Fifty years ago, President Lyndon Johnson used his first State of the Union address to urge “all-out war on human poverty and unemployment in these United States.” The War on Poverty, as the set of social programs enacted in 1964-1965 came to be called, was arguably the most ambitious domestic policy initiative since the Great Depression. But for decades, politicians and social scientists have argued about whether Johnson’s antipoverty programs have lifted people out of destitution, trapped them in cycles of dependency, or both.
Critics note that the official poverty rate, as calculated by the Census Bureau, has fallen only modestly, from 19% in 1964 to 15% in 2012 (the most recent year available). But other analysts, citing shortcomings in the official poverty measure, focus on a supplemental measure (also produced by the Census Bureau) to argue that more progress has been made. A team of researchers from Columbia University, for example, calculated an “anchored” supplemental measure — essentially the 2012 measure carried back through time and adjusted for historical inflation — and found that it fell from about 26% in 1967 to 16% in 2012.
What’s inarguable, though, is that the demographics of America’s poor have shifted over the decades. Here’s a look at what has, and hasn’t, changed, based on the official measure. (Note: The reference years vary depending on data availability.)
Far fewer elderly are poor: In 1966, 28.5% of Americans ages 65 and over were poor; by 2012 just 9.1% were. There were 1.2 million fewer elderly poor in 2012 than in 1966, despite the doubling of the total elderly population. Researchers generally credit this steep drop to Social Security, particularly the expansion and inflation-indexing of benefits during the 1970s.
But childhood poverty persists: Poverty among children younger than 18 began dropping even before the War on Poverty. From 27.3% in 1959, childhood poverty fell to 23% in 1964 and to 14% by 1969. Since then, however, the childhood poverty rate has risen, fallen and, since the 2007-08 financial crisis, risen again.
Today’s poor families are structured differently: In 1973, the first year for which data are available, more than half (51.4%) of poor families were headed by a married couple; 45.4% were headed by women. In 2012, just over half (50.3%) of poor families were female-headed, while 38.9% were headed by married couples.
Poverty among blacks has fallen sharply: In 1966, two years after Johnson’s speech, four-in-ten (41.8%) of African-Americans were poor; blacks constituted nearly a third (31.1%) of all poor Americans. By 2012, poverty among African-Americans had fallen to 27.2% — still more than double the rate among whites (12.7%, 1.4 percentage points higher than in 1966).
But poverty has risen among Hispanics. Poverty data for Hispanics, who can be of any race, wasn’t collected until 1972. That year, 22.8% lived below the poverty threshold. In 2012, the share of Hispanics in poverty had risen to 25.6%. But the U.S. Hispanic population has quintupled over that time. As a result, more than half of the 22 million-person increase in official poverty between 1972 and 2012 was among Hispanics.
Topics
Economic InequalityPoverty
By Kathryn Hazelett
Editor’s note: This is the third in a series of blog posts to critically examine how poverty is defined, measured, and talked about, and how those conversations influence public policy.
I know, I know. We’ve been talking about poverty. Why are we now talking about the cost of food in the 1950s? Well, as it turns out, poverty (at least our measurement of it) and the cost of food in the 1950s are intrinsically linked. How?
Back in the 1960s, there was an employee of the Social Security Administration named Mollie Orshansky. She was tasked with answering a Congressperson’s question about how much money a retired couple would need annually in order to retire. She had studied math and statistics in college and her research on that mythical retired couple’s needs led to more research projects (resulting, among other things, in scaling for family size) and eventually to the official poverty line that we STILL USE today.
Ms. Orshansky looked at US Department of Agriculture data (she had previously been a researcher at the USDA and was familiar with the data) and discovered that in 1955, the average household with three or more people spent about one-third of its income on food, which meant that about two-thirds of income was spent on everything else. Using the cost of a healthy diet as the basis and multiplying it by three would then give an estimate of the average amount necessary to meet basic needs. Remember basic needs from our earlier discussion on poverty? Here’s where we tie the idea of basic needs to an actual dollar amount.
