This webpage presents all the basics of U.S. poverty in a summarized format.
What is poverty?
Poverty is living without the necessities of life – food, clothing, or housing. Poverty is a description and categorization of poor people. “Poor” in this context means “having little money or few possessions.” Poor can also mean “worse than usual, expected or inferior quality,” but this definition is not associated with impoverished people. Every human life has immeasurable worth!
People in poverty do not have enough money for the basic things needed to live comfortable lives. This fact arouses our compassion. It is the basis for our welfare programs and many of our charities.
Startling Poverty Facts
Here are five poverty facts that everyone should know.
Two types of poor people
There are two categories of the poor—those who can help themselves and those who cannot support themselves. People of sound mind and body make up the first category, and the mentally and physically disabled are in the second category.
The diversity of the poor – who are you talking about?
The poor across America are as diverse as the culture. They include old and young, minorities and white, sick and healthy, once prosperous and never prosperous, working and not working. Some of the poor are happy because they require little to be content, others are anxious about their situation, and others are bitter.
In addressing poverty, it is essential to be careful about who is being discussed. For example, is it the innocent hungry child or the homeless woman on the street? Is it a single black mother or a 20-year-old community college student? Is it the welfare cheat or the chronic alcoholic living on the streets? Is it the starving senior or the surfer on food stamps? All can be in poverty and yet have very different attributes and needs. Helping an alcoholic isn’t the same as helping a single mother. Distributing a free school lunch to a middle-class child differs from giving one to a child living with nothing. The first question addressing poverty should be, “Who are you talking about?”
How is poverty measured in the U.S.?
The Census Bureau measures poverty in the U.S. using the Official Method and the SPM Method.
Official Method – This is a measure of financial independence. It measures a family or individual’s income and compares it to the Poverty Threshold defined by the Census Bureau. This creates a poverty line whereby those below the line are labeled impoverished, and those above the line are not. Based on household size, the Poverty Thresholds for the year 2022 are shown to the left.
Government welfare payments received by the poor are not included as income in the Official Method. Therefore, the total resources available to the individual or family are not estimated, nor is their living standard. For that, the Census Bureau created the SPM Method.
SPM Method – This is a measure of living standard. Like the Official Method, it also uses a Poverty Threshold but adjusts it by estimated living expenses in each city or locality. It also adds governmental aid from welfare programs to the individual or family’s income. Finally, it factors in an estimate of health care costs. Those below the SPM poverty line can be thought of as living in poverty.
Consumption method – A University Report for 2022 measures poverty based on the consumption of individuals and families. The Census Bureau measures income or resources available to the individual or family, whereas consumption measures household spending.
How many are in poverty in the U.S.?
The percentage of the U.S. population in poverty was 11.5% using the Official Method and 12.4% using the SPM Method in 2022. The Census Bureau reports annual poverty numbers each September for the prior year. Here is the most recent Census report.
Using the Consumption Method, the poverty rate was 6% in 2022, as reported by a University Report. The SPM and Consumption Methods attempt to estimate the number of Americans living in poverty. SPM measures resources available to the household; consumption measures spending. Here is why the consumption number is lower than the SPM number.
Measuring poverty in the world versus the U.S.
In undeveloped countries, poverty means living on less than $2.15 daily. The World Bank defines this living standard as “extreme” poverty. The World Bank estimates that about 10% of the world’s population, or about 700 million people, lives under this threshold. They often have unsafe drinking water, no access to education, and a short life expectancy. Here is the World Bank Report.
In developed countries, the definition of poverty starts with much higher standards and generally does not involve unsafe water or life-threatening living conditions. The 2022 Poverty Threshold in the U.S. for an individual is $40.77 per day ($14,880 per year) or $20.51 per day for each family member in a family of four ($29,950 per year for the family).
