Who’s Poor in the United States?

The War on the Poor

The Poor People’s Campaign: A National Call for Moral Revival concluded its 40 days of moral action on June 23rd, 2018. Over 25,000 people participated in marches to end poverty and inequality in the United States. The Campaign emphasized grassroots and local organizing to build power among the 140 million people in America living without their basic needs met. It revealed the relationship between poverty and voter suppression, mass incarceration, environmental health risks, militarism, and more.

An accurate assessment of poverty today requires a broad understanding of what we need to live productive and healthy lives, and the Poor People’s Campaign has made it clear that far too many are poor in the United States.

On the other hand, the Trump administration has sought to do just the opposite. Declaring that the war on poverty “largely over and a success,” this administration has insisted that the main purveyor of poverty is people’s dependence on welfare programs. As a solution, it has recommended expanding work requirements for Medicaid, SNAP, and rental housing assistance. For the 140 million low-income Americans, their low living standard is apparently not only acceptable, but excessive.

Instead of acknowledging the systemic failures leading to so many poor in the United States, this administration made the outrageous claim that only 3 percent of Americans are poor. To arrive at that number, they used a consumption-based method that tracks spending habits to measure poverty. Research shows consumption-based measurements do not produce the most accurate picture of poverty and that recommendations like work requirements have been found to be ineffective and punitive policy measure.

Therefore, IPS has produced a map displaying poor and low-income rates in the U.S., or 200% of the Supplemental Poverty Measurement poverty threshold, that shows us a more accurate picture of poverty.

“Using a consumption model would lead to the false conclusion that poverty was lower during the Great Recession than in the early 2000s.”

Why Consumption-Based Measurements and OPM Don’t Tell the Whole Story

Recent evidence demonstrates that consumption-based measurements of poverty do not correlate with direct material measurements of well-being. Looking at indicators that are commonly associated with deprivation, scholars at the University of Michigan asked how well competing measures of overall poverty were able to take those into account. They compared the rates of hardships for conditions like food insecurity, the inability to meet essential household expenses, and unemployment with the rates of poverty estimated by consumption-based methods, the official poverty measure (OPM), and the supplemental poverty measure (SPM).

Their findings revealed a sharp disconnect between consumption expenses and the reality of poverty. For instance, using a consumption model would lead to the false conclusion that poverty was lower during the Great Recession than in the early 2000s, even though income poverty, food insecurity, non-food material hardship and medical hardship were higher in 2008-2010. The OPM and SPM, however, tracked well with the indicators we think about as actual measures of deprivation during this time frame.

A Better Way to Measure Poverty – Why the Supplemental Poverty Measure?

While both the OPM and the SPM were more closely aligned with direct indicators of deprivation, the OPM approach fails to take into account the current cost of goods and services essential for a family to meet their basic needs. Official poverty rates are set based solely on food expense data from 1955, updated annually for inflation. It is for this reason that the SPM was developed in 2010 and is widely considered to be a more precise measure of poverty.

The SPM is based on an assessment of what people currently spend on food, clothing, shelter, and utilities. And SPM thresholds differ by family size, renter/homeowner status, and geographic location. The SPM also takes into account non-cash government benefits, such as tax credits and public assistance. And it factors in necessary costs of living including taxes, out-of-pocket medical, childcare, and transportation expenses. Overall, the SPM gives a more complete account of household expenses in the contemporary United States.

Despite improvements in the SPM over the OPM, researchers have still identified circumstances when the SPM underestimates poverty levels by failing to account for the costs of transportation, health care, and other necessary goods besides shelter, food, utilities, and clothing. Approximately 30% of Americans with incomes slightly above the official poverty line experience a form of “multidimensional deprivation,” or are deprived of a set of basic elements of well-being. Evidence similarly implicates the SPM in undercounting basic deprivations.

When 55 percent of Americans struggle to pay medical bills, 40 percent of adults have less than $400 in savings, and nearly half of renters can’t afford housing costs, we know our poverty rates are failing to capture the total picture. Therefore, IPS has produced a map displaying poor or low-income rates in the U.S., or 200% of the SPM poverty threshold. Another attempt to better assess economic security is the Economic Policy Institute’s Family Budget Calculator.

“Over 40 million children are poor or low-income.”

A Real Picture of Poverty

According to a five-year average of SPM data, 46 percent of Americans–or 140 million people–live in families with insufficient income to meet their basic needs. In each of the five states with the highest poverty levels, over 51 percent of their populations are poor or low income. The highest rate is in California, at 55.4 percent, or 22.4 million people.

Poor or low-income rates differ significantly by race. In 35 states, White people make up the majority of all poor or low income people. Nationally, 49 percent of all poor or low-income people are White. Yet only 38 percent of White people are poor or low-income. In comparison, 62 percent of people of color (POC) are poor or low-income, and 18 states feature a greater number of poor or low-income people of color than White people, despite having a majority White population. Washington DC, Arizona, Rhode Island, Wisconsin, and Minnesota have the highest disparity between White and POC poor or low-income rates.

Likewise, women and children are disproportionately poor. DC, Massachusetts, Indiana and are Arkansas have the highest disparities between males and females. DC, Wisconsin, Arizona, and Georgia have the highest disparities been children and adults. Over 40 million children are poor or low-income.

This graph shows the huge impacts that different government programs and social services can have on the percentage of people who fall into categories of poverty by various SPM thresholds.

The bars to the right show factors that drive people into poverty, like medical expenses, or federal income taxes, while the bars to left are factors that have reduced poverty, like Social Security, or SNAP.

How to use this graph:

  • You can view the graph by number of people in poverty, or by percentage of people in poverty by clicking on “population” or “percentage” above the graph
  • Use the toggle tool to find out the impacts on these programs in different states and by different poverty thresholds
  • The graph is color-coded by age: children under 18, adults between 18 and 64, and seniors 65 and above.
  • When using the “population” view, click on any age category on the right to highlight the corresponding number of people in poverty in the graph
  • When using the “percentage” view, you can toggle the age category in the drop-down menu to the right

Contrary to the Trump administration’s Council of Economic Advisors report, poor or low-income rates in America reveal that poverty is a widespread experience in America. In some states, the majority of people are poor or low-income. Disparities by race, sex, and age are evident in every state, with racial differences particularly stark. While improvements in poverty reduction are historically evident, America’s War on Poverty is far from won.

In addition to these statistics, the Poor People’s Campaign has convened hundreds of mass meetings across the United States. In these meetings, people have used their stories to examine poverty and scrutinize the policies that disregard human suffering. These stories put a face on the statistics included in this map and remind us that poverty has deep and lasting impact on millions of people.

The Campaign has drawn on these facts, figures and faces to develop a Moral Agenda for ending poverty in the United States. This agenda includes a 15 dollar minimum wage, a right to healthcare, free college education, and more. To stay updated on the Poor People’s Campaign and to learn how to get involved, visit their website.

Report Methodology