I found this study report from University of Wisconsin about the poverty in USA. More on their web site.<
National poverty data are calculated using the official Census definition of poverty, which has remained fairly standard since it was introduced in the 1960s and is useful for measuring progress against poverty. Under this definition, poverty is determined by comparing pretax cash income with the poverty, which adjusts for family size and composition. In 2001, according to the official measure, 11.7 percent of the total U.S. population lived in poverty .
- Is poverty different for different groups in the population?
- Has poverty changed over time?
- Poverty using different measures of income
The existing official measure of poverty has been widely criticized. Under the procedures by which the official poverty rate is calculated, only cash income is counted in determining whether a family is poor; cash welfare programs count, but benefits from noncash programs, such as food stamps, medical care, social services, education and training, and housing are not included. Taxes paid, such as social security payroll taxes, and tax credits, such as the Earned Income Credit, are also excluded from poverty calculations. Because government spending on means-tested noncash benefits and tax credits has increased more rapidly than spending on means-tested cash benefits over the years, ignoring noncash benefits is an increasingly serious omission if we want a broad picture of the impact of government programs on poverty. The Census Bureau has, therefore, calculated alternative poverty rates using various experimental adjustments to the official poverty rate. It has, for example, expanded the definition of income to take into account some noncash income, including government benefits. The experimental poverty measures are the subject of an issue of the IRP newsletter Focus.
The Census Bureau's poverty report for 2001 also estimates the effects of government programs on poverty using these experimental measures. For example, it compares the official measure of poverty with a measure suggested by a 1995 panel of the National Academy of Sciences (NAS), which, among other changes, adjusts for geographic differences in housing costs, counts noncash benefits as income, and subtracts from income some work-related, health, and child care expenses. Using a definition of poverty based on the NAS study, the poverty rate for 2001 would be 12.3 instead of 11.7 percent. Not all groups are affected uniformly, however, when the poverty definition changes.
There is considerable disagreement on the best way to incorporate medical care in a measure of poverty, even though medical costs have great implications for poverty rates. But costs differ greatly depending upon personal health, preferences, and age, and family costs may be very different from year to year, making it hard to see what exactly should be counted. Subtracting out-of-pocket costs from income is one imperfect approach, but if someone's expenses are low because they are denied care, then they would usually be considered worse off, not better off. If the value of Medicaid or Medicare benefits is included, should not the value of private insurance also be included? And although poor persons are clearly better off with medical coverage, such benefits, unlike cash, cannot be used by recipients to meet other needs of daily living.
Including the value of housing is equally controversial. How to measure the respective value of rented and owned housing? Including the equity value of housing would alter the distribution of poverty according to age, because of the large numbers of elderly who are homeowners.
Who is poor?
Is poverty different for different groups in the population?
Poverty using different measures of income
State poverty rates
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Official national poverty data are calculated using the Census Bureau definition of poverty. This measure has remained mostly unchanged since it was introduced in the 1960s (other than to be indexed annually by applying the Consumer Price Index) and is useful for measuring long-term poverty trends.
The Census definition, or rate, determines poverty by comparing pretax cash income against a poverty threshold dollar amount that is adjusted for family size and composition. In 2010, according to the official measure, 46.2 million people, or 15.1 percent of the total U.S. population, lived in poverty. This figure was up from 43.6 million people, or 14.3 percent, in 2009, making 2010 the fourth consecutive year that the official U.S. poverty rate has increased. Additionally, 2010 had the highest total number of people living in poverty in the 52 years that poverty estimates have been published.
Is poverty different for different groups in the population?
The poverty rate represents an average over the entire population and does not really tell us who is well-off and who is worse off. Blacks and Hispanics have poverty rates that greatly exceed the average. The poverty rate for all blacks and Hispanics remained near 30 percent during the 1980s and mid-1990s. Thereafter it began to fall. In 2000, the rate for blacks dropped to 22.1 percent and for Hispanics to 21.2 percent—the lowest rate for both groups since the United States began measuring poverty. By 2010, however, the poverty rate for both groups had risen to around 27 percent.
The Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC), from which the official poverty statistics are drawn, implemented a new question in 2003 to collect information on race, allowing individuals to report one or more races. There is no way of knowing how people who reported more than one race would have reported their race under the old question. Those who defined themselves as black only or as black and some other race had the highest poverty rates—27.4 percent. Among those of Hispanic origin, who can be of any race, the poverty rate was 26.6 percent. The poverty rate for Asians was 12.1 percent. Whites not of Hispanic origin had a poverty rate of 9.9 percent in 2010. See Figure 1 for long-term changes in the U.S. poverty rate by racial or ethnic group.
Figure 1: U.S. Poverty Rates by Race or Ethnicity - line graph
Click to enlarge Figure 1
Among children under age 18, 22.0 percent, or 16.4 million children, lived in poverty in 2010. (See the FAQ, How many children are poor?) The poverty rate for those over age 65, which in 1959 exceeded the overall poverty rate, fell below the overall rate beginning in 1982 and has stayed lower since then. In 2010, the poverty rate for this group was 9.0 percent, 6.1 percentage points below the rate for the population as a whole.
