Tuesday, September 24, 2019

[NJFAC] Poverty Rates are Pretty Low, but So Are Poverty Lines

by Frank Stricker

Some highlights from Income and Poverty in the United States: 2018, at https://www.census.gov/library/publications/2019/demo/p60-266.html.
1. The 2018 poverty rate--the percentage of the population under federal poverty lines--was 11.8%. Since 1959, the rate has been under 12 eleven times: seven times in the 1970s; three at the end of the Clinton-Greenspan boom (1999-2001); and then only once more, in 2018.
2. Of course, poverty rates are much higher for some social groups. The black rate in 2018 was 20.7%, the Hispanic rate 17.6%. Even after a decade-long economic recovery, one in five black Americans and almost the same fraction of Hispanics were poor.
3. Since they became official policy in the 1960s, poverty thresholds have not been changed much except for inflation adjustments. National wealth and average real incomes have advanced substantially, but poverty lines have not. Today, if you are officially poor, you are farther below average incomes than was true in the 60s. You are relatively poorer.
4. Looking at the dollar amounts of poverty lines is instructive. If you were a single person under 65 in 2018, you were not considered poor if you had an annual income over $13,064 a year. If you were a family of four with two children under 18 and income over $25,466, you were not counted as poor. Really? Many families with $30,000 or even $40,000 are quite poor.
5. The current lines tell us how far we have come using constant-dollar thresholds. But as a measure of deprivation in our time, they are grossly deficient. Why not have poverty thresholds A, continuing the current numbers, and B, for realistic thresholds. We could try B-lines that are 25% or 50% higher. We have the information in Table B-3 of the poverty report. At lines that are 50% higher, the threshold for a family of four with two children is $38,198 and the poverty rate for the U.S. population is 20.1%. (And $38,198 is still not very high.)
6. The poverty report has tons of useful information. For example, on household incomes, Asians lead the pack, with $87,194, and African Americans trail everyone with $41,361. And we are not even talking about wealth and assets, where African Americans are even farther behind.
7. Are female earners catching up? The ratio of female to male median earnings for full-time, year-round workers has increased from 60% in 1959-1960 to 81.6% in 2018. Women's real annual earnings have about doubled since 1959; men's have increased by less than 50%.
Frank Stricker is emeritus history professor at California State University, Dominguez Hills, and a member of NJFAC. The  views in this article are those of the author and not of his organizations.

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