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 Census Income, Poverty, and Health Insurance Data released in September 2016, had 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 2016, about 40.6 million Americans (12.7 percent) lived below the poverty line ($24,563 for a family of four in 2016) and the poverty rate for children was 18.0 percent.

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 8.2 million and SNAP (formerly the Food Stamp program) 3.6 million people above the poverty line in 2016 under the Census' alternative computation. 

Racial and Ethnic Discrepancies

Census Bureau findings show that among the racial and ethnic groups,

  • More than 1 in 5 Black Americans live below the poverty line
  • Almost 1 in 4 Hispanics live below the poverty line
  • Only 8.8 percent of Whites live below the poverty line

This is the legacy of structural racism that created the racial wealth divideUnited for a Fair Economy (UFE) released a report in 2015 titled State of the Dream 2015: Austerity 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.

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.

Additional Resources