[[File:US Poverty Rates.svg|thumb|300px|right|Map of estimated
poverty rates in the United States,
Poverty in the United States
is cyclical in nature
with roughly 13 to 17% living below the federal poverty line at any
given point in time, and roughly 40% falling below the poverty line
at some point within a 10 year time span. Most Americans (58.5%)
will spend at least one year below the poverty line at some point
between ages 25 and 75. There remains some controversy over whether
the official poverty threshold over- or understates poverty.
common measure of poverty in the United States is the "poverty threshold" set by
This measure recognizes poverty as a lack of
those goods and services commonly taken for granted by members of
mainstream society. The official threshold is adjusted for inflation
using the consumer price index
income relates to the median income, and does not imply that the
person is lacking anything. In general the United States has some
of the highest relative poverty
rates among industrialized countries, reflecting both the high
income and high degree of inequality.
In terms of pre-transfer absolute
rates, in 2000 the United States ranked tenth among
sixteen developed countries, though it should be noted that 2000
was a 'trough' year and subsequently absolute poverty rates have
increased.. The US does worse in post-transfer absolute poverty
rates. According to a 2008 report released by the
Carsey Institute at the University of New Hampshire, on average, rates of poverty are persistently
higher in rural and inner city parts of the country as compared to
Measures of poverty
Measures of poverty can be either absolute or relative.
Two official measures of poverty
Percent and number below the poverty
The poverty rate for selected age
Those under the age of 18 are most likely to fall below
There are two basic versions of the federal poverty measure: the
poverty thresholds (which are the primary version) and the poverty
guidelines. The Census
issues the poverty
, which are generally used for statistical
purposes—for example, to estimate the number of people in poverty
nationwide each year and classify them by type of residence, race,
and other social, economic, and demographic characteristics. The
of Health and Human Services
issues the poverty guidelines for
administrative purposes—for instance, to determine whether a person
or family is eligible for assistance through various federal
Since the 1960s, the United States Government has defined poverty
in absolute terms. When the Johnson
administration declared "war on
" in 1964, it chose an absolute measure. The "absolute
poverty line" is the threshold below which families or individuals
are considered to be lacking the resources to meet the basic
needs for healthy living; having insufficient income to provide the
food, shelter and clothing needed to preserve health.
The "Orshansky Poverty Thresholds" form the basis for the current
measure of poverty in the U.S. Mollie
was an economist working for the Social Security
(SSA). Her work appeared at an opportune moment.
Orshansky's article was published later in the same year that
Johnson declared war on poverty. Since her measure was absolute
(i.e., did not depend on other events), it made it possible to
objectively answer whether the U.S. government was "winning" this
war. The newly formed United States
Office of Economic Opportunity
adopted the lower of the
Orshansky poverty thresholds for statistical, planning, and
budgetary purposes in May 1965.
The Bureau of the Budget (now the Office of Management and
) adopted Orshansky's definition for statistical use in
all Executive departments in 1965. The measure gave a range of
income cutoffs, or thresholds, adjusted for factors such as family
size, sex of the family head, number of children under 18 years
old, and farm or non-farm residence. The economy food plan
(the least costly of four nutritionally adequate food plans
designed by the Department of Agriculture) was at the core of this definition of
The Department of Agriculture found that families of three or more
persons spent about one third of their after-tax income on food.
For these families, poverty thresholds were set at three times the
cost of the economy food plan. Different procedures were used for
calculating poverty thresholds for two-person households and
persons living alone. Annual updates of the SSA poverty thresholds
were based on price changes in the economy food plan.
Two changes were made to the poverty definition in 1969. Thresholds
for non-farm families were tied to annual changes in the Consumer Price Index
(CPI) rather than
changes in the cost of the economy food plan. Farm thresholds were
raised from 70 to 85% of the non-farm levels.
In 1981, further changes were made to the poverty definition.
Separate thresholds for "farm" and "female-householder" families
were eliminated. The largest family size category became "nine
persons or more."
Apart from these changes, the U.S. government's approach to
measuring poverty has remained static for the past forty
Recent poverty rate and guidelines
The 2008-2009 poverty threshold was measured according to the
Poverty Guidelines which are illustrated in
the table below.
|Persons in Family Unit
||48 Contiguous States and D.C.
|For each additional person, add
: Federal Register
, Vol. 74, No. 14,
January 23, 2009, pp. 4199–4201
The official number of poor in the US in 2008 is 39.1 million
people, greater in number but not percentage than the officially
poor in Indonesia
, which has a
far lower HDI
and the next largest population
after the United States.
