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7 Key Trends in Poverty in the United States

Last Updated September 25, 2023

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According to the official poverty measure of the U.S. Census Bureau, 37.9 million people lived in poverty in 2022. Digging deeper into that statistic reveals important variations in income and poverty both over time and across demographic characteristics — and provides valuable insight on the causes and effects of poverty for our nation, our economy and our federal budget. Below are seven key trends to help understand poverty in the United States.

1. Two primary measures of poverty exist. The official poverty measure was developed in the mid-1960s to quantify cash resources for households. It compares pre-tax cash income to a poverty threshold adjusted for family size. The level of poverty was set at three times the cost of a minimum food diet in 1963 and is adjusted annually using the Consumer Price Index for All Urban Consumers (CPI-U), a measure of the average change in prices paid by consumers for a basket of goods and services. For a family of four (2 adults and 2 children under 18 years) within the 48 contiguous states, the poverty line by this measure in 2022 was $27,750.By contrast, another measure, the supplemental poverty measure (SPM), defines poverty by comparing resources against a determination of need. “Need” accounts for expenditures mostly related to food, clothing, shelter, and utilities. That need is compared to disposable income (after taxes and certain other expenses) and accounts for the value of certain non-cash benefits. The SPM is meant as a research tool to supplement the official measure, not to replace it or to measure eligibility for anti-poverty programs.

In most years, the two measures have moved in tandem, with the official poverty rate generally from 0.6 and 1.6 percentage points lower than the SPM. However, in 2020, programs enacted to provide income support in response to the pandemic had a large effect on the SPM, causing it to be lower than the official poverty rate. Examples of programs enacted to provide income support in 2020 include expanding unemployment insurance, expanding SNAP benefits to children and allowing states to issue additional benefits, housing assistance, childcare support for essential workers, and rental assistance. In 2021, the SPM continued to be lower than the official poverty measure, reflecting large stimulus payments and tax credits associated with continued COVID relief, which were excluded from income for the official measure but included in the SPM. However, when the COVID relief expired in 2022, there was a significant spike in the SPM — the first increase since 2011— but the official poverty measure remained steady since stimulus payments and tax credits are not a factor in the measure.

2. Deep poverty affects millions of people. The income-to-poverty ratio helps to better understand how many people live near poverty, as well as the depths of poverty, in the United States. The following chart uses data on the official poverty rate. In 2022, of the 37.9 million people in poverty, about half, 18.1 million, were in deep poverty (meaning that 48 percent of all people in poverty earned less than half of the poverty threshold). Meanwhile, 12.2 million people lived just above the poverty line.

3. Poverty is not experienced equally. While poverty rates for Black and Hispanic Americans are lower today than they were over a decade ago, the share of such individuals in poverty remains well above the average compared to other groups. The SPM for Black Americans and Hispanic Americans also increased by more percentage points than other groups — spiking from 11.3 percent and 11.2 percent in 2021 to 17.2 percent and 19.3 percent in 2022, respectively.

4. The SPM among children doubled from 2021 to 2022.The SPM among children was at its lowest recorded level in 2021 largely due to COVID-19 relief that increased resources for families with children, such as the stimulus payments and the enhanced Child Tax Credits. The expiration of that aid contributed to the spike in the SPM among children, which climbed from 5.2 percent in 2021 to 12.4 percent in 2022. Meanwhile, the official poverty rate for children under 18 – which doesn’t include that federal relief – declined by 0.3 percentage points over the past year, from 15.3 percent to 15 percent.

5. Poverty is unequally distributed by region. The Midwest had the lowest percentages of people in poverty in 2022 as measured by both the official rate and the SPM. The South, meanwhile, had the highest poverty rate, at 13.1 percent, for the official poverty rate. Traditionally, the official poverty rate has shown the South to have persistently higher levels of poverty.

6. Income varies widely across racial and ethnic groupsIn 2022, median income ranged from $52,860 for Black heads of household to $81,060 and $108,700 for White and Asian household heads, respectively.

7. Men earn more than women. Median income for all workers declined by 2.2 percent in 2022, decreasing from $49,030 to $47,960. Among full-time, year-round workers in 2022, men had median earnings that were about $10,000 higher than women. The female-to-male earnings ratio was 0.84 — largely unchanged from 2021.

Conclusion

Poverty remains a significant structural challenge in America. As the United States continues to emerge from the pandemic, understanding the nature of poverty will be essential to identify the most efficient use of federal dollars for anti-poverty programs and initiatives that will help raise up more Americans out of poverty and, in turn, support inclusive and widely shared economic growth for the future.

 

 

Image credit: Photo by Getty Images

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