Putting Poverty in Context
The national poverty rate is at a 25 year high. This post examines how the government measures poverty and other ways of looking at what it means to be poor.
Though the most recent economic recession ended in July 2009, it seems little has changed and in some cases the situation has only worsened as recent reports indicate that the poverty rate is at a 25 year high with a growing number of poor households in suburban areas. But what does it mean to live in poverty and how are the impoverished counted? These questions can be answered, but not easily since there is the current government-issued measure of poverty—an annually published income limit—but other considerations help us understand some other facets of determining poverty.
The most common way to measure poverty is by the government’s standard--the thresholds. Every year the Census Bureau publishes a table listing income levels for different household sizes that they have determined is the bare minimum to live on in the United States. For a family of four with two adults under the age of 65, the poverty line is $22,113. A single individual under the age of 65 must earn less than $11,344 before taxes to be considered impoverished. The thresholds are based on net income, which means that the amount considered is pre-tax and does not factor in other benefits like public housing, food stamps or Medicaid. The poverty line for Alaska and Hawaii residents are slightly more to accommodate for higher costs of living.
Beyond the Threshold: Health Insurance & the Poverty Ratio
Most of the data for determining the 25 year high is from the 2011 Current Population Survey Annual Social and Economic Supplements (CPS ASEC), which uses the federal guidelines for determining poverty called Income, Poverty, and Health Insurance Coverage in the United States: 2010. The CPS ASEC is a long-form sample survey unlike the ten-year census, which is a short survey sent out to all American households. The CPS ASEC pools results from 100,000 households chosen at random, and recipients are required to fill out the survey. In addition to asking about income to determine poverty status, the CPS ASEC also collects data about housing, health insurance and food stamps benefits. The report published by the census looks at data from March 2011, taken over 1 year after the recession ended, and compares the results to historically similar periods. The report also breaks down poverty rates, health insurance data, and median home price on a regional level to look at how trends are taking form across the nation.
Examining trends in health insurance coverage, like the report from the Census does, is another way to consider poverty. Impoverished households are more likely to not have access to health insurance because they must take low-level or part-time jobs that do not come with employer provided insurance and do not make enough to cover basic medical expenses. It is another lens to view poverty through other than net income, since health care is a basic human need and the lack of it puts lower income households at greater risk for medical problems.
Another facet of poverty that Income, Poverty, and Health Insurance Coverage in the United States: 2010 explores is the poverty ratio, or how poor the poor really are. The poverty ratio looks at what percentage of impoverished individuals live at certain fractions of the poverty line. For instance, in 2010 6.7% of United States Households (about 20.5 million people) had income below ½ of the poverty level for their given household. This demographic of households living at half the poverty level or lower accounts for 44.3% of the impoverished population. Information like this allows us to scope into how far below the poverty line people are living.
Above the Threshold: Low-Income Americans
Similar to the Census’ analysis of income ratios, the Brookings Institute data analysis in The Suburbanization of Poverty: Trends in Metropolitan America, 2008-2010 addresses the issue of those living slightly above the poverty line, or low-income Americans. Though the report also uses census data to look at the issue of increased poverty in suburban areas, they consider the federal poverty threshold too limiting to defining the poor. It has a broader definition, and more people surveyed identify as low-income households—roughly 36.6% of people living in principal cities and 20.5% of people living in the suburbs nationwide. While the poverty line is the bare minimum to get by on, low-income households may not have enough resources to access essential services. The meat of the profiles focuses on how poverty levels are growing in the suburbs, but low-income households are becoming even more prevalent in areas surrounding principal cities.
Greater Details: Food Stamp Benefits and School-Aged Children
Also drawing from similar data released by the Census, the local non-profit, Mid-American Regional Council (MARC) compiles data for the nine county Kansas City Metropolitan region in their dataset, Estimates of Poverty for States and Counties. The MARC spreadsheet shows statewide and countywide changes over time since the 1990 census and also provides data regarding food stamp benefit recipients. They have broken down poverty status by general population and the school-aged population aged 5-17. A more specific table, Poverty by School district, explores the details and changes over time of children living in poverty. The inclusion of food stamp benefit information is a way of examining poverty that considers people who require federal assistance to eat, an essential human need.
Counting The Homeless
However, as widely used as the Census data is, there is a problem with it, particularly when it comes to measuring poverty rates in the United States. Only people with physical addresses can be surveyed, thereby excluding homeless individuals. Collecting data on individuals and families without homes is difficult since some are only periodically homeless but also because the same individuals and families cannot be continually relocated. The most accurate way to measure homelessness is to conduct point in time surveys on a single 24 hour period in which sheltered and unsheltered people fill out surveys about certain demographic information, where they sleep, and how chronic their homelessness is. Since the census does not survey the homeless and there are no census takers to make visits to require households to complete surveys (like the American Community Survey does), the Point In Time survey requires information to spread by word of mouth among the homeless to come to shelters and street services to provide information for the count.
Housing and Urban Development requires communities to conduct Point in time counts in order to qualify for grants and funding for homeless services. Usually one day a year HUD requires communities to conduct point in time counts. Most of the counts are conducted by local or state agencies formed to help the homeless with training from HUD (unlike the Census, who pays workers, they must rely on volunteers). In Kansas City the Homelessness Services Coalition conducts and publishes the results, which shed more light on the poverty situation in the area. However, no recent national homeless counts are available and those available are estimates and the varying sources have reached different outcomes, perhaps owed to differing methodologies.
The census bureau is currently working on developing a supplemental poverty measure that will not replace the current official measure, but will be based on more than net income. The new results should be arriving soon, and while it will not be used to determine eligibility for Government programs, it promises to shed new light on what it takes to get by and how consumerism and socio-economic factors change.
The next blog post will dig into the numbers behind the current poverty increases.