The official poverty rate in the US fell in 2023, but more people fell into economic hardship

The number of Americans living in poverty according to the country’s official definition fell slightly to about 36.8 million in 2023, the Census Bureau said on September 10, 2024. The data released also showed that the poverty rate declined slightly, an alternative method of measuring poverty, but increased as more people in the U.S. faced economic hardship.

The Conversation US asked Mark Rank, a sociologist who studies poverty and economic inequality, to explain the latest numbers and share some of his insights about poverty in America.

What are the most important news?

I think the most interesting aspect of this report is the different trajectories that the two poverty measures have taken in 2023. On the one hand, the official poverty measure fell from 11.5% in 2022 to 11.1% in 2023. At the same time, the supplementary poverty measure, an alternative method of measuring poverty introduced in 2011, rose from 12.4% last year to 12.9% in 2023.

The official poverty rate fell because total household income rose slightly in 2023 — even after accounting for inflation — according to other census data. But like many poverty experts, I believe the supplemental poverty measure is a better indicator of what’s going on because it takes into account household spending as well as tax credits and the impact of government anti-poverty programs.

It turns out that a major reason the current supplemental poverty line is rising is because Social Security benefits and the Supplemental Nutrition Assistance Program – also known as SNAP or “food stamps” – lifted fewer people out of poverty in 2023 than in 2022.

The additional poverty measure also increased due to higher out-of-pocket medical expenses in 2023 than in 2022.

Are there more meaningful ways to measure poverty in America?

The Census Bureau’s annual report provides only a snapshot of poverty from year to year. I think estimating the long-term risk of impoverishment over the lifetime of the average American is a more meaningful approach.

To that end, I conducted a study based on a large, nationally representative dataset from researchers at the University of Michigan who have observed the same households every year since 1968. Based on this analysis, I concluded that a clear majority of Americans will live in poverty for at least one year of their adult lives.

About 58.5 percent of Americans will live below the official poverty line for at least one year between ages 20 and 75, while 76 percent either live in poverty or are at risk of poverty—that is, their income is below 150 percent of the poverty line.

Figures released in the Census Bureau’s annual report show that only about one in nine Americans is living in poverty today. However, my research has found that three in four Americans will experience poverty or near poverty at some point in their lives. The upshot is that poverty should be viewed as an “us” problem, not a “them” problem.

How does poverty in the United States compare to similar economies?

The United States has one of the highest poverty rates among Western industrialized nations. Whether you look at working-age adults, children, people over 65, or the population as a whole, the United States is at the forefront in terms of the extent and depth of poverty.

A key reason for this is that the federal government does much less than its counterparts in many other countries to help people escape poverty. The U.S. social safety net is relatively weak when it comes to protecting Americans from economic impoverishment.

The result is that the percentage of Americans living in poverty in any given year is among the highest among comparable nations.

In addition, the extent of income and wealth inequality in the United States tends to be more extreme than in other high-income countries.

How do you interpret the long-term patterns of poverty rates in the United States?

The United States made significant progress in reducing poverty in the mid-20th century. The poverty rate was halved from 22.4 percent in 1959 to 11.1 percent in 1973.

This improvement was due to the robust economy of the 1960s and government initiatives known as the “War on Poverty.” Since 1973, however, the overall poverty rate has fluctuated between 11 and 15 percent, tending to decline somewhat during periods of economic growth and rising during periods of economic stagnation and recession.

The official poverty rate of 11.1% in 2023 is the same as the poverty rate in 1973. The supplementary poverty rate, which will be 12.9% in 2023, reflects a similar lack of progress. It was first calculated in 2009 and was 15.1% at the time.

However, there are two major success stories.

First, older Americans are less likely to experience poverty.

In 1959, 35.2% of people over 65 lived in poverty—the highest rate of any age group. In 2023, according to the official rate, only 9.7% of older Americans lived in poverty, one of the lowest rates of any age group.

The main reason for this decline was the expansion of welfare and the introduction of the Medicare and Medicaid programs in 1965. Without these programs, poverty among older Americans would rise to an estimated 40%.

The other big success story is that the share of children living in poverty in the United States fell significantly in 2021. This was due to the expansion of the child tax credit and the stimulus packages that the federal government paid to all Americans starting in 2020, when the Covid-19 pandemic was wreaking havoc on the economy.

As a result of these and other measures, the additional poverty rate among children fell by almost half, from 9.7% in 2020 to 5.2% in 2021. With the phasing out of these benefits, the child poverty rate has returned to pre-pandemic levels, rising to 13.7% in 2023, according to the additional poverty rate – the highest rate since 2018.

This article is republished from The Conversation under a Creative Commons license. Read the original article.