Extreme Poverty in America
In an article entitled “How Many Americans live on $2.00 a day”, The Economist magazine concludes that the total is 336,000 people or about .1% of the population. The Economist believes the calculation most likely misses America’s homeless population. That could total a half million more people, representing another .2% of the population (See Homeless Page). Welfare programs of the federal government generally keep people out of extreme poverty. Americans in extreme poverty often can’t navigate the welfare system due to mental illness or addiction. It is one of the problems with the Federal Safety Net. More.
Poverty Level Over The Years
The Official Poverty Level has remained at 10.5% to 15.1% for over 50 years, as shown in the graph to the left. Welfare spending has increased dramatically over this timeframe but has not lowered the poverty rate. More.
Here is an interpretation of the data, including the drop in the SPM rate over the COVID-19 pandemic.
What are the attributes of those in Poverty in the U.S.?
The highest category of those in poverty is adults not working at 31%, and the lowest is full-time working adults at 2%. The Black and Hispanic poverty rate is 17% compared to 9% for White Americans. Single moms have a poverty rate of 23%, single dads 12% and married couples 5%. More.
Homeless
The homeless are a portion of the poverty population in America. They represent the most downtrodden in our nation and often live on the streets. They can be very visible and pull on the conscience of the country. However, they are a small part of the poverty landscape. They total about 600,000 Americans and represent 1.5% of the poverty population. More.
Housing First
Government aid to the homeless is governed by a policy entitled Housing First. The policy calls for the government to make housing the first focus of its assistance in dealing with the homeless. This means getting the homeless into shelters or temporary housing as quickly as possible. The theory is that it is tough for the homeless to find work and ultimately succeed without housing. However, many of the homeless suffer from acute mental illness or drug or alcohol addiction. Many argue that Treatment First is a better policy and that Housing First enables bad behavior and leads to more homelessness. More.
How does the poverty level compare to welfare spending?
The chart to the right shows welfare spending per person in poverty (red) versus the poverty line (Blue). Federal welfare spending has not impacted the Official Poverty Rate. More.
The Poverty Gap – why we spend twice what it takes to solve poverty
The poverty gap is the income necessary to move an individual or family out of poverty. The poverty gap for the nation is the total cost of moving every American out of poverty. The total Poverty Gap for the country totaled $279 billion in 2022. That same year, we spent $623 billion on 13 welfare programs. Therefore, we spent over twice as much money on welfare as it would take to merely hand out cash and move every American out of poverty. Here is the data and why this occurs.
Why are those in poverty not working?
The Census Bureau reported that only 7% of those in poverty were not working because they could not find work. The reasons for not working included school, illness, disability, home, or family. More.
The war on poverty
A sophisticated society wants to take care of its citizens in need. The goal for those unable to help themselves is pretty straightforward — we want all such people to have comfortable, safe, and rewarding lives. We strive to find the resources and care to do that. For those who can help themselves, the goal is expanded. We want to give this category a “hand up” so the poor can lead lives of financial independence. How this is accomplished has proved to be elusive and remains controversial today. Here is the U.S. history of the war on poverty.
Poverty fight controversy
Fighting poverty has been controversial throughout the history of America and in Europe before that. It centers on one central question related to the poor population, which is of sound mind and body. The question is, does handing out financial aid make the poor stronger or weaker? Undoubtedly, the poor should be befriended and helped to advance with advice, encouragement, and gaining life skills. But financial aid, particularly long-term assistance, is not so simple. Does financial aid help people advance toward financial independence over time, or does it weaken the resolve of those in poverty and lead to dependency?
Americans fall into one of two broad camps. One side believes people need help, which is proof enough to spend what is necessary for as long as required. The other side believes people must work hard and fend for themselves, and long-term aid weakens people’s resolve and personal responsibility. This controversy is as unresolved today as in the past. More on the purpose of welfare. More on the issue.
Do most people experience poverty in their lifetime?
