Thomas Gabe
Specialist in Social Policy
In 2012, 46.5 million people were counted as poor in the United States—the number, statistically unchanged over the past three years, is the largest recorded in the measure’s 54-year history. The poverty rate, or percent of the population considered poor under the official definition, was reported at 15.0% in 2012, a level statistically unchanged from the two previous years. The 2012 poverty rate of 15.0% is well above its most recent pre-recession low of 12.3% (2006) and remains at a level not last seen since 1993. Poverty in the United States increased markedly from 2007 through 2010, in tandem with the economic recession (officially marked as running from December 2007 to June 2009). Little if any improvement in the level of “official” U.S. poverty has been seen since the recession’s official end, with the poverty rate remaining at about 15% for the past three years. Some analysts expect U.S. poverty to remain above pre-recession levels through much, if not most, of the remainder of the decade, given the slow pace of economic recovery. The pre-recession poverty rate of 12.3% in 2006 was well above the 2000 rate of 11.3%, which marked an historical low (a rate statistically tied with the previous historical low of 11.1% in 1973).
The incidence of poverty varies widely across the population according to age, education, labor force attachment, family living arrangements, and area of residence, among other factors. Under the official poverty definition, an average family of four was considered poor in 2012 if its pretax cash income for the year was below $23,492.
The measure of poverty currently in use was developed some 50 years ago, and was adopted as the “official” U.S. statistical measure of poverty in 1969. Except for minor technical changes, and adjustments for price changes in the economy, the “poverty line” (i.e., the income thresholds by which families or individuals with incomes that fall below are deemed to be poor) is the same as that developed nearly a half century ago, reflecting a notion of economic need based on living standards that prevailed in the mid-1950s.
Moreover, poverty as it is currently measured only counts families’ and individuals’ pre-tax money income against the poverty line in determining whether or not they are poor. In-kind benefits, such as benefits under the Supplemental Nutrition Assistance Program (SNAP, formerly named the Food Stamp program) and housing assistance are not accounted for under the “official” poverty definition, nor are the effects of taxes or tax credits, such as the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC). In this sense, the “official” measure fails to capture the effects of a variety of programs and policies specifically designed to address income poverty.
A congressionally commissioned study conducted by a National Academy of Sciences (NAS) panel of experts recommended, some 19 years ago, that a new U.S. poverty measure be developed, offering a number of specific recommendations. The Census Bureau, in partnership with the Bureau of Labor Statistics (BLS), has developed a Supplemental Poverty Measure (SPM) designed to implement many of the NAS panel recommendations. The SPM is to be considered a “research” measure, to supplement the “official” poverty measure. Guided by new research, the Census Bureau and BLS intend to improve the SPM over time. The “official” statistical poverty measure will continue to be used by programs that use it as the basis for allocating funds under formula and matching grant programs. The Department of Health and Human Services (HHS) will continue to issue poverty income guidelines derived from “official” Census Bureau poverty thresholds. HHS poverty guidelines are used in determining individual and family income eligibility under a number of federal and state programs. Estimates from the SPM differ from the “official” poverty measure and are presented in a final section of this report.
Date of Report: November 13, 2013
Number of Pages: 85
Order Number: RL33069
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