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Who is Poor?

Poverty

WHO IS POOR?

In 2012, over 15 percent of Americans were poor, and no higher rate has been seen since 1965 (though the current rate was matched in 1983 and 1993). More Americans were poor in 2012 than ever before, over 46.5 million people. Who are they? Our researchers study poverty’s demographics to understand who is poor, size up the poverty gap, and examine poverty trends and dynamics using both the official and alternative measures of poverty.

The official measure of poverty does not take into account in-kind government assistance, the effect of taxes on income, or nondiscretionary expenses. The poverty threshold is based on triple the minimum amount a family needed to buy food in the 1960's, adjusted for inflation. Many are calling for a modern alternative definition that takes into account all family resources and recent spending patterns to get an accurate picture of who is poor.

KEY PUBLICATIONS

Understanding Trends in Poverty in the Pittsburgh Metropolitan Area

CAROL J. DE VITA, SARAH L. PETTIJOHN, KATIE L. ROEGER

In 2010, about one in eight residents (12.1 percent or 280,000 people) in the Pittsburgh region had incomes below poverty, an increase of 8.5 percent since the Great Recession started in 2007. This report gives an overview of poverty trends in the Pittsburgh region, examines how poverty is defined and measured, and identifies the groups most likely to be at risk of being poor. It also documents how nonprofit organizations responded to the recession. For example, about two-thirds reported demand for services increased, but most providers scaled back their operations because of resource constraints. An appendix provides a fact sheet on poverty and nonprofit capacity for each county in the Pittsburgh metropolitan area.
Publication Date: May 31, 2012

Inequality: A Brief Overview

AUSTIN NICHOLS

Income inequality has increased dramatically in the US over several decades, year-to-year variation in incomes has increased a bit less, and economic mobility has changed little. There are many kinds of inequality: equality of opportunity is desirable, but equality of outcomes might not be desirable, if inequality of outcomes motivates productive investment. Recently, the greatest increases in inequality have come at the top of the distribution, with implications for policy and politics, as the majority of resources are concentrated in fewer hands. Tax policy, asset-building policy, and policies directly affecting low-income working families are among the most salient levers.
Publication Date: February 27, 2012

Low-Income Kids Receive 70 Percent of Federal Spending on Children; Disproportionately Vulnerable to Budget Cuts

URBAN INSTITUTE

Children in low-income families would be disproportionately affected by cuts in federal spending, an analysis of public resources spent on children concludes. Low-income children, 42 percent of the child population, received 70 percent of federal spending and tax expenditures in 2009 geared toward those 18 years or younger.
Publication Date: March 13, 2012

Today's Children, Tomorrow's America: Six Experts Face the Facts

C. EUGENE STEUERLE, ROBERT D. REISCHAUER, MARGARET SIMMS, OLIVIA GOLDEN, KIM RUEBEN, LISA DUBAY

Urban Institute scholars from diverse disciplines tackle a simple-to-state, hard-to-answer question: How can solutions to our national and state budget crises fit the facts about children in the United States? In their responses, the contributors wrestle with recent and approaching economic and demographic challenges in different ways and bring very different experiences to bear.
Publication Date: October 25, 2011

Poverty in the United States

AUSTIN NICHOLS

The U.S. Census Bureau has announced that the poverty rate jumped to 15.1 percent in 2010, up from 14.3 percent in 2009 and 13.2 percent in 2008. This 18-year high still understates the dire straits of many Americans today. The devastation of poverty grows more severe over time as individuals exhaust private resources and temporary benefits.
Publication Date: September 13, 2011

Unemployment and Poverty

AUSTIN NICHOLS, THOMAS CALLAN

Poverty is higher among the unemployed. In 2010, 30 percent of the long-term unemployed were poor, and 66 percent of single parents unemployed more than 26 weeks were poor.
Publication Date: September 13, 2011

Who are Low-Asset Low-Income Families?

