The Current State of Poverty
The national poverty rate is at a 25 year high. This post goes over the current situation regarding poverty - giving the numbers and the analysis of the data.
In the previous blog post, we saw how the federal government determines poverty. By using a nationally determined threshold, the Census collects data on who is impoverished by that standard and other criteria used to indicate poverty like certain government benefits and healthcare access. That post provides the contextual information required to understand the current high poverty rates and the growing number of suburban poor in 95 metropolitan areas across the United States.
Established in the 1960s, the poverty threshold is an income level determined by the federal government as the bare minimum to afford to live in the United States. With the exception of Alaska and Hawaii it does not account for regional differences in cost of living, though the poverty line changes every year to adjust for inflation. The percentages and numbers listed here are based on the federally established poverty thresholds.
Poverty on a National Level
The results of a recent 2011 Current Population Survey Annual Social and Economic Supplements (CPS-ASEC) looks at the current state of poverty in the United States. The current national rate—based on 2010 data, taken one year after the recession “ended” in July 2009—sits at 15.1%, with over 46 million people living at or below the poverty threshold. The poverty rate before the 2008-2009 recession was 13%, down .3% from 2006 (Income, Poverty and Health Insurance in the United States).
The above table—extracted from this report (page 16)--indicates that the poverty rate is not quite as high as it was in 1983 or 1962, but what makes the current situation significant is the increase rate in poverty from 2009 to 2010. As the table shows, normally a decrease or a small increase of .2% or so occurs in the year following the end of a recession—but in the year following the end of the 2008-2009 recession, poverty jumped .8%--a hike unseen since 1981, after which the economy dipped again in a second recession from 1981-1982. Observing patterns like this can help us predict the economy’s next twist.
Comparing the Present to the Past
This other table pictured below—also from the Census publication (page 7)--provides details that compare the current conditions to previous historical economic downturns since the 1960s when the poverty threshold first came about. This table illustrates how the current conditions are much worse than they were following other recessions—as you can see there continues to be an increase in unemployment and strong decreases in median home price, which are markers of recessions. Unlike past “recovery” years, 2010 reported record decreases in this area as well as a big drop in all workers with earnings.
Poverty on a Local Level
Other concentrations are following suit on national trends. The state of poverty in Metropolitan areas increased from 2009 to 2010 going from 13.9% to 14.9%. In the Kansas City metropolitan area, the poverty rate for 2009 was 11.5% which includes the entire nine county area within KCResearch’s coverage zone. Looking at counties with principal urban areas—Jackson and Wyandotte—you can see a higher rate of 15.3% and 21.4% respectively (Poverty Estimates: States and Counties).
The 2008 study by the Brookings Institute also indicated a growing trend in poverty in suburban areas since 2000. At the time of their study, the poverty threshold was set at $21,834 annual household income for a family of four. The Kansas City area showed more substantial gains in suburban poverty than many other metropolitan areas across the United States with a 1.5% increase compared to .9% average growth nationwide in Metropolitan Areas. However, despite the rapid growth, the area’s suburban poverty rate sits at 7%--below the 9.5% average for the other cities in the Brookings Institute’s analysis (Suburbanization of Poverty: Trends in Metropolitan American).
Though the suburban rate is still much lower than the city rate—a 2008 combined estimate of 17.5% for Kansas City, MO and Kansas City, KS—it demonstrates the toll of our tough times as jobs move out of urban cores, houses age, incomes decline and the population continues to grow. Increases in suburban poverty may also be attributed to higher oil prices required to get by in a suburban setting where public transportation is scarce and most residential neighborhoods are not mixed with commercial areas to provide for short commutes to and from work.
Changes for Future Reports?
Poverty levels and increases are based primarily on inflation and often do not account for other changes. Over time, living standards have increased with little consideration from the poverty thresholds. In the 1960s when the first thresholds came out cellphones were non-existent and now they are essential for daily operations of most individuals over age 18; employers count on workers to be readily contacted. The thresholds also do not account for regional differences in cost of living like oil prices, housing costs and food costs. While a person living at the poverty level in Kentucky may be a little better off scraping by, but a person with the same income in California, New York, or Florida will have much more difficulty living on the same wages. The levels make sense for providing government benefits to individuals, but as an accurate measure of what it truly means to be poor, it seems like there are different ways to look at the problem.
Data reports like the ones mentioned in this post help us see poverty on different levels. The national data provides a broad perspective on the increasing poverty rate while local rates get down to the details of our own communities. The reports contextualize the raw data to provide a greater understanding of a complex topic and the varying metrics for examining it. Historical tables and analysis indicate that our current situation is perhaps more difficult than past recoveries as our communities and nation attempts to stabilize.