Understanding PovertyHOW MANY PEOPLE LIVE IN POVERTY IN THE UNITED STATES?
Official numbers in 2001
Here are three different measures of poverty from 1998, some of the most recent data available.
Definition One: Official government measure of poverty (here income is measured before income and payroll taxes, and does not include cash and near-cash (e.g., housing support) government transfers).
1998 34.5 million individuals living in poverty
The official governmental definition of poverty is widely considered to be outdated and inadequate. The definition was created in 1965 by multiplying by three the food expenses of a household at the minimum level of economic survival and public participation. This method worked on the assumption that one-third of an average household's expenses went to pay for food. The current official poverty definition still operates under this assumption, even though consumption habits of the average household have changed dramatically since 1965 (e.g., the 1965 definition assumed that all meals were home cooked). Additionally, the definition of household expenses does not factor in differences in cost-of-living, especially differences in housing costs. The only increases in the poverty line have been based on increases in the Consumer Price Index since 1965.
Although widely considered to be inadequate, the official poverty definition will likely remain unchanged because legislation related to poverty is often indexed in terms of the poverty line. An increase in the poverty line would increase the cost of legislation already on the books. Thus, some now advocate simply defining poverty for the purposes of future legislation and policy at 150-200% of the official poverty line.
Definition Two: Subtracts income and payroll taxes and adds cash and near cash government transfers. This definition also assumes a lower poverty threshold than the official poverty line in an effort to adjust for the inadequacy of the definition.
1998 32 million individuals living in poverty
Definition Three: Same as definition two, but also subtracts medical expenses.
1998 44 million individuals living in poverty
Medical expenses are subtracted from household income on the assumption that essential and basic health care expenses are not options for a household when considering how to allocate resources, just as taxes on income are not optional expenses.
How important are numbers? Joseph Stalin once said that "a single death is a tragedy, a million deaths is a statistic." Over time, this website will seek to document in greater and greater detail the human costs of poverty in an effort to move beyond statistics.
Source: "The Level, Trend, and Composition of Poverty," by Gary Burtless and Timothy M. Smeeding, in Understanding Poverty, edited by Sheldon H. Danziger and Robert H. Haveman. The Russell Sage Foundation, 2001.
Poverty and Race in 2001
Source: Institute for Research on Poverty - www.ssc.wisc.edu/irp
Long-term poverty is rare among whites - fewer than 1 percent were poor for ten years or more - but common among African American children, 29 percent of whom were poor for ten years or more.
Poor African American Children were less likely to escape poverty than poor whites. One in three poor African American children were still poor at age twenty-five to twenty-seven, compared to one in fourteen whites.
Source: "Mobility, Persistence, and the Consequences of Poverty for Children: Child and Adult Outcomes," by Mary Corcoran, in Understanding Poverty, edited by Sheldon H. Danziger and Robert H. Haveman, The Russell Sage Foundation, 2001.
Information gathered from other countries demonstrates that a combination of government policy and good jobs can significantly reduce poverty. This information provides clear refutation of the moral scapegoating that takes place in the United States, where the existence of poverty is blamed on the moral failures of the poor themselves.
Out of seven countries studied, the United States had the lowest rate of poverty reduction as a result of government income transfers.
Out of thirteen countries studied, the United States had the highest percentage of low-wage workers
Source: "U.S. Poverty in a Cross-national Context," by Timothy M. Smeedling, Lee Rainwater, and Gary Burtless, in Understanding Poverty, edited by Sheldon H. Danziger and Robert H. Haveman, The Russell Sage Foundation, 2001.
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