U.S.

US poor 3 million more than official rate

New measure reveals the poverty rate is higher than officially estimated due to higher medical and living costs

A woman who identified herself as Jessica sits next to the tent where she lives in Camden, N.J.
Andrew Burton/Getty Images

According to a revised U.S. Census calculation released Wednesday, an additional 3 million Americans are considered poor, on top of the 46.5 million the census enumerated in a September report. The new estimate takes into account higher out-of-pocket medical costs and work-related expenses.

The new measure is aimed at providing a fuller picture of poverty but does not replace the official government numbers. Put in place two years ago by the Obama administration, it generally is considered more reliable by social scientists because it factors in living expenses as well as the effects of government aid, such as food stamps and tax credits.

Administration officials have declined to say whether the new measure could eventually replace the official poverty formula, which is used to allocate federal dollars to states and localities and to determine eligibility for safety-net programs.

Based on the revised formula, the number of poor people in 2012 was 49.7 million, or 16 percent of the U.S. population. The 46.5 million officially reported in September, a record number, represented 15 percent.

For the past year, the poverty line under the revised measure varied depending on whether a person owned or rented a home. For a family of four, it ranged from an annual income of $21,400 for homeowners without a mortgage to $25,784 for homeowners with one; among renters, the poverty line was $25,105.

The latest numbers come as more working-age adults pick up low-wage jobs in the slowly improving economy but still struggle to pay living expenses. Adults ages 18 to 64 saw an increase in poverty from 13.7 percent, based on the official calculation, to 15.5 percent, due mostly to commuting and child care costs.

Americans 65 and older had the largest increases in poverty under the revised formula, from 9.1 percent to 14.8 percent, because of medical expenses.

There also were increases for Hispanics and Asian-Americans, partly due to lower participation among immigrants and non-English speakers in government aid programs. African-Americans and children, helped by government benefits, had declines in poverty compared with the official rate. Under both measures, 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."

Last week, more than 47 million Americans who receive food stamps saw their benefits go down, while Congress began negotiations on further cuts of up to $4 billion annually to the program. Food stamps helped lift about 5 million people above the poverty line. Without such aid, the overall poverty rate would increase from 16 percent to 17.6 percent.

Among states, California had the highest share of poor people, hurt in part by high housing costs and large numbers of immigrants, followed by Washington, D.C., Nevada and Florida.

The Associated Press

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