Relative measures of poverty
Another way of looking at poverty is in relative
"Relative poverty" can be defined as having significantly less
access to income and wealth than other members of society.
Therefore, the relative poverty rate can directly be linked to
income inequality. When the standard of living among those in more
financially advantageous positions rises while that of those
considered poor stagnates, the relative poverty rate will reflect
such growing income inequality and increase. Conversely, the
poverty rate can decrease,
with low income people coming
to have less wealth and income if wealthier people's wealth is
reduced by a larger percentage than theirs. In 1959, a family at
the poverty line had an income that was 42.64% of the median
income. Thus, a poor family in 1999 had less income and therefore
less purchasing power than wealthier members of society in 1959,
and, therefore, "poverty" had increased. But, because this is a
relative measure, this is not saying that a family in 1999 with the
same amount of wealth and income as a family from 1959 had less
purchasing power than the 1959 family.
In the EU
and for the OECD
, "relative poverty" is defined as an income below
60% of the national median
equalized disposable income
after social transfers
for a comparable household. In Germany, for example, the official
relative poverty line for a single adult person in 2003 was 938
euros per month (11,256 euros/year, $12,382 PPP. West Germany 974
euros/month, 11,688 euros/year, $12,857 PPP). For a family of four
with two children below 14 years the poverty line was 1969.8 euros
per month ($2,167 PPP) or 23,640 euros ($26,004 PPP) per year.
According to Eurostat
the percentage of
people in Germany living at risk of poverty (relative poverty) in
2004 was 16% (official national rate 13.5% in 2003). Additional
definitions for poverty in Germany are "poverty" (50% median) and
"strict poverty" (40% median, national rate 1.9% in 2003).
Generally the percentage for "relative poverty" is much higher than
the quota for "strict poverty". The U.S concept is best comparable
to "strict poverty". By European standards the official (relative)
poverty rate in the United States would be significantly higher
than it is by the U.S. measure. A research paper from the OECD
calculates the relative poverty rate for the
United States at 16% for 50% median of disposable income and nearly
24% for 60% of median disposable incomeMichael Foerster/Marco Mira
d'Ercole, "Income Distribution and Poverty in OECD Countries in the
Second Half of the 1990s", OECD Social, employment and migration
working papers No. 22, Paris 2005, page 22, figure 6. (OECD
average: 11% for 50% median, 16% for 60% median).
The income distribution and relative poverty
Although the relative approach theoretically differs largely from
the Orshansky definition, crucial variables of both poverty
definitions are more similar than often thought. First, the
so-called standardization of income in both approaches is very
similar. To make incomes comparable among households of different
sizes, equivalence scales
used to standardize household income to the level of a single
person household. In Europe, the modified OECD
equivalence scale is used, which takes the combined value of 1 for
the head of household, 0.5 for each additional household member
older than 14 years and 0.3 for children. When compared to the US
Census poverty lines, which is based on a defined basket of goods,
for the most prevalent household types both standardization methods
show to be very similar.
Secondly, if the of the poverty threshold in Western-European
countries is not always higher than the Orshansky threshold for a
single person family. The actual Orchinsky poverty line for single
person households in the US ($9645 in 2004) is very comparable to
the relative poverty line in many Western-European countries
(Belgium 2004: €9315), while price levels are also similar. The
reason why relative poverty measurement causes high poverty levels
in the US, as demonstrated by Förster, is caused by distributional
effects rather than real differences in wellbeing among
EU-countries and the USA. The median household income is much
higher in the US than in Europe due to the wealth of the middle
classes in the US, from which the poverty line is derived. Although
the paradigm of relative poverty is most valuable, this comparison
of poverty lines show that the higher prevalence of relative
poverty levels in the US are not an indicator of a more severe
poverty problem but an indicator of larger inequalities between
rich middle classes and the low-income households. It is therefore
not correct to state that the US income distribution is
characterised by a large proportion of households in poverty; it is
characterized by relatively large income inequality but also high
levels of prosperity of the middle classes. The 2007 poverty
threshold for a three member family is 17,070.
Poverty and demographics
In addition to family status, race/ethnicity and age also correlate
with poverty in the United States. Although data regarding race and
poverty are more extensively published and cross tabulated the
family status correlation is by far the strongest.