At that time, the USDA tracked an “economy food plan,” which was the lowest cost, minimally nutritious diet. (Again, this is another spot where how we define needs plays a rather large role.) Mollie took that number, multiplied it by three and – voilá! – she established a basic poverty threshold. This calculation is still the basis of our poverty measurement today, with a revision in 1969 and adjustments made for Hawaii and Alaska.
In the 1960s, this measure was a good approximation of family costs, but the cost of food in the average family’s diet doesn’t cost as much percentage-wise today. Based on the Bureau of Labor Statistics’ 2017 data on consumer expenditures, the cost of food makes up about 12.8 percent of annual income these days. If we stuck with Orshansky’s elegant logic, the cost of food would be multiplied by 7.8 rather than three to determine the cost of basic needs.
The point is that how we measure poverty matters. Having a measure that accurately reflects real family needs (and not just the cost of food in the ‘50s) is a must.
Poverty is the human condition of being unable to obtain or provide a standard level of food, water and/or shelter for you or your family.
It exists in every country in varying degrees, and is unlikely to disappear anytime soon. The United States is considered the richest country in the world, and yet 34 million of its residents live in poverty.
Poverty is measured in two ways – absolute poverty and relative poverty.
Absolute poverty looks at the goods and services someone (or a family) cannot obtain.
Relative poverty looks at the context of the need, how one social group compares to others.
The official method of calculating America’s poverty levels was developed in the 1960s and has not been refined substantially since then, although critics maintain that the government overstates the U.S. poverty level because it counts people as impoverished who in generations past would be considered as not living in poverty.
The highest poverty rate on record was 22 percent (1950s). The lowest was 10.5% (2019).
How is Poverty Defined in America?
According to the U.S. Census Bureau’s 2019 Current Population Report, 34 million Americans are considered impoverished – 10.5% of the country’s population. (The census supplemental poverty rate, which adjust for how government programs keep people out of poverty, was at 11.7% in 2019.) The poverty rate for American children was 14.4%, the lowest since 1973, and the rate for people 65 and older was 8.9%.
Among the most impoverished are:
- Those living in female-headed households with no husband present (24.3%).
- Young adults without a high school diploma (23.7%).
- Those living in a family whose head is unemployed (26.4%).
- Minorities (18.8% for blacks).
These numbers actually represent relatively good news. There were 4.2 million fewer people in poverty in 2019 than the year before, and the poverty rate is the lowest since the statistic was first kept in 1959. The 2019 mark was the fifth consecutive annual decline in poverty. Poverty rates declined for all race and Hispanic origin groups.
However, the Census Bureau numbers were compiled before the COVID pandemic sent the economy into a tailspin. Columbia University’s Center on Poverty & Social Policy estimated how the supplemental poverty rate changed on a monthly basis. Assessing the pre-covid rate at 15% (compared to the Census Bureau’s 10.5%), the center said the poverty rate peaked at 17.3% in August 2020, falling to 16% two months later, but concluded it would have been much worse without extraordinary government intervention.
Measuring the extent of poverty does nothing to ameliorate the lives of the poor, but compiling and understanding poverty statistics is essential to solving, or at least addressing, the problem.
Governments, policy makers and society at large depend upon precise and timely information about poverty to create and deliver the most effective solutions. The goal is to chip away, bit by bit, family by family, and community by community, at the scourge of poverty.
Where Is Poverty Most Common in the U.S.?
The face of poverty for most Americans is pictures of families in rundown housing in large cities where the industry has moved away.
The true face of poverty, however, is found in rural areas of the South and Southwest regions of the U.S. where living conditions are even more run down and industry never really started up.
Nine of the 10 states with the highest poverty rates (two year average, 2018-19) in the U.S. are in the South. That includes Mississippi (19.4% of population below the poverty line); Louisiana (18.4%), Arkansas (15.0%), West Virginia (14.9%), Kentucky (14.6%), Alabama (14.4%), South Carolina (13.9%), Georgia (13.5%) and North Carolina (12.9%) lead the way.
The other is New Mexico (16.0%).
These areas have a long history of poverty and there are many factors contributing to it, but the most obvious are that they were agricultural economies first and foremost with light emphasis on education and innovation.