In 2010, the poverty rate for families was 11.7 percent, comprising 9.2 million families. Of all family groups, those headed by single women had the highest poverty rate. In 2010, 31.6 percent of all female-headed families (4.7 million families) were poor, compared to 6.2 percent of married-couple families (3.6 million families).
Figure 2: U.S. Poverty Rate by Residence Area Type: 1967-2010 - line graph
click to enlarge Figure 2
As shown in Figure 2, poverty rates rose across metropolitan areas in 2010. Suburban areas saw an increase as well, with poverty rates reaching their highest level since the mid-1960s. Although rural poverty rates remained essentially unchanged from 2009, they were higher than at any point since 1993.
Figure 3: Poverty Across Regions: 1969-2010 - line graph
click to enlarge Figure 3
As shown in Figure 3, the poverty rate varies considerably across regions. In the South, nearly 1.5 million more people were living in poverty in 2010 than in 2009, leading to a poverty rate of 16.9 percent. The Northeast, Midwest, and West regions experienced slight increases in poverty from 2009. Despite the relative stability in these regions, the regional numbers mask significant growth within particular subregions, states, and cities.
Poverty using different measures of income
The existing official measure of poverty has been widely criticized. Under the procedures by which the official poverty rate is calculated, only cash income is counted in determining whether a family is poor; cash welfare programs count, but benefits from noncash programs, such as food assistance, medical care, social services, education and training, and housing are not included. Taxes paid, such as Social Security payroll taxes, and tax credits, such as the Earned Income Tax Credit, are also excluded from poverty calculations. Because government spending on means-tested noncash benefits and tax credits has increased more rapidly than spending on means-tested cash benefits over the years, ignoring noncash benefits is an increasingly serious omission if we want a broad picture of the impact of government programs on poverty.
In 1995 a panel of the National Academy of Sciences (NAS) published an influential report on revising the poverty measure (Measuring Poverty: A New Approach, edited by Constance F. Citro and Robert T. Michael). Over the years, the Census Bureau has calculated alternative poverty rates using various experimental adjustments to the official poverty rate (see http://www.census.gov/hhes/povmeas/<). It has, for example, expanded the definition of income to take into account some noncash income, including government benefits.
In March 2010, the federal government released information on a proposed Supplemental Poverty Measure (SPM) to offer a more complete picture of the depth and demographics of poverty, as well as the effects of public investments such as food assistance and tax credits on poverty rates. Analysts at the Census Bureau and the Bureau of Labor Statistics are developing the SPM, which will not replace the current measure, but rather it will provide a different view of poverty and the effectiveness of public antipoverty policies. The SPM is a work in progress, to be informed by the research and evaluation of poverty scholars. The first poverty statistics based on the SPM will be released at the end of October 2011.
See the FAQ, "How is poverty measured in the United States?" for more about proposed changes to the official poverty measure.
State poverty rates
Table 1 presents poverty rates by state for 2008 to 2010 and earlier years, based on three-year averages of CPS data (state poverty rates in a single year are not very reliable, owing to small sample sizes). Mississippi, Arizona, New Mexico, the District of Columbia, and Louisiana had poverty rates of 18 percent or over. The poverty rate was lowest in New Hampshire at 7.1 percent.
Adjoining states may have radically different levels of poverty. For example, in the 2008 to 2010 figures, the poverty rates in the following adjoining states differed greatly: Arizona (19.2 percent) and Utah (9.1 percent), Virginia (10.6 percent) and North Carolina (16.1 percent), and Iowa (10.2 percent) and Missouri (14.6 percent). The 2009 poverty rate in New York was 15.3 percent, while in each of the five states surrounding it the rate was between 8.3 percent (Connecticut), and 11.4 percent (Pennsylvania).
See also, the Census Bureau’s American Community Survey, which has much larger sample sizes than the CPS, and is therefore considered a better source of state poverty rates.
See the Wisconsin Poverty section of this website for more about poverty in this state and a description of IRP’s Wisconsin Poverty Project.
Note: This discussion has been adapted from the U.S. Bureau of the Census, Poverty in the United States: 2002, Series P60-222, and Income, Poverty, and Health Insurance Coverage in the United States: 2003, 2004, 2005, 2006, 2007, 2008, 2009, and 2010 Series P60-226, 229, 231, 233, 235, 236, 238, and 239; and U.S. Census Bureau Current Population Survey, 2005 to 2010 Annual Social and Economic Supplements.
The Census Bureau has revised its method of estimating the poverty threshold four times—in 1966, 1974, 1979, and 1981. These revisions changed the estimate of the poverty rate. The first two revisions slightly reduced the estimated number of poor, whereas the more recent revisions slightly increased the number. In 1984, the Census Bureau also revised its method of imputing missing values for interest income, which slightly lowered the estimated poverty rate. Thus data on income and poverty in later years may not be comparable to data in earlier years because of the changes in the methods used by the Census Bureau to process survey results. In March 2010, the U.S. Commerce Department introduced a new alternative poverty measure, the Supplemental Poverty Measure, that complements, but does not replace, the current, official poverty measure.