Statistics on Poverty in the U.S.

Content

1. Evolution of poverty in the U.S.
2. Evolution by race and other population groups
3. Child poverty in the U.S.
4. Poverty and family structure in the U.S.
5. Long-term poverty
6. Geographical distribution
7. Improved poverty measurement
8. Poverty in the U.S. according to the World Bank $2 a day threshold
9. Income inequality

1. Evolution of poverty in the U.S., by race and other population groups

I should start off by mentioning that poverty measurement in the U.S. is hotly contested. Officially, “being poor” in the U.S. means having an income below the federal poverty level or line, which is about $20,000 a year for a family of four. More details about the problems with this poverty line are here, but let’s just assume for the moment that official poverty statistics give a reasonably correct image of the extent of poverty in the U.S.

The official estimates show that 46.2m Americans were living below the poverty line in 2010, which is 15.2% of the population. The nation’s official poverty rate in 2011 was not statistically different, at 15.0%, with 46.2 million people in poverty (source). 2012 was also much the same.

census+1+poverty

Given the wealth of the country, poverty looks like an easy problem to solve:

In 2012, the number was $175.3 billion. That is how many dollars it would take to bring every person in the United States up to the poverty line. In 2012, that number was just 1.08% of the nation’s Gross Domestic Product (GDP), which is to say the overall size of the economy. (source)

Reduce US military spending by a quarter, and you have the money.

The recession of 2008 obviously had an impact on the numbers. 14.3% of the population – 44 million people – were poor in 2009, compared to 13.2% in 2008. In the last year before the recession – 2007 – the rate was only 12.5%:

poverty and income levels in the U.S.

(source, adjusted for inflation)

All previous recessions have had a similar effect:

changes in the percentage of people in poverty

(source)

“Severe poverty” in the U.S. means an income below half of the poverty line (half of the poverty line corresponds to an income of $5,478 for an individual and $10,977 for a family of four). Of the 44 million people who were poor in 2009, 19 million were “severely” poor.

poverty and severe poverty

(source)

If we don’t look at the official poverty line in the U.S. but use an alternative measure such as the number of people with an income below 50% of the median income – a measure common in Europe – then we see that 17.3% of Americans are poor, compared to 7.2 in France, 8.4 in Sweden, 8.9 in Germany, 11.3 in the U.K. and 15.7 in Japan.

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2. Evolution by race and other population groups

Racial minorities in the U.S. are disproportionally hit by poverty:

poverty-02

chart_1 (39)

poverty by race

(source)

Some older data, for 2006, which includes income data:

poverty in the us

The poverty rate for non-whites is nearly triple the rate for whites. More on poverty and race in the U.S. is here, here and here.

poverty by race in the US

(source)

Apart from African Americans and Hispanics, poverty rates are also high for single mother families and for children (more on child poverty rates below):

US poverty trends by population groups

US poverty trends by population groups

(source)

poverty rate by family structure

(source)

The poor are disproportionately comprised of single parents with children, usually single mothers. Single parent families comprise 39.1 percent of the poor, although persons in such families make up only 14.4 percent of the total population (source). More about poverty and family structure below.

poverty by family type in the US
(source)

Young people are also disproportionately affected:

census+poverty+2

(source)

Here are the rates by gender:

poverty rate by gender

(source)

As you can see from some of the graphs above, the poverty rate for seniors has dropped dramatically since the 1970s. The poor as a group are younger than the population as a whole, with children making up almost 40 percent of the poor, compared with 28.8 percent of the overall population.

age-distribution-of-poor

(source)
poverty by age in the US

poverty by age in the US

(source)

poverty among seniors

Part of the explanation is Social Security. In the United States, Social Security refers to the Old-Age, Survivors, and Disability Insurance (OASDI) federal program. Unlike in Europe, where it’s a synonym for welfare, Social Security in the US is mainly old age pensions. it is currently estimated to keep roughly 40 percent of all Americans age 65 or older out of poverty. And indeed, the graphs for old age poverty and Social Security are almost perfect opposites:

elderly poverty and social security

(source unknown)

Poverty among immigrants is also higher than among the native population. Individuals born in the United States had a poverty rate of 12% in 2003, while those who are immigrants had a rate of 17.4%. Immigration can also, theoretically, affect native poverty: influx of immigrants is said to reduce job opportunities and wages for natives. However, the evidence for this claim is lacking. More here.

Another divider is education. Unsurprisingly, education is a strong predictor of poverty status. Among individuals living in families in which the head has less than a high school education, 31.3% are below the poverty line, compared with just 9.6% of those whose head has at least a high school education.

poverty by education level in the US

(source)

The following table gives another overview of poverty rates by different population groups. The first column with percentages gives the proportion of each population group that is poor; the second column the proportion of each population group in the total population. This table shows that poverty in the U.S. is disproportionally problematic for the young, for women, single (female) parents, non-whites, the unemployed, the under-educated and immigrants:

poverty by population group in the US

(source)
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3. Child poverty in the U.S.

In 2012, there were 16 million American children living in poverty.

child poverty rate in the U.S.

(source)

US child poverty rate

(source)

Here’s a decomposition of poverty rates by age groups:

poverty rates and gdp in the US

(source)

The graph above also complicates the usual link between poverty reduction and GDP-growth (see here and here).