MAURICIO SOTO

More than a quarter of U.S. families are in the bottom 40 percent of both the net worth and the income distributions. For these families, neither assets nor income offers much protection against financial shocks. This fact sheet describes the characteristics of these families. Low-asset low-income families tend to be younger, single, less educated, in poorer health, and minority.
Publication Date: September 01, 2011

Workshop on State Poverty Measurement Using the American Community Survey

DAVID BETSON, LINDA GIANNARELLI, SHEILA R. ZEDLEWSKI

This workshop discussed issues surrounding the potential development of a Supplemental Poverty Measure (SPM) at the state level using the American Community Survey (ACS). Academics and researchers from around the country participated, including experts that have implemented the SPM for eight different areas. The discussion summarized recent experiences and challenges in implementing the SPM on the ACS and geographic adjustments to the poverty thresholds. The summary highlights the key issues and ideas for next steps.
Publication Date: July 18, 2011

Dynamics of Being Disconnected from Work and TANF

PAMELA J. LOPREST, AUSTIN NICHOLS

This paper analyses the economic well-being of low-income single mothers who "disconnected" – that is neither working nor receiving public assistance benefits (Temporary Assistance for Needy Families Program (TANF) or disability benefits). We find that the percentage of disconnected single mothers increased over time. These mothers are extremely poor and are more likely to have challenges that make work more difficult than other single mothers. In addition, many mothers remain in this situation for a year or more. Some are helped by living with other family members or cohabiting and through receipt of public food and housing benefits.
Publication Date: May 31, 2011

Characteristics of Low-Income Single Mothers Disconnected from Work and Public Assistance

PAMELA J. LOPREST, AUSTIN NICHOLS

Families headed by low-income single mothers who are not working or receiving public cash benefits ("disconnected families") are among the most vulnerable in our society. This fact sheet shows that the number of families in this situation is increasing over time. It also describes their income, receipt of noncash benefits like housing and food assistance, living arrangements, and characteristics that may impede work.
Publication Date: August 17, 2011

Poverty Among Older Americans, 2009

PHILIP ISSA, SHEILA R. ZEDLEWSKI

About one in three Americans age 65 or older lived in low-income families in 2009, including 8.9 percent in poverty. Poverty rates were much higher among those who did not complete high school, lived alone, or had poor health. This data brief reports how poverty and near-poverty rates among older Americans in 2009 varied by demographics, living arrangements, and health status; shows that poverty and near poverty among seniors declined between 2007 and 2009; and describes income sources for poor and non-poor seniors.
Publication Date: January 27, 2011

Measuring Poverty at the State Level

SHEILA R. ZEDLEWSKI, LINDA GIANNARELLI, LAURA WHEATON, JOYCE MORTON

This study implements the modern poverty measure for Minnesota using the American Community Survey (ACS) and simulates the potential effects of alternative safety net policies on poverty. The analysis uses the TRIM3 microsimulation model to correct for survey underreporting and to add information required for this poverty measure, including near-cash benefits, taxes and nondiscretionary expenses. The alternative simulations apply new program rules and behavioral assumptions to recalculate family resources and poverty. The results show the importance of the modern poverty measure for analyzing state policies and also highlight the numerous decisions and imputations required to implement the new measure.
Publication Date: March 01, 2010

Measuring Poverty

LAURA WHEATON, JAMYANG TASHI

Many agree that the official measure of poverty in the United States is flawed. Experts have recommended an alternative measure of poverty that includes all family resources net of taxes and nondiscretionary expenses and updates the thresholds to reflect current spending patterns. This fact sheet describes the official poverty measure and an alternative measure developed by the National Academy of Sciences, and uses data from the 2006 American Community Survey to estimate the extent of poverty in Minnesota under the official and alternative measure.
Publication Date: February 15, 2010

Transitioning In and Out of Poverty

SIGNE-MARY MCKERNAN, CAROLINE RATCLIFFE, STEPHANIE R. CELLINI

Slightly more than half of the U.S. population experiences poverty at some time before age 65. Roughly half of those who get out of poverty will become poor again within five years. Who is more likely to enter poverty? How long are people poor? And what events are associated with falling into and climbing out of poverty? This fact sheet summarizes key findings from the poverty dynamics literature to describe how, why, and when people move in and out of poverty.
Publication Date: September 10, 2009

