Poverty In The United States: Threshold And Statistics

To most people around the world, poverty in United States of America may sound like a misnomer.

How could the richest and the strongest country in the world whose currency is the reserve currency around the globe and which controls major financial institutions have people suffering from poverty?

Shocking as it may be, it is absolutely true. Poverty has been on the rise in the United States and the global financial crisis of 2008 exacerbated this problem greatly.

Unfortunately, the issue of poverty has remained on the margins of the political discourse and hasn’t been properly addressed by either of the two parties.

Threshold: Definition Of Poverty In United States

The definition of poor differs from country to country. Hence, many ‘poor people’ of United States won’t be considered poor in most other countries of the world. In many ways, poverty is a subjective interpretation and each nation draws its own poverty line in terms of average daily or monthly income.

The US Census Bureau sets the poverty threshold every year with adjustments being made to the previous year’s level based on inflation according to the consumer price index. In 2017, the poverty threshold set by the government was $12,140 for a family of one and $25,100 for a family of four.

This comes to around $31/day per person. Apart from this, the poverty threshold for different family sizes is: $16,460 (two-member family), $20,780 (three-member family), $25,100 (four-member family), $29,420 (five-member family), $33,740 (six-member family), $38,060 (seven-member family) and $42,380 (eight-member family).

People earning below this are considered poor. Again, it is important to emphasize that the definition of poverty is highly relative and varies in each nation depending on that country’s financial condition. In most developing countries, $2/day would be the threshold for poverty while in underdeveloped countries, it would amount to $1/day.

You can see how a ‘poor person’ in USA would be considered well within the middle class of most other societies of the world.

Last year, as per the government statistics, there were 12.3% people in the population of USA who were ‘in poverty’ while under 3% were actually ‘living in poverty.’

The difference between being ‘in poverty’ and ‘living in poverty’ is that the former denotes people who, with the help of social welfare benefits, are able to live in a way that prevents them from being in poverty while the latter are unable to attain those social benefits.

Other Key Statistics Related To Poverty In USA

Among the states of the union, New Mexico has the highest percentage of population that is poor (21.8) while New Hampshire has the lowest (6.6). But these figures are based on the old-fashioned, official method of ascertaining poverty.

According to a new and more rigorous definition of poverty used by the US Census Bureau, California comes at the top of the list with the highest percentage of poor people with 20.6%. While the older system of measuring poverty is around 50 years old, the newer more rigorous method came into being only recently.

The problem in calculating poverty country wide is that each state has a different cost of living. Hence, poverty needs to be assessed individually in each of them.

When we break down the overall poverty figures on the basis of different identities, interesting figures emerge. So, in 2016, among the males of the country, 13.8% lived in poverty, while among the females, 16.3% did.

Gender inequality in terms of poverty rates also shows in the figures regarding the types of families. Among married couples, 5.1% lived in poverty while 13.1% of the single parent families found themselves in that category. But when we look at single parent families with the mother being the only parent, the percentage shoots up to 26.6%.

If we look at the different age groups, 21.2% of the children in the country are living in poverty whereas 9.3% of seniors find themselves in that group.

However, the latter statistic gets pushed up to 14.5% when a Supplemental Poverty Measure, which takes into consideration the cost of healthcare, is applied.

Breakup Of Poverty Figures Based On Racial Identity

Racial identities still play a very important role in the socio-political landscape of the USA; hence poverty also needs to be measured at a racial level. When we break up the poverty figures according to racial identities, the picture that emerges is very interesting.

The section of the population with the highest percentage of poor people is that of Native Americans with 27.6% of their population falling in the ‘poor’ category. Close on their heels are the African-Americans with 26.2% poor people.

Hispanics don’t fare too better as they have 23.4% poverty rate while 12.4% of the majority white community are in this group. Very interestingly, Asians have the least percentage of poor people with 12.3%.

The difficulties faced by minorities like Native Americans and African-Americans shows that there is still a lot that needs to be done on the front of social justice and equality.

The relative prosperity of Asians is largely a result of the fact that most of them arrive in the country as highly-qualified professionals rather than poor asylum seekers, hence they fare better.

Raw Numbers

Moving away from percentages, if we look at the raw numbers of poor people and its breakup, there were 40.6 million people living in the United States in 2016.

Of these, 15.3 million were kids and 2.5 million of those children were experiencing homelessness.

It is also worth remembering that while the total number of people suffering from poverty in the country is 40.6 million, 21.3 million of those are living in deep poverty which implies earnings that are less than 50% of the poverty threshold.

Even the UN has stepped into the discussion over poverty in United States with its special rapporteur on extreme poverty Philip Alston pointing out in a report that around five million people in the country live in ‘third world conditions.’

This is embarrassing, to say the least, for the world’s biggest superpower.