And here’s a breakdown by children’s race:

child poverty in the US

(source)

Compare these child poverty rates to those of other developed countries:
child poverty rates in different countries

(source)

child poverty in the US and the UK

child poverty international comparison

(source)

Child poverty in the U.S. is highest in the Southern states:

child poverty rates in the U.S.

child poverty rates in the U.S.

(source)

US child poverty rate by state map

(source)
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4. Poverty and family structure in the U.S.

Compared to an average poverty rate of around 13-14%, the rate among individuals in families with an unmarried head and children present (five-sixths of whom are female unmarried heads) is between 35 and 40%. Among those with single heads, but no children present, the poverty rate is short of 20%.

Between 1967 and 2003, for example, the fraction of nonelderly individuals living in families headed by a single female doubled, from approximately 6 percent to 12 percent. Since the poverty rate among those in female-headed families is typically three or four times as high as in the overall population, such changes in the distribution of family types have large effects on poverty.

poverty-and-family-structure

(source)

More on poverty and family structure here.

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5. Long-term poverty

Among those who leave poverty in a given year, there is substantial re-entry in future years. Approximately 35% of individuals beginning a spell of poverty will be poor for at least five of the next ten years. 40 percent of Americans between the ages of 25 and 60 will experience at least one year below the official poverty line during that period (source).

However, persistent poverty is the exception. The average time most people spend in poverty is relatively short and the cause of temporary job loss, illness, family breakup etc. The map below shows counties of “persistent poverty” — areas where 20 percent or more of their populations – although not always the same 20% – have been living in poverty over the last 30 years (source).

persistent poverty

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6. Geographical distribution

There are a number of ways to show the geographical pattern of poverty in the U.S. Here’s a map of the number of people in the U.S. below the poverty line (year 2009), by county:

poverty in the US

(source, where you can view an interactive version of this map)

Here’s a version for 2010:

US population in poverty, by county

A larger version:

US poverty rate by county 2010

US poverty rate by county 2010

(source)

More readable, but less detailed, is the view by state:

poverty in the US

(source)

And these are the numbers for 2010:

US poverty map

(source)

Here’s a list of the poorest cities:

most poor cities in the US 2010

most poor cities in the US 2010

(source)

Indeed, poverty in the US is not only an inner-city phenomenon. The poor also live in suburban and rural areas. There are now more poor people living in the suburbs than in the inner cities:

suburban poverty in the US

(source)
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7. Improved poverty measurement

I mentioned at the beginning that the system for poverty measurement in the US is hotly contested, for the reasons stated here. That’s why the US Census Bureau has been working on an alternative system that avoids some of the current shortcomings. The alternative measure counts food stamps and other government support as income, while also accounting for child-care costs, geographic difference etc. First results show that the number of poor is slightly higher according to the new measurement system: 16.1% of total population in 2010 instead of the official 15.2% (the new measure adds about 3 million people). For 2011, the “supplemental poverty measure” is also 16.1%, and also higher than the official measure. For some groups, however, such as children under 18 and blacks, it’s actually lower. By contrast, it’s much higher for the elderly (15.1 percent in the supplemental measure, 8.7 percent in the official one).

standard and improved poverty measurement in the US

Some details of the new measurement:

when you account for the Earned Income Tax Credit the poverty rate goes down by two points. Accounting for SNAP (food stamps) lowers the poverty rate about 1.5 points. … when you account for the rise in Medical Out of Pocket costs, the poverty rate goes up by more than three points. (source)

standard and improved poverty measurement in the US

(source)

large

existing and alternative poverty measurement in the US

existing and alternative poverty measurement in the US

(source)
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8. Poverty in the U.S. according to the World Bank $2 a day threshold

There’s yet another alternative measurement of poverty in the U.S. The World Bank poverty measurement system is the international standard, and is quite different from the system used in the U.S. It’s therefore interesting to see how many Americans live in poverty according to the World Bank system, because this gives us a number of people who are poor according to international and not just American standards – people in other words who would be considered poor in sub-Saharan Africa:

Luke Shaefer of the University of Michigan and Kathryn Edin of Harvard examined the share of households with children in a given month living on less than $2 per person per day. It has nearly doubled since 1996, to almost 4 percent. Even when counting food stamps as cash, they found one of every 50 children live in such a household. (source, source)

The number of households with children living on less than $2 a day per person has grown 160 percent since 1996, to 1.65 million families in 2011.

It’s true that these numbers are somewhat exaggerated because in-kind transfers and tax reductions – important anti-poverty tools in the U.S. – aren’t included in measured income. However, poor farmers in Africa also enjoy some non-cash income.

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9. Income inequality

large

(source)

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(source)
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10 Comments

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  7. The U.S.A. should busy itself ameliorating these problems at home &
    cease engaging in warfare & big-noting acts of foreign aid to other countries.
    This is very grim reading &, if true, is very disturbing because America is
    supposedly ‘God’s Own Country’.
    Shocking stuff &,if true, must now be even worse. Fancy allowing any government
    to spend trillions on winning Democracy for Afghans….. & their own people
    are ill-nourished, poorly housed & can’t afford medicine.
    The Chinese must be laughing their heads off.

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