Poverty and family status
According to the US Census, in 2007 5.8% of all people in married
families lived in poverty, as did 26.6% of all persons in single
parent households and 19.1% of all persons living alone.
By race/ethnicity and family status.
Among married families: 5.8% of all people including
5.4% of white persons,
8.3% of black persons, and
14.9% of Hispanic persons (of any race) were in poverty.
Among single parent families: 26.6% of all persons, including
30% of white persons,
44% of black persons, and
33% of Hispanic persons (of any race) were in poverty.
Among unrelated individuals and people living alone: 19.1% of all
18% of white persons
27.9% of black persons and
27% of Hispanic persons of any race lived in poverty
Poverty and race
The US Census declared that in 2007 12.5% of all people,
- 8.2% white people
- 24.7% black people
- 21.5% all Hispanic people of any race, lived in poverty.
Poverty and age
The US Census declared that in 2007 12.5% of all people
- 18% of all people under age 18
- 10.9% of all people 19-64, and
- 9.7% of all people ages 65 and older, lived in poverty
The Organization for Economic Co-operation and Development (OECD)
uses a different measure for poverty and declared in 2008 that
child poverty in the US is 20% and poverty among the elderly is
non-profit advocacy group Feeding America has released a study (May 2009) based on 2005-2007
data from the U.S. Census Bureau and the Agriculture
Department, which claims that 3.5 million children under the
age of 5 are at risk of hunger in the United States. The study claims that in 11 states, Louisiana, which has the highest rate, followed by North Carolina, Ohio, Kentucky, Texas, New Mexico, Kansas, South Carolina, Tennessee, Idaho and Arkansas, more than 20 percent of children under 5 are
allegedly at risk of going hungry.The study was paid by ConAgra
Foods, a large food company.
Eighty-nine percent of American households were food secure
throughout the entire year 2002, meaning that they had access, at
all times, to enough food for an active, healthy life for all
household members. The remaining households were food insecure at
least some time during that year. The prevalence of food insecurity
rose from 10.7% in 2001 to 11.1% in 2002, and the prevalence of
food insecurity with hunger rose from 3.3% to 3.5%.
Factors in poverty
There are numerous factors related to poverty in the United
- Tax levels Cross-country data shows an inverse correlation
between tax levels as a share of GDP and child poverty.
- Limited job opportunities appear to exist for significant
subgroups of some races and ethnic groups. This is reflected by
the low-income nature of large sections of the economy, as divided
along racial/ethnic lines: 21% of all children in the United States live in poverty, but 46% of African American children and 40% of
Latino children live in poverty.
- The Heritage Foundation
speculates that illegal immigration increases job competition among
low wage earners, both native and foreign born. Additionally many
first generation immigrants, namely those without a high school
diploma, are also living in poverty themselves.
- In 1991, 8.3% of children in two-parent families were likely to
live in poverty; 19.6% of children lived with father in single
parent family; and 47.1% in single parent family headed by
Much of the debate about poverty focuses on statistical measures of
poverty and the clash between advocates and opponents of welfare
programs and government
regulation of the free market
measures can be either absolute or relative, it is possible that
advocates for the different sides of this debate are basing their
arguments on different ways of measuring poverty. It is often
claimed that poverty is understated, yet there are some who also
believe it is overstated; thus the accuracy of the current poverty
threshold guidelines is subject to debate and considerable
In 2007, 46% of poor households in the US owned their own homes,
30% had two or more cars, and 63% received cable or satellite
Concerns regarding accuracy
In recent years, there have been a number of concerns raised about
the official U.S. poverty measure. In 1995, the National Research
's Committee on National Statistics convened a panel on
measuring poverty. The findings of the panel were that "the
official poverty measure in the United States is flawed and does
not adequately inform policy-makers or the public about who is poor
and who is not poor."
was chaired by Robert Michael, former Dean of the Harris School of
the University of
According to Michael, the official U.S.
poverty measure "has not kept pace with far-reaching changes in
society and the economy." The panel proposed a model based on
sociologists and government officials have argued that poverty in
States is understated, meaning that there are more
households living in actual poverty than
there are households below the poverty threshold.
report states that as much
as 30% of Americans have trouble making ends meet and other
advocates have made supporting claims that the rate of actual
poverty in the US is far higher than that calculated by using the
poverty threshold. While the poverty threshold is updated for
inflation every year, the basket of goods used to determine what
constitutes being deprived of a socially acceptable miniumum
standard of living has not been updated since 1955. As a result,
the current poverty line only takes goods into account that were
common more than 50 years ago, updating their cost using the
Consumer Price Index. Mollie Orshansky, who devised the original
goods basket and methodology to measure poverty, used by the U.S.