Absolute Poverty
Absolute poverty is a measure of the minimal requirements necessary to afford the minimal standards of life-sustaining essentials — food, clothing, shelter, clean water, sanitation, education and access to health care. The standards are consistent over time and are the same in different countries. For example, one absolute measurement is the percentage of a population that consumes enough food daily to sustain the human body. This standard – 2,000 – 2,500 calories per day – is applied worldwide and across all cultures.
The World Bank defines poverty in absolute terms:- Those living on less than $1.90 per day live in extreme poverty.
- Those living on less than $3.20 per day in lower middle income countries and less than $5.50 in upper middle income countries live in moderate poverty.
For instance, in 2017, 6.5 million people in Europe and Central Asia lived in extreme poverty, compared with almost 431 million in Sub-Saharan Africa.
The World Bank expects the COVID pandemic to push between 88 million and 115 million people worldwide into extreme poverty in 2020 and up to 150 million in 2021, reversing improvements that had been taking place. Global poverty had dropped about 1% per year between 1990 and 2015, the World Bank reports.
Relative Poverty
Relative poverty is a measurement of income inequality within a social context. It does not measure hardship or material deprivation, but rather the disparities of wealth among income groups.
For example, in the United States, a household that has a refrigerator, televisions, air conditioning can be considered impoverished if its income falls below a certain threshold. In other countries, those households might be thought of as wealthy.
Measuring U.S. Poverty
The federal government’s measurement of U.S. poverty was developed in the early 1960s by Mollie Orshansky, an economist and statistician at the Social Security Administration. Orshansky based her original poverty thresholds on the Department of Agriculture’s economy food plan, which detailed what it considered the least expensive, yet still nutritionally adequate, diet for American families that were experiencing a temporary shortage of funds.
She then deduced from Department of Agriculture surveys that average families of three or more people spend about one-third of their money on food. By multiplying that amount by a factor of three, to include all other family expenses, and applying various weighted data, Orshansky established a detailed matrix of 124 poverty thresholds for families of different sizes and compositions. (Today, there are 48 thresholds.) Poor families were those whose yearly income was below the threshold for their category.
Over the years, many attempts have been made to improve, update or even replace Orshansky’s methodology. In 1992, a National Academy of Science (NAS) panel suggested revisions to the system based on alternative definitions of both income and needs, suggesting that the traditional approach no longer provided an accurate picture of poverty. Legislation based on those findings has been introduced in Congress from time to time but has never been enacted.
The Census Bureau uses several alternative methods to calculate the poverty indices, including the American Community Survey (ACS). In 2010, the Census Bureau introduced the Supplemental Poverty Measure (SPM) to reflect long-term changes in government policies that altered disposable income available to families and therefore their poverty status. However, the official rate is still based on data from the Bureau’s Current Population Survey Annual Social and Economic Supplement (CPS ASEC).
Overstating Poverty
Critics of the current method of calculating poverty thresholds point out that the CPS ASEC measures only monetary income (e.g., earnings, Social Security income, veterans payments, workers’ compensation, pensions), but does not include other sources of in-kind or non-cash gifts from public or private sources, including:
- Benefits from anti-poverty programs such as food stamps, federal housing subsidies, school lunches and Medicaid.
- Tax advantages such as the Earned Income and Child Tax Credits.
Adding these sources of income would change the poverty numbers considerably.
They also contend that many families reported as living in poverty are not poor in the ordinary sense or as understood by most Americans. Impoverished families often have household appliances and adequate food, and live in adequate shelter — a higher standard of living than even middle class families maintained several decades ago.
Therefore, current government methodology of measuring poverty, which calculates income inequality and not actual material deprivation, could be overstating the extent of poverty in the United States.
Historical Changes in Poverty Levels
In the late 1950s, the poverty rate was approximately 22%, with just shy of 40 million Americans living in poverty. The rate declined steadily, reaching a low of 11.1% in 1973 and rising to a high of nearly 15% three times – in 1983, 1993 and 2011 – before hitting the all-time low of 10.5% in 2019. However, the 46.7 million Americans in poverty in 2014 is the most ever recorded.