Racial and Ethnic Disparities Among Low-Income Families

MARGARET SIMMS, KARINA FORTUNY, EVERETT HENDERSON    

Low-income status in the United States varies significantly by race and ethnicity. Of the more than 13.4 million families with children living on incomes less than 200 percent of the federal poverty level, 30 percent are Hispanic, 22 percent are black or African American, and 6 percent are other nonwhites. This fact sheet provides statistics on racial and ethnic differences in family structure, work effort, nativity or immigration status, earnings, and education.
Publication Date: August 07, 2009

Economic Modeling of Child Poverty and Prevention Council Initiatives

LINDA GIANNARELLI, SHEILA R. ZEDLEWSKI

This report presents estimates of the potential effects of numerous proposals designed to reduce child poverty in the state of Connecticut (CT). The results show the effects of initiatives to increase adult education, expand and improve the safety net, and strengthen families through increased child support and post-welfare case management. The results show the effects using two measures of poverty (the official measure and a modernized measure that includes all family resources and updated poverty thresholds) as well as the sensitivity to assumptions about the effects of initiatives on employment and earnings.
Publication Date: August 6, 2009

Financial Hardship before and after Social Security's Eligibility Age

RICHARD W. JOHNSON, GORDON MERMIN

Although poverty rates for Americans age 65 and older have plunged over the past half century, many people continue to fall into poverty as they approach 62, Social Security's early eligibility age. Among those who did not complete high school, hardship rates increase from 23 percent at age 52 to 54 to 31 percent at age 60 to 61, a relative increase of 36 percent. Hardship rates decline after age 62, when most people qualify for Social Security. These findings highlight the fragility of the income support system for Americans in their fifties and early sixties.
Publication Date: March 20, 2009

Q&A: New Income and Poverty Statistics and the Social Safety Net (Opinion)

GREGORY ACS, LINDA J. BLUMBERG, HARRY HOLZER, PAMELA J. LOPREST, JENNIFER EHRLE MACOMBER, KARIN MARTINSON, SIGNE-MARY MCKERNAN, CYNTHIA PERRY, CAROLINE RATCLIFFE, MARGARET SIMMS, MARGERY AUSTIN TURNER, SHELLEY WATERS BOOTS

The Census Bureau released its annual report on income, poverty, and health insurance coverage for the U.S. population on August 26, 2008. According to the report, median household income increased by 1.3 percent in 2007, while the overall poverty rate dipped slightly and the number and percentage of people without health insurance decreased. While the overall numbers were positive, not everyone shared in the economic gains. The number and percentage of children in poverty increased, and households in the lowest 40 percent of the income distribution had no significant income gains.
Publication Date: August 27, 2008

Poverty Facts, 2004 (Fact Sheet/Data at a Glance)

LAURA WHEATON, JAMYANG TASHI

In 2004, 36.6 million people—or 12.6 percent of the U.S. population—were poor. The “poverty gap”—the amount of additional income required to remove all Americans from poverty—was $105.6 billion. Poverty rates were highest for African Americans, Hispanics, women, and persons under 25. Without government benefits, 61 million people would be poor. Social Security and other social insurance programs remove 21 million people from poverty. Means tested programs remove 3 million people from poverty. If food and housing assistance were counted as income for poverty purposes, an additional 7.6 million people would be counted as not poor.
Publication Date: April 23, 2008

Do Assets Change the Racial Profile of Poverty among Older Adults?

BARBARA BUTRICA

According to the federal government, elderly poverty rates among blacks are nearly triple and among Hispanics are more than double those of whites. Data from the 2004 Health and Retirement Study on adults age 65 and older, living alone or with only a spouse, show how assets, which are excluded from the official poverty measure, change elderly poverty overall and between racial/ethnic groups. Adding imputed housing rent and annuitized asset values to resources reduced overall poverty by 1.8 percentage points, but increased racial disparities because blacks and Hispanics have relatively little housing equity or financial assets.
Publication Date: February 29, 2008

How Many Struggle to Get by In Retirement?

