These facts are from the National Poverty Center at the university of Michigan (www.npc.umich.edu). I recommend going to their website for more information, as they have the charts and graphs that go with this for a better explanation (my attempt to copy them onto my blog is usually not met with the best of results):
How does the United States measure poverty?
The United States has two tools for measuring poverty. Poverty thresholds are used for statistical purposes such as calculating the number of people living in poverty, and are issued each year by the Census Bureau.
To calculate poverty thresholds, the federal government estimates the annual amount of cash income minimally required to support families of various sizes. The methodology used in this calculation was established in the mid-1960s and has not been updated in the intervening years. The calculation uses pretax cash income and excludes noncash benefits such as public housing, Medicaid, and food stamps.
Poverty guidelines (1) (shown in the table below) are a simplified version of poverty thresholds, and are issued by the Department of Health and Human Services to determine financial eligibility for certain federal programs. (2)
How many people were poor in 2001?
In 2001 roughly 11.7 percent of the U.S. population lived in poverty. Although this number represents a slight increase from 2000, the poverty rate fell steadily during between 1993 and 2000, from 15.1 percent to 11.3 percent.
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Does poverty differ by subgroup?
The national calculation masks considerable variation between subgroups of the U.S. population. For example, poverty rates for blacks and Hispanics typically exceed the national average. In 2001, 22.7 percent of blacks and 21.4 percent of Hispanics were poor, compared to 11.7 percent of the total population. By comparison, 9.9 percent of whites and 10.2 percent of Asians and Pacific Islanders lived in poverty in 2001.
Poverty rates are highest for families headed by single women, particularly if they are black or Hispanic. In 2001, 26.4 percent of female-headed families were poor, while 13.1 percent of male-headed families and 4.9 percent of married-couple households lived in poverty. In 2001, both black and Hispanic female-headed families had poverty rates exceeding 35 percent. (3)
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How many children live in poverty? (4)
Children represent a disproportionate share of the poor in the United States; they are 25.6 percent of the total population, but 35.7 percent of the poor population. In 2001, 11.7 million children, or 16.3 percent, were poor.
Children under the age of 6 are particularly vulnerable to poverty, especially if they live in single female-headed households. 18.2 percent of children younger than 6 lived in poverty in 2001, while 48.9 percent of children younger than 6 who lived in female-headed families were poor. (5)
The poverty rate for children also varies by race and Hispanic origin, as shown in the table below.
Has poverty changed over time?
In the late 1950s, the poverty rate for the total U.S. population was 22.4 percent, or approximately 39.5 million individuals. These numbers declined steadily throughout the 1960s, reaching a low of 12.1 percent, or 24.1 million individuals, by 1969. For the next decade, the poverty rate fluctuated between 11.1 and 12.6 percent, but began to rise steadily again in 1980. By 1983, the number of poor individuals had risen to 35.3 million individuals, or 15.2 percent of the population.
For the next ten years, the poverty rate remained above 12.8 percent, and had climbed to 15.1 percent, or 39.3 million individuals, by 1993. The rate declined dramatically for the remainder of the decade, to 11.3 percent by 2000, before rising slightly in 2001, to 11.7 percent. (6)
How do alternative measurements affect the poverty rate?
The official poverty measure, based on before-tax cash income, has been widely criticized for not accounting for several factors that can affect a family's economic well-being.
While cash welfare programs are taken into account when calculating the official measure, benefits from noncash programs such as food stamps, medical care, housing, and other social services are not included. Taxes paid and tax credits such as the Earned Income Tax Credit (EITC) are also not evaluated.
Since 1979, the Census Bureau has published a variety of experimental poverty measures that attempt to account for various combinations of these factors.(7) In addition, a 1995 panel appointed by the National Academy of Sciences (NAS) suggested a measure that considers taxes paid, tax credits received, geographic differences in cost-of-living, receipt of some noncash transfers, and deductions for some medical, work, and child care expenses.
According to this definition, the 2001 poverty rate was 12.3, rather than 11.7 percent.
Experimental measures also affect the distribution of the poverty rate over time. The chart below displays trends in poverty based on three alternative definitions. The first is the official definition. The second and third consider near-cash government transfers and net capital gains in the definition of gross family income, add in the EITC, and subtract income and payroll taxes and work-related expenses. The third also subtracts out-of-pocket medical expenses.