November 20th, 2011
Econintersect: The New York Times is reporting that a new U.S. Census Bureau report will be released Monday that finds more than 32% of U.S. residents are living below, at or near the poverty level. The definition used for “near” is that income is less than 50% above the poverty line. The official poverty line for a family of four (two adults, two children) was $22,113 for 2010. However, a new measurement process called the Supplemental Poverty Measurement (SPM), revealed in a report already issued this month by the Census Bureau, establishes a supplemental poverty line at $24,343 for 2010. That means that near poverty is less than $36,515 annual income for a family of four. Click on photo for larger image of poor man.
Follow up:The Census Bureau report has a table that summarizes the adjustments that are made to get the SPM poverty line:
Click on table for larger image.
Adjustments for housing cost variations across geographic areas are also included.
The Census Bureau report states that the SPM is to be used only for getting a better understanding of economic conditions and trends. It will not replace the official poverty line for administration of federal programs.
Here are some demographics of the near poverty population from the Census Bureau:
- 50% are households headed by a married couple
- 49% are suburban
- 28% work full-time, year round
- 20% were "pushed up" from below the poverty line
- More than 50% were dropping down from higher incomes
- 26% are Latino (16% of total population is Latino)
- 18% are black (13% of total population is black)
According to The NYT new definition of near poor creates an increase of 76% in the number of people so classified under the official definition of poverty. That represents approximately 22 million people in the thin slice of family income between $33,170 and $36,515 a year. The Times says that this larger number is dominated by those who are “older, suburban and struggling,” and more than half have fallen into the near poor category from higher previous income levels. This report adds to the findings of the Brookings Institute that poverty is becoming more concentrated geographically and demographically, as reported earlier this month in a GEI News article.
One finding of the new analysis is that the better accounting for the factors shown in the table above finds that a smaller number of people are actually in the abject poverty level than the official accounting process indicates. Because of the safety net features in our current society people are also moving up the “effective income” scale. So we have a betterment of living conditions for some in poverty than appeared to be the case in the official poverty report in September, but the number near, at or below poverty is being swelled by millions dropping into the category from former higher income levels.