A Measure of Poverty in the United States
We often talk about poverty and people living in poverty as measured by the government, Then, we set policy with regards to them. We never quite realize the impact of the programs on the people on the receiving end. A brief recital of facts and figures in charts.
I also do not believe we get an adequate picture in terms of the numbers and size of the population living in poverty The other aspect when we are making decisions is or are the people. Who are they? What is the impact?
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The first figure (Figure 1) is (my direction) to show what part of the nation today lives in poverty as measured by the government. Thirty-six million people live in poverty as measured by the government using various measurements. This equates to 11.1% of the population in 2023 and down from 11.5% in 2022.
In 2023, the official poverty rate fell to 11.1 percent, down from 11.5 percent in 2022. This was the first statistically significant change in the official poverty rate since 2020. Of the demographic groups presented in this report, only those reporting Two or More Races had a higher poverty rate decreased or were not statistically different from 2022.
The Supplemental Poverty Measure (SPM) rate increased 0.5 percentage points in 2023 to 12.9 percent. This was the second consecutive year that SPM rates increased. Between 2022 and 2023, SPM rates either increased or did not change significantly for every demographic group in this report.
The results illustrate how using different definitions of poverty affect who counts as being in poverty. The official poverty measure only considers pretax income. It uses national thresholds adjusting for inflation, allowing for consistent measurement of poverty over time. This allows measurement of poverty consistently going back to the 1960s.
The downside of this approach is that it does not capture changes to tax and transfer programs that can affect family and household resources, nor does it account for geographic differences in cost-of-living.
In contrast, the SPM accounts for income and payroll taxes, tax credits, noncash benefits, and non-discretionary expenses. It uses geographically adjusted poverty thresholds. These kept up to date by BLS with recent information on food, clothing, shelter, utility, telephone, and internet expenditures. This results in a poverty measure that accounts for current standards of living as well as short term policy changes in response to current events that operate primarily as noncash benefits or through the tax system.
Together, the two measures provide information on economic well-being (historic and current) that is particularly informative during periods of rapid change.
Both measures, however, share a structural blind spot. They capture income and certain mandated expenses but reveal little about how household resources are actually deployed once they arrive — and some categories of discretionary spending are sharply regressive. Lottery participation is the textbook example, but the picture has expanded considerably in recent years. State-by-state legalisation of mobile sports betting, the proliferation of payday and short-term lending products, and the rapid growth of the sweeps coins casino model — which lets US players engage with casino-style games through a dual-currency workaround in states where real-money online gambling is otherwise prohibited — have together created a fast-growing channel of discretionary outflows that early industry data suggests draws disproportionately from lower-income households. Neither the OPM nor the SPM registers a dollar of this activity. The point is not that poverty measures should track gambling specifically, but that any measure built primarily around income and mandated outlays will systematically understate the financial stress experienced by households whose discretionary budgets are absorbed by consumption channels the original frameworks were never designed to see.
Figure 2 provides a breakdown of the people living in poverty by sex, age, family, race, education, work experience. The importance of which is to gain an understanding of what impact the government may have due to policy changes whether by law or political change.
Figure 3 details the composition of the total population by race and Hispanic origin. This figure highlights which groups were overrepresented or underrepresented among the population in poverty by comparing the share of a particular group in poverty to the group’s share of the overall population.
Groups with a ratio of less than 1.0 were underrepresented in poverty while groups above 1.0 were over-represented. For example, while non-Hispanic White individuals made up 58.1 percent of the total population, they made-up 40.5 percent of the population classified as poor by the official poverty measure. As shown in the bottom panel of Figure 3, this results in a ratio of 0.7, indicating that non-Hispanic White individuals were under-represented in the poverty population. Asian individuals were also under-represented in the poverty population, while Hispanic (any race), Black, Two or More Races, and American Indian and Alaska Native individuals were overrepresented.
Figure 4 measures the impact Supplemental Poverty Measures.
It presents annual SPM rate changes for 2022 and 2023 across a set of demographic characteristics. SPM rates increased by 0.5 percentage points for both men and women in 2023. The SPM rate for women (13.4 percent) was higher than the rate for men (12.4 percent).
In 2023, the SPM rate increased 1.3 percentage points for those under 18 years old to 13.7 percent. SPM rates for both 18- to 64-year-olds (12.2 percent) and those 65 years and older (14.2 percent) were not statistically different from 2022. As measured by the arrows one can see increases and decreases with certain people as characterized by sex, age, Housing, Race, Education and Work Experience.
A gaggle of billionaires and a rogue president are getting ready to cut expenses without regard as to the impact. Or maybe they do know and do not give a damn. As you look at the charts above, you can get picture of the impact.
Poverty in the United States: 2023, US Census Bureau