Poverty can be defined and measured in various ways, but generally refers to an inability to afford basic human needs such as food, clean water, shelter, clothing, healthcare, and education. Poverty affects people of all ages, genders, races, and locations, but certain socioeconomic factors make some groups more susceptible to poverty than others. Understanding what defines poverty and the diverse groups it impacts can help policymakers develop effective solutions for supporting low-income populations.
How is poverty defined and measured in the United States?
There are a few common methods for defining and measuring poverty in America:
Federal Poverty Level (FPL)
The FPL is a measure used by the U.S. Census Bureau to estimate the number of people living in poverty. It calculates minimum income thresholds based on household size required to meet basic needs. In 2021, the FPL for a family of 4 was $26,500. Those earning under 100% of the FPL are considered to be in poverty.
Supplemental Poverty Measure (SPM)
The SPM was implemented in 2011 to supplement the FPL by factoring in cost of living based on geography and including the value of non-cash government assistance programs. It aims to provide a more comprehensive measure of poverty in America.
Income inequality compares the distribution of income across high and low earning households. A high level of inequality indicates greater stratification between the richest and poorest residents. The gap between rich and poor has widened significantly since the 1970s.
Standard of living
The standard of living refers to the level of wealth, comfort, material goods, and necessities available to an individual or group. Poverty is often defined as having a lower standard of living than the rest of the population.
Deprivation measures poverty by the inability to access basic human needs and rights like nutrition, healthcare, housing, education, information, and political participation. Those experiencing deprivation lack the resources for a minimum standard of living.
What income level is considered poor in America?
The income thresholds used to define poverty vary by household size. Here are the 2021 FPL annual income levels considered poor for households in the 48 contiguous states and Washington D.C:
|Poverty Threshold (Annual Income)
As illustrated, the poverty threshold rises with each additional household member. Families earning less than these incomes are classified as living in poverty by the federal government.
How many Americans live in poverty?
According to the latest U.S. Census data from 2021:
– Around 37.9 million Americans lived below the FPL. This represented 11.6% of the total population.
– The poverty rate was highest among children under 18 at 16.1% or 11.7 million kids in poverty.
– By race, 18.8% of Black Americans and 16.1% of Hispanics lived below the FPL, compared to just 7.5% of non-Hispanic Whites and 7.2% of Asians.
– Over 14.4% of those living in metro areas were below the poverty line versus 10.8% in rural areas.
– The South had the highest regional poverty rate at 13.0% of Southerners in poverty.
Though poverty rates have fallen since peaks in 2010 and 2011 following the Great Recession, income inequality has continued widening in America. Poverty remains a persistent issue affecting tens of millions of adults and children.
What are the economic impacts of poverty?
Poverty has major economic consequences, both for the individuals experiencing it and society as a whole:
Lost productivity and contributions
Those trapped in poverty have less opportunity to reach their full potential in education and employment. This leads to lost productivity, economic output, innovation, and contributions to their communities.
Higher healthcare costs
People in poverty often lack access to preventative healthcare. This results in overuse of emergency rooms for care and poorer health requiring more expensive treatment.
Crime and incarceration
Poverty has been linked to higher crime rates which increase law enforcement and incarceration costs. The crimes committed are often economically motivated.
Reduced tax revenue
Individuals and families struggling in poverty produce less income tax revenue. They frequently rely more on government assistance programs, adding further strain to budgets.
Children raised in poverty are far more likely to remain trapped in poverty as adults. This creates an intergenerational cycle that propagates economic insecurity.
Though difficult to quantify, the total economic burden of poverty on society runs into the hundreds of billions of dollars when factoring in lost earnings, poor health, crime, and reliance on public assistance.
What are common causes and risk factors for poverty?
Poverty often results from overlapping economic, political, social, and individual factors including:
Unemployment and low wages
Losing a job or having employment that pays too little to cover basic living expenses are common triggers into poverty. Those working minimum wage and part-time jobs are especially at risk.
Mental, intellectual, or physical disabilities that limit an individual’s ability to work and earn income frequently lead to financial hardship.
Divorce splits income that may have been adequate to support a married household while creating major expenses. Single mothers are disproportionately likely to live in poverty.
Racial, gender, sexuality, religious discrimination, and other prejudices contribute to disproportionate poverty among marginalized groups.
Lack of education
Individuals who lack higher education are more likely to work low wage jobs without room for advancement and earning increases.
Addiction and mental illness
Debilitating addictions to drugs, alcohol, or gambling can destroy financial stability. Mental illnesses like schizophrenia and bipolar disorder can make maintaining work extremely difficult.
High medical bills
A major illness or injury can lead to mounting healthcare fees that deplete savings and income. Medical bankruptcies are common causes of poverty.
Weak safety net
When social programs to assist the poor are limited or underfunded, it can perpetuate poverty across generations.
Which groups are most affected by poverty?
While poverty impacts every demographic, certain populations are at highest risk:
Over 15 million children under 18 live in poverty, more than any other age group. Dependent on their families’ resources, they are especially vulnerable.
The poverty rate for Blacks is over 2 times higher than for Whites. On average, Blacks earn less income and own a fraction of the household wealth of White families.
Hispanics face higher poverty rates than the overall population. Many are immigrants employed in seasonal, low wage work.
People with disabilities
Around 28% of working age adults with disabilities live in poverty. Physical or mental limitations present barriers to gaining adequate employment.
Over 20% of families headed by single mothers live in poverty. Supporting children alone on a single income is an enormous challenge.
While poverty rates are higher in cities, rural poverty presents distinct challenges associated with geographic and social isolation.
Over a quarter of Native Americans and Alaskan Natives experience poverty. Centuries of discrimination have resulted in intergenerational economic disparities.
Poverty stems from an intricate web of societal barriers and vulnerabilities that make it difficult for people to meet their basic needs. While poverty rates have fallen modestly in recent decades, far too many children and families continue to struggle. Addressing the root causes of poverty will require holistic economic reforms, social change, support programs, and opportunities for education and employment. Though a major challenge, reducing poverty remains critical for creating a more just society where everyone can live with dignity and reach their full potential. Tackling poverty will lift up our communities, economy, health outcomes, productivity, and prosperity for generations to come.