Making Sense of the Census Bureau’s New Poverty Stats

The U.S. Census Bureau announced today that one in seven Americans lived in poverty last year. One in five children in this country lived in poverty in 2009. As high as the number is, it is only a small increase from 2008.

The new figures also say that the number of Americans living in poverty hit a 51-year high last year and that the poverty rate was the highest since 1994.

(Remember the rate compares the number living in poverty to the total population. The number of people living in poverty also is influenced by population growth. As you gain population, you can expect to gain impoverished persons too, but the rate tells us that even considering populations, the problem is growing.)

In a summary of its key findings
, the Census Bureau said:

“The nation’s official poverty rate in 2009 was 14.3 percent, up from 13.2 percent in 2008 — the second statistically significant annual increase in the poverty rate since 2004. There were 43.6 million people in poverty in 2009, up from 39.8 million in 2008 — the third consecutive annual increase.”

The increases ran across the board except when it came to older adults:

  • “The poverty rate in 2009 was the highest since 1994, but was 8.1 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available. The number of people in poverty in 2009 is the largest number in the 51 years for which poverty estimates are available.
  • “In 2009, the family poverty rate and the number of families in poverty were 11.1 percent and 8.8 million, respectively, up from 10.3 percent and 8.1 million in 2008.
  • “The poverty rate and the number in poverty increased across all types of families: married-couple families (5.8 percent and 3.4 million in 2009 from 5.5 percent and 3.3 million in 2008); female-householder-with-no-husband-present families (29.9 percent and 4.4 million in 2009 from 28.7 percent and 4.2 million in 2008) and for male-householder-no-wife-present families (16.9 percent and 942,000 in 2009 from 13.8 percent and 723,000 in 2008).
  • “The poverty rate increased for children younger than 18 (from 19.0 percent in 2008 to 20.7 percent in 2009) and people 18 to 64 (from 11.7 percent in 2008 to 12.9 percent in 2009), while it declined for people 65 and older (from 9.7 percent in 2008 to 8.9 percent in 2009).”

In 2009, the real median house income was $49,777. So when we talk about “middle class” families in America, that is the number that we are referring to at the moment.

The Census Bureau also said the percentage of people who do not have health insurance coverage rose again last year, “from 15.4 percent to 16.7 percent over the same period.”

How is poverty defined, and is the rate flawed?

Many people on the left and the right agree that poverty statistics are flawed. But are they too high or too low? Msnbc.com said:

“The poverty rate is calculated largely using taking the household income of an individual or family and then factoring in the number of people who are living off that income, and their ages. The poverty thresholds were developed in the early 1960s based on data from the time period about how much a family needed to spend, at minimum, on food.

“The data is revised annually to account for inflation but does not vary by location. The measure includes only cash income and excludes income substitutes such as food stamps and housing subsidies.”

So the question arises whether other expenses, such as utilities, transportation, health care, medicine and other necessities, should be included. If so, then the rate might need to reflect how much seniors pay out of pocket for medicine, not just food.

Technically, it would be possible to have a lot of assets but little income and be considered to be living in poverty. On the other hand, you could have a lot of income but have huge debt and not be considered to be living in poverty.

In 2011, the government will start publishing additional data to give a fuller picture of American poverty.

The poverty level is calculated by the Office of Management and Budget, which updates the calculation each year. In 2009, the poverty level for a family of four was $21,954. (2008′s figure was slightly higher.)

For a single person, the poverty line now stands at $10,956. For a two-person household it is $13,991. Here are other calculations from the government.

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