1 in 6 Americans in Poverty, Revised Census Measure Finds


A revised census report released this month shows that the number of Americans living in poverty is three million higher than the official count reported in September.

The supplemental poverty measure takes into account living expenses as well as the effects of government programs like food stamps and tax credits and provides a more reliable assessment than the fifty-year-old formula used to calculate the official poverty rate. Due to out-of-pocket medical costs and work-related expenses like transportation and child care, one in six Americans (or 49.7 million) were living in poverty in 2012.

The new formula, put in place by the Obama Administration two years ago but not yet adopted by Congress, shows that 14.8 percent of Americans age 65 and older are in poverty. Children remained the age group most likely to be living in poverty.

“This is a real incongruity, when 1 in 6 people face economic insecurity here in the richest country in the world,” said Joseph Stiglitz, a Columbia University economist and former chairman of the White House Council of Economic Advisers who has argued for more government action to alleviate income inequality. “When so many citizens are worse off year after year, with food insecurity and health care insecurity, there’s no way you can say that’s a successful economy.”

Food stamps helped lift about five million people above the poverty line. Without food stamps, the poverty rate would increase from 16 to 17.6 percent. Last week, more than 47 million Americans who receive food stamps had their benefits decreased, and Congress started negotiations on further cuts of up to $4 billion annually to the food stamp program.

Unlike the official formula, which assumes the average family spends one-third of its income on food (it is more like one-seventh today), the new formula helps measure the impact of government anti-poverty programs. The new measure finds that without Social Security payments, for example, the poverty rate would rise to 54.7 percent for people 65 and older and 24.5 percent for all age groups. Cutting the earned income tax credit, which helped lift nine million people above the poverty line, would increase child poverty to 24.7 percent.