BARBARA BUTRICA, DAN MURPHY, SHEILA R. ZEDLEWSKI

This paper uses data from the 2004 Health and Retirement Study to demonstrate how the poverty rate of adults 65 and older changes using alternative resource and threshold measures. Results show that alternative poverty measures that account for health spending produce higher poverty rates than the official measure, even those that include the value of housing and financial assets. Poverty remains concentrated among singles (disproportionately women), blacks and Hispanics, and adults 85 and older regardless of how it is measured because these populations have relatively little housing equity or financial assets.
Publication Date: January 15, 2008

Estimating the Anti-Poverty Effects of Changes in Taxes and Benefits with TRIM3

LINDA GIANNARELLI, LAURA WHEATON, JOYCE MORTON

This report presents an analysis of policies recommended by the Center for American Progress Task Force on Poverty. The analysis uses the TRIM3 microsimulation model. The policies include increasing the minimum wage, expanding the EITC and other tax credits, expanding the child care subsidy system, increasing participation in the Food Stamp Program, rescinding restrictions on legal aliens' eligibility for benefits, and increasing the number of housing vouchers. The analysis focuses on the policies' impacts on poverty, using a broad definition of income—after taxes and child care expenses and including the value of food and housing aid.
Publication Date: April 25, 2007

Understanding Recent Changes in Child Poverty

AUSTIN NICHOLS

Over the past 10 years, U.S. child poverty rates took two sharp turns: a major reduction from 1993 to 2000 followed by a slight hike from 2000 to 2004. Both shifts have been even more dramatic for black and Hispanic children. Such abrupt shifts offer an unusual opportunity to tease out what factors contribute to changes in child poverty. Exploring the driving forces behind trends in child poverty offers insights on policy, as well as on the well-being of children, since child poverty is associated with many negative outcomes in later life—low earnings, reduced educational attainment, teenage childbearing, and physical and mental health problems.
Publication Date:  August 25, 2006.

Events that Trigger Poverty Entries and Exits

SIGNE-MARY MCKERNAN, CAROLINE RATCLIFFE

This research was supported by a Census-funded grant from the JCPR Research Development Grants Program and is based on work funded by the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation under contract # HHS-100-99-0003. The views expressed are solely those of the authors and should not be attributed to the JCPR, or the U.S. Department of Health and Human Services.
Publication Date: December 01, 2002

Transition Events in the Dynamics of Poverty

SIGNE-MARY MCKERNAN, CAROLINE RATCLIFFE

Prepared for the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation contract # HHS-100-99-0003 under Project Officers Laura Chadwick and Susan Hauan. The views expressed are solely those of the authors and should not be attributed to the U.S. Department of Health and Human Services, the Urban Institute, its trustees, or its funders. Direct correspondences to Signe-Mary McKernan at smckerna@ui.urban.org or Caroline Ratcliffe at cratclif@ui.urban.org.
Publication Date: September 01, 2002

How Do Marriage, Cohabitation, and Single Parenthood Affect the Material Hardships of Families with Children?

ROBERT I. LERMAN

This report was prepared for the U. S. Department of Health and Human Services' Office of the Assistant Secretary for Planning and Evaluation under HHS Grant Number 00ASPE359A. The views expressed are those of the authors and should not be attributed to the U.S. Department of Health and Human Services or to the Urban Institute, its trustees, or its funders. The author thanks Kelleen Kaye for useful comments and Stephanie Riegg and Carolina Krawiec for excellent research assistance and advice.
Publication Date: July 01, 2002

Marriage and the Economic Well-Being of Families with Children: A Review of the Literature

ROBERT I. LERMAN

This report was prepared for the U. S. Department of Health and Human Services' Office of the Assistant Secretary for Planning and Evaluation under HHS Grant Number 00ASPE359A. The views expressed are those of the authors and should not be attributed to the U.S. Department of Health and Human Services or to the Urban Institute, its trustees, or its funders. The authors thank our project officer, Kelleen Kaye, and Avner Ahituv for useful comments and Carolina Krawiec for excellent research assistance and advice.
Publication Date: July 01, 2002