Poverty in the United States in 2023
Poverty in the United States in 2023
November 19, 2024
Congressional Research Service
https://crsreports.congress.gov
R48279
Poverty in the United States in 2023
Congressional Research Service
Poverty in the United States in 2023
The federal government publishes poverty statistics using two measures: the official poverty measure and the Supplemental Poverty Measure (SPM). These two measures tell different stories about who is poor in the United States because they measure different things. Both measures compare the income of a family or unrelated individual against a measure of need for that same family or individual. If the income (measured in dollars) is less than the measure of need (also measured in dollars), the family or unrelated individual is considered to be in poverty; if the income is greater than or equal to the measure of need, the family or individual is classified as not being in poverty. The measures differ as to what is counted as income or included in the measure of need; the SPM generally incorporates a broader conception of family unit, need, and income.
For the official measure in 2023, the poverty rate—the percentage of people in poverty—fell to 11.1%, representing 36.8 million people in the United States who lived in poverty. Under the SPM, the overall poverty rate and number below poverty rose from 12.4% (40.9 million) in 2022 to 12.9% (42.8 million) in 2023. The SPM principally differs from the official poverty measure in that the SPM takes account of taxes, work expenses, and noncash resources in ways the official measure does not. The SPM poverty rate increase reflects increases in the cost of housing (which is included in the SPM’s computation of basic needs), reductions in the amounts received among certain noncash benefits and refundable tax credits, and a rise in work-related expenses that partially offset the incomes gained as more persons worked.
R48279
November 19, 2024
Joseph Dalaker Analyst in Social Policy
Poverty in the United States in 2023
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Contents
Introduction ..................................................................................................................................... 1 Poverty Data As Estimates: Survey Data Collection and Poverty Measure Definitions ................. 2
How the Official Poverty Measure is Computed ....................................................................... 3 The Supplemental Poverty Measure: Its Relevance in Relation to the Official
Measure .................................................................................................................................. 4
Historical Perspective Under the Official Poverty Measure ............................................................ 4
Official Poverty by Demographic Group ........................................................................................ 6
Family Structure ........................................................................................................................ 6
Age ............................................................................................................................................ 7 Race and Hispanic Origin ......................................................................................................... 8 Work Status ............................................................................................................................... 9
Poverty Rates by State ................................................................................................................... 12
Supplemental Poverty Measure ..................................................................................................... 13
How the Official Poverty Measure Was Developed ................................................................ 13
Motivation for a Supplemental Poverty Measure.................................................................... 14 Official and Supplemental Poverty Findings for 2023 ............................................................ 16
SPM and Official Poverty Rates for 2023 ........................................................................ 18 SPM Resource Components in 2023: Their Effect on SPM Estimates ............................. 19
Figures
Figure 1. Official Poverty Rate and Number of Persons in Poverty: 1959 to 2023 ........................ 5 Figure 2. Official Poverty Rates of Families by Family Structure: 2023 ........................................ 6 Figure 3. Official Poverty Rates by Age: 1959 to 2023 .................................................................. 8 Figure 4. Official Poverty Rates by Race and Hispanic Origin: 2023 ............................................. 9
Figure 5. State Poverty Rates: 2023 .............................................................................................. 13 Figure 6. Poverty Rates Under Official Measure and Supplemental Poverty Measure for
the United States, by Age and by Region: 2023 ......................................................................... 19
Figure 7. The Effects of Each Transfer, Tax, or Expense on the Number of People
Identified as Below Poverty Using the SPM: 2022 and 2023 .................................................... 21
Tables
Table 1. Persons by Number and Type of Workers in Family and Poverty Status ......................... 11
Table 2. Differences Between the Official and Supplemental Poverty Measures ......................... 15
Contacts
Author Information ........................................................................................................................ 22
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Introduction
The federal government publishes poverty statistics using two measures: the official poverty measure and the Supplemental Poverty Measure (SPM). These two measures tell different stories about who is poor in the United States because they measure different things. Both measures compare the resources of a family or unrelated individual against a measure of need for that same family or individual. If the resources (using some definition of income, measured in dollars) are less than the measure of need (a poverty threshold, also measured in dollars), the family or unrelated individual is considered to be in poverty; if resources are greater than or equal to the measure of need, the family or individual is classified as not being in poverty. The measures differ as to what is counted as resources or included in the measure of need.
• Under the official poverty measure, the measure of need was originally computed using family expenditure data from 1955 and food costs in 1962. Using the cost of a tightly constrained food budget, and the average share of family income that was spent on food, dollar amounts were computed to represent the overall income levels (the poverty thresholds) at which a family whose basic needs overall might have been similarly constrained. These official poverty thresholds have been updated annually for inflation. For the resources necessary to meet that level of need, the official poverty measure counts income in the form of cash only, before taxes—meaning that tax credits and the monetary value of noncash benefits are not counted.