government, in 1963-65, updated the goods basket in 2000, finding
that the actual poverty threshold, i.e. the point where a person is
excluded from the nation's prevailing consumption patterns, is at
roughly 170% of the official poverty threshold. According to John
Schwarzt, a political scientist at the University of Arizona:
of understating poverty is especially pressing in states with both
a high cost of living and a high
poverty rate such as California where the median
home price in May 2006 was determined to be $564,430.
of all homes being priced above the half million dollar mark and
prices in urban areas such as San Francisco, San
Jose or Los
Angeles being higher than the state average, it is almost
impossible for not just the poor but also lower middle class worker to afford
decent housing , and no possibility of home ownership.
, where the low-pay industry of agriculture is the largest
sector in the economy and the majority of the population lacks a
college education the median home price was determined to be
$723,790, requiring an upper middle class
which only roughly 20% of all households in the county
boast. Such fluctuations in local markets are however not
considered in the Federal poverty threshold and thus leave many who
live in poverty-like conditions out of the total number of
households classified as poor.
The federal poverty line also excludes income other than cash
income, especially welfare benefits. Thus, if food stamps
were successfully raising the standard of living for
poverty stricken individuals, then the poverty line figures would
not shift since they do not consider the income equivalents of such
study of low income single mothers titled Making Ends
Meet, by Kathryn Edin, a sociologist at the University
of Pennsylvania, showed that the mothers spent more than their
reported incomes because they could not "make ends meet" without
According to Edin, they made up the
difference through contributions from family members, absent
boyfriends, off-the-book jobs, and church charity.
According to Edin: "No one avoided the unnecessary expenditures,
such as the occasional trip to the Dairy
, or a pair of stylish new sneaker
for the son who might otherwise sell
drugs to get them, or the Cable TV subscription for the kids home
alone and you are afraid they will be out on the street if they are
not watching TV."
Swedish right-wing think tank
Timbro points out that lower-income
households in the U.S. tend to own more appliances and larger
houses than many middle-income Western Europeans.
There have been many governmental and nongovernmental
reduce poverty and its effects. These range in scope from
neighborhood efforts to campaigns with a national focus. They
target specific groups affected by poverty such as children, people
who are autistic, immigrants, or people who are homeless
. Efforts to alleviate poverty use a
disparate set of methods, such as advocacy
, direct service or
, and community organizing
Recent debates have centered on the need for policies that focus on
both "income poverty" and "asset poverty." Advocates for the
approach argue that traditional governmental poverty policies focus
solely on supplementing the income of the poor, through programs
such as AFCD and Food Stamps. These programs do little, if
anything, to help the poor build assets and begin to lift
themselves out of poverty. Some have proposed creating a government
matched savings plan (similar to the private 401K) system to
provide a savings incentive to poor and lower-income individuals
Negative income tax
Main article at Negative income
From 1968 to 1979 a massive social experiment was undertaken in the
U.S. : The Negative Income Tax Experiments of the 1970s in the
The four experiments were in:
areas in New
Jersey and Pennsylvania from 1968-1972 (1300 families).
areas in Iowa and North Carolina from 1969-1973 (800 families).
- Gary, Indiana from 1971-1974 (1800 families).
- Seattle and Denver, from
1970-1978 (4800 families).
Campaign to Reduce Poverty in the United States
Catholic Charities USA released the :
"Campaign to Reduce Poverty in America"
based on its paper
Poverty in America: A Threat to the Common Good
From Poverty to Prosperity
In April 2007 The Center
for American Progress
, a liberal think tank, released a report
: "From Poverty to Prosperity: A National Strategy
to Cut Poverty in Half"
. It recommended 12 steps to cut poverty
in half by 2017, including raising the minimum wage, expanding the
Earned Income Tax Credit
and promoting unionization
the Employee Free Choice
Citing data from the U.S. Census Bureau in a 2005 editorial,
economist Walter E. Williams of George Mason
University wrote that the poverty rate among single-parent
black families was 39.5%, while it was only 9.9% among
married-couple black families.
Among white families, the
comparable rates were 26.4% and 6%.
