America’s Poverty Problem Hasn’t Changed and Likely Will Not Change in the Future

The Atlantic

America’s Poverty Problem Hasn’t Changed

The only thing that has is one of the ways the Census Bureau chooses to measure it.

• GILLIAN B. WHITE
 
•  SEP 16, 2015
 

When the Census Bureau released its latest data on income and poverty for the country, and despite a falling unemployment rate and a rising GDP—two promising macroeconomic signs—things haven’t improved all that much for American families in the past year.

n 2014, median household income was reported as $53,657—statistically the same as it was in 2013. The same stagnation held when it came to the poverty rate, with about 14.9 percent of Americans, or almost 47 million people, falling below the poverty threshold of about $24,000 for the year.

The news was, of course, worse for minorities and women. The rate of poverty among blacks and Hispanics was well over 20 percent. Women, too, remained more likely to struggle to make ends meet, especially elderly women, whose poverty rate was nearly double that of men in the 75 and older age group. And though more women than ever are participating in the workforce, with 61 percent of women employed full time in 2014, their earnings remained about 79 percent of their male colleagues.

Poverty Rate by Race

None of this is especially revelatory—America’s poverty problem is basically the same. So the biggest news in the data dump was the shifting methodology behind it all. For years, critics have said that the means of measuring poverty in the U.S. is overly simplistic. It includes forms of income such as social security and unemployment, but excludes other things that shape families’ finances, such as food stamps and tax credits. It also ignores that the price of some services, such as health care, have escalated more quickly than inflation has, and that the costs of childcare matters more to families than it did 50 years ago, when fewer women were working.

That’s why for the first time, the bureau released a supplemental poverty measure along with its official figures. According to the supplemental data, the poverty rate in the U.S. was about 15.3 percent—0.4 percentage points higher than the report’s official rate. But the additional measure shows differences in age groups. For instance, those under the age of 18 have a poverty rate of 16.7 percent—quite a bit lower than the 21.5 percent reported in the main findings. For older Americans, the tweaked metrics paint a grimmer picture, with the share of seniors living in poverty reported as nearly 5 percentage points higher than the official measure.

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Poverty Rates: Official Versus Supplemental

The more inclusive measures might  help monitor the effectiveness of programs meant to increase the well-being of specific populations, such as  children or the elderly. Still, the use of an official, blanket income level remains a crude means of identifying families that are having a difficult time putting roofs over their heads or food on the table, especially considering the vast differences in cost of living around the country. To better understand the persistent poverty problem requires greater attention to nuanced and localized data that can better illustrate areas where the cost of essentials are outstripping income and benefits, and where families continue to suffer.

Who is poor in the United States? 14.8% of the Population, for starters...

• Inequality

The Hamilton Project

Paper | June 17, 2016

Who is poor in the United States?

By: Diane Whitmore Schanzenbach, Lauren Bauer and Ryan Nunn

Understanding the characteristics of the poor is crucial for crafting effective anti-poverty policies. In this Economic Analysis, we document characteristics of the 46.7 million Americans—14.8 percent of the population—who lived in poverty in 2014. Using the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) collected in March 2015, the source of official poverty statistics, we describe who lives in poverty as well as the characteristics of the working-age poor and those working-age poor who were employed less than full-time year-round.

Consider the following sobering statistics, illustrated in the figure above:

• More than a third of those who live in poverty are children. More than 15.5 million children lived in poverty in 2014.
• 
  
• About 13 percent of those living in poverty are senior citizens or retired.
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• A quarter of those who live in poverty are in the labor force—that is, working or seeking employment.
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• A tenth of those in poverty are disabled.
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• Eight percent of those living in poverty are caregivers, meaning that they report caring for children or family.
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• Students, either full- or part-time, make up another seven percent of those living in poverty.
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• Just three percent of those living in poverty are working-age adults who do not fall into one of these categories—that is, they are not in the labor force, not disabled, and not a student, caregiver, or retired.

Just over half of those who live in poverty are of working-age, defined as between the ages of 18 and 64. Figure 2 categorizes working-age adults living below the poverty line in 2014. Among working-age adults living in poverty, 45% are in the labor force:

• 13 percent are full-time, year-round workers, meaning that they usually worked 35 hours or more per week for at least 50 weeks during 2014.
• Just over one quarter of poor working-age adults work less than full-time year-round, meaning that they worked during the previous year, but not on a full-time, full-year schedule.
• 5 percent report that they are seeking employment – a classification that means that these adults were in the labor force – throughout the year.

The remaining 55 percent of working-age adults are not in the labor force. Additional data from the CPS ASEC, which asks respondents why they are not in the labor force, allows us to further describe who these non-workers are. As a share of the total working-age adult living in poverty population:

• 18 percent —a third of the non-workers living in poverty—are disabled.
• 26 percent—just under half of non-workers—are caregivers or students.
• 6 percent are retired, though it is important to note that only the working-age population is considered here, so this constitutes early retirement.
• 5 percent of the total population of working-age adults in poverty are not in the labor force and are neither disabled, a caregiver, a student, nor retired.

Certainly some share of those who are disabled, a caregiver, a student, or retired—as well as the remaining small fraction outside those groups—are people who are capable of employment. As Figure 3 illustrates, a portion of those living in poverty who are disabled, a caregiver, a student, or retired are indeed in the labor force.

Though 13 percent of working-age adults living in poverty are working full-time year-round, about twice as many were employed less than full-time year-round in 2014. Figure 3 further investigates the composition of working-age adults living in poverty that reported usually working part-time and who were working part-time in March 2015.

About 40 percent of those working part-time during the year are involuntarily part-time – meaning that they would like to work full time but cannot due to an economic reason such as inability to find a full-time job, employer reduction of hours, or slack work. Just under half of part-time workers were students, caregivers, or disabled. Only about 1 in 6 of these part-time workers worked fewer than 35 hours a week or less than 50 weeks a year for some other reason.

In order to address poverty, we must first know who is poor. Using the most recently available data on poverty, we describe the population living in poverty as well as the working-age poor. This analysis suggests that most deviations from full-time, full-year employment are readily explicable in terms of factors like disability, education, or caregiving.

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