Yes – most people in America start their lives after high school with little money or earning power. They begin their independent lives by getting an education or entry-level jobs. Poverty is measured simply by a person’s income; most people are technically in poverty at this stage of life. But most young people don’t view that negatively and know they are moving forward to a life of financial independence.
How to avoid poverty
The simple answer to avoiding poverty is to work full-time. Only 2% of those working full-time are in poverty. The poverty line for a single adult is $14,880. That translates to $7.15 an hour for a full-time job at 2,080 hours a year. For a single adult who is the breadwinner for a family of four, the poverty line is $29,950 in annual earnings or $14.40 an hour in wages.
More specifically, if you do three things, you can avoid poverty: complete at least a high school education, work full time, and wait until age 21 and get married before having a baby. More.
Poverty is a blight on the American psyche. Why?
Poverty is a blight on the American psyche because a nation as wealthy as ours should not have so many people living in poverty. In our hearts and souls, we know that as citizens of that nation, we can and should do better. But how to do better has proved elusive and highly controversial. Complicating this issue is a massive labyrinth of complex government programs we barely understand (see U.S. Welfare Page). Should we throw our hands in the air and rely on them to solve the problem? Or is that approach a cop-out because the government has barely made a dent in solving the poverty issue? Here is a book addressing this theme.
Poverty from the bottom up, not the top down
We tend to think of poverty on a societal or social level. But we all know poverty personally. Most of us started as young adults with very little and worked our way up. Many of us know relatives or friends struggling financially, some with few assets. We volunteer or give to charities aimed at helping the poor, the homeless, the addicted, or the frail. Many of us are raising our kids, striving to get them a good education and helping them launch a financially independent and good life. We aim to help them avoid a life of poverty. From the bottom up, this is our view of poverty. It is not inconsequential.
Yet ordinary citizens have a limited impact on our national welfare system. As welfare has grown nationally, citizens have stepped back and let the government wage the war on poverty. Was that intended or unintended? Here are five past presidents’ views.
Here are great resources and information on how to help the poor
The pauperization of the poor – no more
Unconditional Giving or Reciprocity in Welfare
The Bible and how to help the poor
Benjamin Franklin’s view on helping the poor
The Politics of Poverty and the Poverty-Industrial Complex
The politics of poverty play out at the national level in the complex welfare system and its programs. There are 13 large welfare programs, which include food, housing, and other aid. The politics of the federal government’s involvement with the poor began upon the nation’s founding. The view of the day was that welfare was not a proper function of the federal government. That changed in the 1930s during the great depression with the advent of the first welfare program, Aid to Families with Dependent Children. More.
Today, the federal government’s role is vast and influential, leading to the creation of the poverty-industrial complex. This refers to the thousands of government employees and contractors making a living on programs for the poor. This includes large federal agencies and departments focused on food, housing, homelessness, energy, phones, addiction, school lunch, preschool, child care, and other services and aid. The vastness of the poverty industrial complex creates the worry that the system is more concerned about its existence than that of solving the poverty problem.
Conclusion
We know a lot about poverty in the U.S. We know how to measure it and who is in it. But how to solve it has remained elusive. Since the 1960’s we have had a stubborn 10% of the population in poverty regardless of the expansion of welfare or plentiful jobs. We know poverty personally because we live in it or have worked hard to transcend it. However, this vast experience across the nation seems to have no influence on the war on poverty at the federal level.
We want our government to solve the poverty problem, which is unrealistic. The government can supply aid, but that can’t solve poverty alone. It can mask it. But it can’t be solved if that means moving people to financial independence. That requires those in poverty to obtain a primary education, work ethic, and make good life decisions. Those things don’t happen without personal guidance, care, and enthusiasm. The government doesn’t and can’t supply that.
Americans have big hearts and don’t want anyone to live in poverty. Better yet, we want everyone to work hard and achieve financial independence. However, achieving that goal will require a different approach to the problem. The American people must step up and get involved, one person and family at a time.