- Zweig, Michael (2004) What's Class Got to do With It,
American Society in the Twenty-first Century. ILR Press. ISBN
- Hacker, J. S. (2006). The great risk shift: The new
insecurity and the decline of the American dream. New York:
Oxford University Press (USA).
- Schwartz, J. E. (2005). Freedom reclaimed: Rediscovering
the American vision. Baltimore: G-University Press.
- Bradley, D., Huber, E., Moller, S., Nielson, F. & Stephens,
J. D. (2003). Determinants of relative poverty in advanced
capitalist democracies. American Sociological Review,
- Notten, Geranda and Neubourg, Chris de (2007): Poverty in
Europe and the USA: Exchanging official measurement methods. Table
- Kenworthy, L. (1999). Do social-welfare policies reduce
poverty? A cross-national assessment. Social Forces,
- Child Poverty High in Rural America Newswise,
Retrieved on August 26, 2008.
- Fisher, G.M. (2003) The Development of the Orshansky Poverty
Thresholds. Accessed: 2003-12-27
- Poverty Definition U.S. Census Bureau.
- NOTE: Data in paragraph do not agree with official U.S. Census
data, which show poverty rate for families rising from 8.7% in 2000
to 10.2% in 2004, then declining slightly to 9.8% in 2007. Note#2:
The Poverty Threshold is (correct me if I'm wrong on any point)
NEVER measured according to the HHS Poverty Guidelines. The HHS
Poverty Guidelines are calculated from the Poverty Thresholds, also
known as "the federal official poverty line" in accordance with
Title 42 Sec. 9902 (2) of The Federal Code. The Thresholds are
provided by The Office of Management and Budget as the starting
point which are taken from years prior to the current Threshold
figures and are multiplied by a percentage change in the CPI
(Consumer Price Index) measured from the earlier Thresholds' year
of publication to the present. The average difference between the
thresholds and this result is then added back to the original
Threshold amounts to produce the HHS Poverty Guideline Table as
displayed below. See here for details:
The Poverty Threshold Table for 2008:
- Census Bureau:Poverty: 2007 and 2008 American
- U.S. Census Bureau. Current Population Survey. People in
Families by Family Structure, Age, and Sex, Iterated by
Income-to-Poverty Ratio and Race: 2007: Below 100% of Poverty -- All Races.
- U.S. Census Bureau. Current Population Survey. People in
Families by Family Structure, Age, and Sex, Iterated by
Income-to-Poverty Ratio and Race: 2007: Below 100% of Poverty -- White Alone.
- Household Food Security in the United States, 2002 -
United States Department of Agriculture
- Center for the Future of Children, The Future of Children. Vol.
7, No 2, 1997.
- Poor Poverty Yardsticks by Rea Hederman,
Heritage Foundation, Washington
Post. September 7, 2006. Accessed: 2007-02-18
- However many mothers skipped meals or did odd jobs to cover
those expenses. According to Edin, "most welfare-reliant mothers
food and shelter alone cost almost as much as these mothers
received from the government. For more than one-third, food and
housing costs exceeded their cash benefits, leaving no extra money
for uncovered medical care, clothing, and other household
expenses." Devising New Math to Define Poverty by Louis
Uchitelle, New York Times. 1999-10-18. Accessed:
- Ammunition for poverty pimps Walter E. Williams,
October 27, 2005
- U.S. Census Bureau Poverty Definition
- U.S. Census Bureau Poverty in the United States
Poverty Doesn't Rate, American Enterprise Institute
Solutions to Poverty: America's Struggle to Build a Just
Society. Scott Myers-Lipton, (2006).
- Child Poverty and Tax: a simple graph of child
disposible income disparity in OECD countries against tax
- F.H.C. Ministries Charity is not Reform!
- From Poverty to Prosperity: A National Strategy to
Cut Poverty in Half, The Center for American Progress, April
- Explanation of poverty definition by economist
Ellen Frank in Dollars &
Sense magazine, January/February 2006
- "Deciding Who's Poor" by economist Barbara
Bergmann in Dollars & Sense
magazine, March/April 2000
- 37 million poor hidden in the land of
- David Walls, Models of Poverty and Planned Change
- U.S. Government Does Relatively Little to Lessen Child
- U.S. Department of Health & Human Services Poverty
Guidelines, Research, and Measurement
- Cities Tolerate Homeless Camps by Jennifer Levitz,
The Wall Street
Journal, August 11 2009
- The Forgotten Americans PBS series by Hector Galan
- Americans living in Third World conditions This
article discusses the living conditions of people inhabiting