below the poverty line ($23,492 for a family of four in 2012) and the poverty rate for children under 6 in the U.S. was 24.4 percent. The percentage of Americans in poverty in 2012 was essentially unchanged from 2011 but this is still about 15 million more people in poverty than in the year 2000. The median household income in 2012 was not significantly different from 2011, but at $51,017, it has declined 8.3 percent since 2007, before the Great Recession. 

The Census Supplemental Poverty Measure data offered some good news (and proof of what we knew already): refundable tax credits (including the Earned Income Tax Credit (EITC) and the refundable portion of the Child Tax Credit) lifted 9.4 million and SNAP (formerly the Food Stamp program) 5 million people above the poverty line in 2012 under the Census' alternative computation. Also, the percentage of uninsured dropped from 15.7 percent in 2011 (48.6 million) to 15.4 percent (48.0 million). This continuing drop can be attributed to more young adults getting coverage because of the Affordable Care Act increasing Medicaid and Medicare enrollment.

Key Links to Data from the most recent Census Report:

Other Data Sources

Racial and Ethnic Discrepancies

  • Census Bureau findings show that among the racial and ethnic groups, Black households had the lowest median income in 2012 ($33,321), compared to the median of $57,009 for non-Hispanic white households. The same survey shows that 27.2 percent of blacks were living in poverty compared to 9.7 percent of non-Hispanic whites.
  • United for a Fair Economy (UFE) released a report in Feburary 2011 titled State of the Dream 2011: Austeristy for Whom? The report shows how many policies, such as cuts to public programs and tax cuts for the wealthy, are increasing the racial wealth divide. African-Americans and Hispanics are disproportionately affected by such policies.

Women

  • Poverty rates are higher for women than for men. In 2012, 14.5 percent of females were poor compared to 11 percent of males.
  • Women are poorer than men in all racial and ethnic groups. The 2012 poverty rates for women and men were, for African Americans, 25.1 percent compared to 20.6 percent; for Hispanics, 24.8 percent compared to 18.4 percent; for Asians, 11.5 percent compared to 10.6 percent; and for Whites, 10.3 percent compared to 7.7 percent.
  • Contrary to popular belief, the majority of poor women are not single mothers. Only about one-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 U.S. Census releases its poverty thresholds each year. These levels are what the Census uses to measure poverty in the U.S. The thresholds for 2012 are:

The 2012 Poverty Thresholds for the U.S. Census

Persons in family

Income Threshold

1

$11,720

2

 $14,937

3

 $18,284

4

$23,492

5

$27,827

6

$31,471

7

$35,473

8

$39,688

9

$47,297

Note that these levels are used only for statistical purposes. They are not used to determine eligibility for federal programs. The Health and Human Services Department (HHS) sets its own "poverty guidelines" for determining program eligibility, which are slightly lower than the Census thresholds. You can see the 2012 HHS poverty guidelines (for comparison to the Census numbers above), as well as the guidelines for 2013 and 2014  on the HHS website.

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.” 

Some have argued that poverty measurements should include a household's assets as well as its income.  Darrick Hamilton, writing in The American Prospect, September 2009, said 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 maintains that considering assets would more realistically capture the dynamic and complex relationship between economic well-being and household resources over time.

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