Since the late 1960s, the poverty rate for people 65 or older has fallen dramatically. This drop could be ascribed to the enactment of the Medicare Program in 1965, which dramatically lowered out-of-pocket health care costs for this age group.
What are the Causes and Effects of Poverty in America?
Impoverished families tend to have less education, more health problems and less access to nutritionally adequate food. They also are more likely to live in high-crime areas.
Poverty and Education
The more advanced one’s education, the greater the chance of achieving a secure economic future. High school graduation rates for African-American and Hispanic students are almost 20 percentage points lower than for other ethnic groups, while their poverty rates greatly exceed the average.
Without the knowledge and skills required for well-remunerated work in the modern workplace, each succeeding generation of undereducated adults merely replaces the one before it without achieving any upward mobility or escape from poverty.
Poverty and Health
Health is also strongly related to income. Poor people have higher mortality rates, a higher prevalence of acute or chronic diseases and more emotional and behavioral issues.
- The life expectancy of the richest 1% in the U.S. was 14.6 years longer than the poorest 1% for men and 10.1 years for women, according to a 2016 report by the Journal of the American Medical Association.
- The mortality rate for African-American infants (10.8 per 1,000 live births) was more than double that of white infants (4.6) in 2018, according to the Centers for Disease Control and Prevention.
- Those in impoverished neighborhoods have a higher risk for mental illness, chronic disease,higher mortality, and lower life expectancy, according to the Office of Disease Prevention and Health Promotion.
- Poor children are more than twice as likely to have unhealthy levels of lead in their blood than other children, according to the CDC.
Poverty and Food
Food poverty is defined as the inability to obtain healthy and affordable food. Poorer families tend to have low intakes of fruit and vegetables and high intakes of junk food. They also tend to suffer more from cancer, diabetes, obesity and heart disease.
While food insecurity and poverty are not the same, they are related. Food insecurity means that that the availability of nutritionally adequate food or the ability to acquire it is limited or uncertain. In 2019, 10.5% of U.S. households were food insecure, according to the U.S. Department of Agriculture (USDA). Blacks and Hispanics were more than twice as likely to face food insecurity than whites.
Poverty and Crime
The relationship between poverty and crime is complex, and many factors are associated with poverty and crime, including unemployment, population density, high school dropout rate and incidence of drug use.
While difficult to quantify, some studies have indicated that as a particular population’s poverty rate increases, crime, particularly violent crime, tends to increase, as well.
Government Programs that Lift or Help Keep People Out of Poverty
Government benefits keep millions of Americans out of poverty, mostly women, children and the elderly. Social Security alone keeps approximately 27.3 million people above the poverty line, including 17.9 million senior citizens 65 or older. Refundable tax credits, such as the Earned Income Tax Credit and the Child Tax Credit, kept 7.9 million people out of poverty, and food stamps have the same result for 3 million people.
If non-cash government aid programs were counted in the Census Bureau thresholds, food stamps would lift another 3.9 million Americans out of poverty. In addition, the combined Earned Income Tax Credit and Child Tax Credit kept 9.2 million families from falling into poverty in 2010.
Other government programs include:- Community Services Block Grant
- Head Start
- Low-Income Home Energy Assistance
- Medicaid
- Medicare prescription drug coverage
- Family planning services
- Supplemental Nutrition Assistance Program (SNAP) (formerly known as food stamps)
- Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
- National School Lunch and Breakfast Programs
- Legal services
- Jobs Corps
Some state and local governments provide programs for the poor, as do some private companies and charities.
How U.S. Poverty Levels Compare to Countries around the World
According to the Organization for Economic Cooperation and Development (OECD), the United States has the third highest poverty rate among the world’s developed countries. The United Nations Children’s Fund (UNICEF) ranks the United States second behind Mexico on a scale of what economists call “relative child poverty” when measured against 35 of the world’s richest nations.
These rankings are not absolute measures. Relative child poverty refers to a child living in a household where the income is less than half of the national median; the relative standards in the United States are high.