One in six live in poverty in USA

The number of people living in poverty in the US is higher than previously thought, and close to 50 million, according to the U.S. Census, using the second annual Supplemental Poverty Measure (SPM).  As reported on the CNNMoney page, “The alternative measure showed the importance of Social Security and the weight of medical care on the elderly. Without Social Security, some 54.1% of Americans age 65-plus would be in poverty, as opposed to 15.1%. But if they didn’t have to pay out-of-pocket health care costs, their poverty rate would have fallen nearly in half to 8%.”

An Idaho paper lifts out two more findings: “Without refundable tax credits such as the earned income tax credit, child poverty would rise from 18.1 percent to 24.4 percent. Without food stamps, the overall poverty rate would increase from 16.1 percent to 17.6 percent.”

4 thoughts on “One in six live in poverty in USA

  1. I don’t know a lot about the SP measure, but it doesn’t seem like poverty rates are really higher than we thought if, for example, the increased rate is due to the ~$2400-$2900 difference in the poverty threshold for households with rent or mortgages: presumably most households. Of course, therr might be an argument about why SP is a better absolute measure of poverty than the alternatives, but it looks like we need such an argument in order to think that there genuinely are more poor people in the US than we previously thought. Also, it looks like under SP the poverty threshold counts people comfortably within the top 20% of world earners, PPP-adjusted, as poor. So it’s worth noting how US-centric it is as an absolute measure of poverty.

  2. Yes, this is a measurement of the U.S. Census so it is U.S.-centric. The SPM aims to clarify who in the U.S. population lives with difficulties associated with the U.S. context. This is for some good reasons, including the incorporation of exceptionally high-cost healthcare expenses out of pocket.

    I don’t know what to make of the statement that there might be an argument for the SPM, or what work the adverb ‘genuinely’ is doing in the statement, other than to recommend reading the hyperlinked readings.

  3. I wasn’t saying it was US-centric because it assesses the US Census (we could assess the US Census using non-US centric measures of absolute poverty, like the $1.25 a day measure) but because the threshold is so high. Also, you mention that the SPM aims to clarify ‘difficulties associated with the US context’ such as high out-of-pocket healthcare expenses. But this is an issue that would seem to face the global poor to if anything a greater degree (since they spend a large percentage of their income on health, have much worse access to basic health services, less recourse to bankruptcy or low/mid-interest loans to cover healthcare costs, etc.). I agree that aiming to clarify who in the US population lives with US-relative difficulties might be for some good reasons if you care about who is doing worst out of those in the US (i.e. out of a relatively wealthy set of individuals). I just think it’s worth noting that this is what it’s doing.

    Here’s my thought behind the ‘argument for the SPM’ comment. It looks like the articles are saying “More people are in poverty now than we thought”, but the reason they give is that the definition of poverty has been changed (and in this definition, the threshold has been raised). If I give an absolute measure of poverty with a threshold of $10^100 then it’s misleading to say “There is far more poverty in the US than we thought. We though there were only 50 million poor people in the US, but now there are over 310 million poor people in the US”. There statement implicates that what’s classified as poverty remains the same, and that more people are experiencing it. Now the statement seems fine in the context of these articles if you’re tracking some independent concept of poverty that’s widely shared, and you can show that measure A tracks this better than measure B. Given this, more people are poor than we thought because our measures were bad at tracking the independent concept of poverty. But it’s not clear to me, having read the articles, what independent concept of poverty the SPM tracks better than the old measure, or whether the concept of poverty being tracked by these measures is even sufficiently non-ambiguous for this kind of argument to go through (maybe you disagree with this though? It certainly seems like this might be a mistake on my part, if there’s actually a large consensus on what constitutes poverty, or a theoretically defined notion of poverty that’s being assumed here). But without this, the statement looks a lot like “if we raise the poverty threshold, then the number of poor people increases”.

  4. “it looks like under SP the poverty threshold counts people comfortably within the top 20% of world earners, PPP-adjusted, as poor”

    Well, GDP per capita in India is about US$1,704.063 while on a PPP basis it is about US$3,608.196. But $3.6k/yr in the USA means you can’t afford housing. Is the average Indian homeless? If not, PPP-adjusted income is a bad metric for poverty.

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