• Under the SPM, the measure of need is based on recent spending data from the Consumer Expenditure Survey; namely, 83% of median family spending on food, clothing, shelter, utilities, internet, and telephone service (plus an extra 20% for miscellaneous expenses such as personal care products), as opposed to being computed once and indexed forward for inflation (as is done for the official measure). For the resources necessary to meet that level of need, the SPM uses after-tax income (which includes tax credits), estimates the value of certain noncash benefits (such as food assistance), and subtracts some expenditures (such as work-related expenses, child care expenses, and medical expenses paid out-of-pocket) that families cannot use toward the categories of basic needs that are used to define the SPM poverty level. This approach was intended to better reflect the economic choices families currently face, and to better reflect the effects of government programs on the low-income population, than does the official measure.
For the official measure in 2023, the poverty rate—the percentage of people in poverty—fell to 11.1%, representing 36.8 million people who lived in poverty. Under the SPM, the overall poverty rate and number below poverty rose from 12.4% (40.9 million) in 2022 to 12.9% (42.8 million) in 2023. The SPM differs from the official poverty measure in that the SPM takes account of taxes, work expenses, and noncash resources in ways the official measure does not. The SPM poverty rate increase reflects increases in the cost of housing (which is included in the SPM’s computation of basic needs), reductions in the amounts received among certain noncash benefits and refundable tax credits, and a rise in work-related expenses that partially offset the incomes gained as more persons worked.
This report presents a general overview of poverty in the United States. It introduces the concepts and data sources used in defining and measuring poverty. It then offers a historical perspective on poverty at the national level by presenting trend data on the official poverty measure. Next, the
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report focuses on poverty by demographic group, mainly by comparing 2022 estimates with 2023, along four characteristics:
• family structure, because poverty is defined according to the composition, needs, and income of families, and because antipoverty interventions have often been targeted to families;
• age, because age groups vary in the types and sources of income available to them, and because congressional policymaking has often focused on children and the aged population;
• race and Hispanic origin, because poverty rates among these demographic groups historically have had wide differences; and
• work status, because economic well-being is typically tied to the current or past work of oneself or one’s family members.
State poverty rates are then presented to provide a geographical perspective on poverty throughout the United States. Lastly, the report describes the SPM, a newer measure that is designed to improve upon some of the official poverty measure’s limitations, and illustrates how the SPM offers a different view of poverty than the official measure. This different view is particularly relevant for examining the impact on poverty of the refundable tax credits and other measures Congress uses to provide assistance to persons with low income.
Poverty Data As Estimates: Survey Data Collection and Poverty Measure Definitions
The numbers and percentages of those in poverty presented in this report are based on the Census Bureau’s estimates.1 While the official measure has been regarded as a historically consistent benchmark rather than a complete description of what people and families need to live,2 it offers a measure of economic hardship faced by the low-income population. The poverty measure compares family income against a dollar amount called a poverty threshold, a level below which the family is considered to be poor. The Census Bureau releases these poverty estimates every September for the prior calendar year. Most of the comparisons discussed in this report are year- to-year. The report only considers a number or percentage to have changed from the previous year, or to be different from another number or percentage, if the difference has been tested to be statistically significant at the 90% confidence level.3
1 The national-level data in this report were obtained from the report by Emily A. Shrider, Poverty in the United States: 2023, U.S. Census Bureau, Current Population Reports number P60-283, September 10, 2024, at https://www.census.gov/library/publications/2024/demo/p60-283.html (hereinafter, “Shrider, 2024”), and the detailed tabulations and the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) public use file that accompanied the release of that report.
2 “While the thresholds, in some sense, represent the needs of families, they should be interpreted as a statistical yardstick rather than as a complete description of what people and families need to live”; Shrider, 2024, Appendix A, p. 17. The characterization of the poverty measure as a statistical yardstick goes back decades. See, for example, “U.S. Changes Yardstick on Who Is Poor,” Chicago Tribune, May 3, 1965, Section 1B, p. 4.
3 Not every apparent difference in point estimates is a real difference. The official poverty measure uses information from the CPS ASEC, which surveys about 95,000 addresses nationwide. All poverty data discussed here are therefore estimates, which have margins of error. Error in this case refers to a difference from the true data that is caused by using a sample instead of the entire population, not mistakes in computation or biases from imperfect data collection or processing. Even if a survey were implemented perfectly and had collected complete and accurate information from all (continued...)
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How the Official Poverty Measure is Computed
The Census Bureau determines a person’s poverty status by comparing his or her resources against a measure of need. For the official measure, the term resources is defined as total family income before taxes, and the measure of need is a dollar amount called a poverty threshold. There are 48 poverty thresholds that vary by family size and composition. If a person lives with other people to whom he or she is related by birth, marriage, or adoption, the money income from all family members is used to determine his or her poverty status. If a person does not live with any family members, his or her own income is used. Only money income before taxes is used in calculating the official poverty measure, meaning this measure does not treat in-kind benefits such as the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), housing subsidies, or employer-provided benefits as income. Because the official measure uses income before taxes, it also excludes refundable tax credits such as the Earned Income Tax Credit and the Child Tax Credit, as well as stimulus payments that were made as refundable tax credits.
