Poverty decreased last year, but many Americans are facing economic hardship

The number of Americans living in poverty, according to the country’s official definition, fell slightly to 36.8 million in 2023, the Census Bureau announced on September 10, 2024. The data released also showed that the poverty rate has decreased slightly. However, another way to measure poverty grew, as many people in the US faced economic hardship.

Interview US asked Mark Rank, a sociologist who studies poverty and economic inequality, to explain the latest numbers and share some of his thoughts on poverty in America.

What are the most important issues?

I think the most interesting aspect of this report is the different directions the two poverty rates went in 2023. On the other hand, the official poverty rate decreased to 11.1% in 2023 from 11.5% in 2022. At the same time, more poverty. The average, another measure of poverty introduced in 2011, rose to 12.9% in 2023 from 12.4% last year.

The official poverty rate fell because total household income rose slightly in 2023—even after taking inflation into account—according to some census data. However, like many poverty experts, I believe that the incremental poverty measure is a better indicator of what is happening because it takes into account household expenditures and tax liabilities as well as the effects of government programs on poverty reduction.

It turns out that one important reason for the current increase in the poverty rate is that Social Security benefits and the Nutrition Assistance Program—also known as SNAP (or food stamps)—lift fewer people out of poverty in 2023 than in 2022.

The additional poverty rate increased because out-of-pocket medical expenses were higher in 2023 than in 2022.

Are there reasonable ways to measure poverty in America?

The Census Bureau’s annual report represents only a year-by-year summary of poverty. I think that measuring the long-term risk of poverty over the lifetime of an American is a reasonable approach.

To that end, I conducted a study using a large nationally representative dataset from University of Michigan researchers who tracked the same households each year since 1968. Based on this analysis, I found that a clear majority of Americans will experience poverty. at least one year of their adult life.

Some 58.5% of Americans will earn at least one year below the official poverty line between the ages of 20 and 75, while 76% will experience poverty or near poverty—meaning their income falls below 150% of the poverty line.

Numbers presented in the Census Bureau’s annual report show that nearly 1 in 9 Americans are living in poverty today. But my research shows that 3 out of 4 Americans will experience poverty or near poverty at some point in their lives. The result is that poverty should be viewed as “our” issue rather than “theirs.”

How does poverty in the US compare to what is happening in similar economies?

The US has the highest poverty rate among Western industrialized countries. Whether the focus is on the elderly, children, people over 65, or the population as a whole, the US is near the top in terms of the extent and depth of its poverty.

One of the main reasons is that the federal government is doing far less than its counterparts in many other countries to help people out of poverty. The US safety net is weak when it comes to protecting Americans from economic hardship.

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

In addition, the level of both income and wealth inequality tends to be more extreme in the US compared to other high-income countries.

How do you explain long-term patterns in the US poverty rate?

The US made great progress in reducing poverty in the mid-20th century. The poverty rate halved from 22.4% in 1959 to 11.1% in 1973.

This development was due to the economic strength of the 1960s and the government’s programs known as the war on poverty. However, since 1973, the overall poverty rate has ranged from 11% to 15%. It has tended to decline during periods of economic growth, and has risen during periods of recession and recession.

The official poverty rate of 11.1% in 2023 is consistent with the 1973 poverty rate. The cumulative poverty rate, which stood at 12.9% in 2023, shows a similar lack of progress. It was first counted in 2009, when it stood at 15.1%.

There are two major success stories, however.

First, older Americans have become less likely to experience poverty.

In 1959, 35.2 percent of people 65 and older were poor—the highest rate of any age group. In 2023, only 9.7% of older Americans were in poverty, as indicated by the official rate, and that was among the lowest of any age group.

The main reason for these cuts was the expansion of Social Security benefits and the introduction in 1965 of the Medicare and Medicaid programs. Without these programs, poverty among elderly Americans will rise to 40%.

Another big success story is that the share of US children living in poverty dropped significantly in 2021 due to the increase in the child tax credit and economic impact payments that the federal government made to all Americans starting in 2020, when the COVID-19 pandemic broke out. economic disruption.

As a result of these and other policies, the extreme poverty rate among children has almost halved to 5.2% in 2021, from 9.7% in 2020. With the expiration of these benefits, child poverty rates have returned to pre-pandemic levels. . In terms of additional poverty, it rose to 13.7% in 2023—the highest level since 2018.

Mark Robert Rank is a professor of sociology of arts and sciences at Washington University in St.

This article has been republished from The conversation under a Creative Commons license. Read the first article.