The poverty threshold dollar amounts vary by the size of the family (from one person not living in a family, to nine or more family members living together) and the ages of the family members (how many of the members are children under 18 and whether or not the family head is 65 or older). Collectively, these poverty thresholds are often referred to as the poverty line. As a rough guide, the poverty line in 2023 can be thought of as $31,200 for a family of four; $24,230 for a family of three; $19,680 for a family of two; or $15,480 for an individual not living in a family; though the official measure is actually much more detailed.4
The threshold dollar amounts are updated annually for inflation using the Consumer Price Index for All Urban Consumers (CPI-U). The same thresholds are applied throughout the country: no adjustment is made for geographic variations in living expenses.5
The official poverty measure used in this report is the federal government’s definition of poverty for statistical purposes, such as comparing the number or percentage in poverty over time. A related definition of poverty, the poverty guidelines published by the Department of Health and Human Services (HHS), is used for administrative purposes such as eligibility criteria for assistance programs and will not be discussed in this report.6
respondents in the sample, surveying a different sample would likely yield slightly different estimates of the poverty population or the poverty rate. Thus, even if the true poverty rate were exactly the same in two different years, it is possible to get survey estimates that appear different. To report that a change has occurred in the poverty rate—that is, that the difference between the estimates is likely not caused by sampling variability—the difference has to be large enough that fewer than 10% of all possible survey samples would produce a difference that large (and, conversely, 90% of the samples would not). Such a difference is said to be statistically significant at the 90% confidence level. Point estimates whose differences are not statistically significant are described as such in this report.
4 To provide a general sense of the poverty line, the Census Bureau computes weighted averages of the thresholds within each family size. For example, a family of three may consist of any of the following combinations: three adults, two adults and one child, or one adult and two children. Each combination has its own distinct threshold. The $24,230 figure cited represents an average of those family combinations, adjusted to reflect that some types of three-person families are more common than others. The averages are a convenience for the reader, but are not actually used to compute poverty status for statistical reports. In actual computations, 48 thresholds are used in the official measure.
5 Unlike the poverty thresholds that are used to compute official poverty statistics, the Health and Human Services (HHS) poverty guidelines used for administrative purposes include separate amounts for Alaska and Hawaii.
6 The official poverty measure described in this report was established in the Office of Management and Budget’s Statistical Policy Directive 14, May 1978, reproduced on the Census Bureau’s website at https://www.census.gov/ topics/income-poverty/poverty/about/history-of-the-poverty-measure/omb-stat-policy-14.html. It states that the official measure is to be used for statistical purposes, but should not be construed as required for administrative purposes.
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The Supplemental Poverty Measure: Its Relevance in Relation to the Official Measure
Over the past several decades, criticisms of the official poverty measure have led to the development of an alternative research measure called the SPM, which the Census Bureau also computes and releases. Statistics comparing the official measure with the SPM are provided at the conclusion of this report. The SPM includes adjustments to reflect geographic variations in housing costs, and the estimated effects of taxes and in-kind benefits (such as housing, energy, and food assistance) on poverty, while the official measure does not. The SPM also takes a more expansive approach than the official measure in recognizing relationships among household members for the purpose of identifying how those members share costs and pool resources. Furthermore, while one-time payments such as economic stimuli are not considered as part of the official definition of income, these payments are considered as resources in the SPM. Because some types of tax credits and noncash benefits provide financial help to families and individuals with low incomes, the SPM may be of interest to policymakers.
The official measure provides a comparison of the population below poverty over a longer period than does the SPM, including some years before many current antipoverty assistance programs had been developed.7
Historical Perspective Under the Official Poverty Measure
Figure 1 shows a historical perspective of the number and percentage of the population below the official poverty line. The number in poverty and the poverty rates are shown from the earliest year available (1959) through the most recent year available (2023). Because the total U.S. population has grown over time, poverty rates are useful for historical comparisons because they control for population growth.
Poverty rates fell through the 1960s. Since then, they have generally risen and fallen according to the economic cycle, though during the two expansions prior to the pandemic, official poverty rates did not fall measurably until four to six years into the expansion. The current economic expansion broke that pattern by registering a year-to-year decrease three years after the end of the latest recession: the most recent recession occurred from February to April 2020, and the current expansion began in May 2020. During the first two years since then, the official poverty rate did not register a year-to-year decline.8 In addition to the 11.1% in 2023, historically notable lows in
7 While their methodology is not discussed in this report, researchers at Columbia University have developed a historical SPM, which estimates what the SPM would have been in previous years before the data necessary for computing the SPM according to current methods were available. See https://www.povertycenter.columbia.edu/ historical-spm-data.
8 As noted earlier, the SPM illustrates a different picture—one in which poverty rates fell in 2021 and rose in 2022 and 2023—because it measures the effects of taxes, tax credits (which include stimulus payments during the pandemic and expansions to the child tax credit), and noncash benefits (including expansions to food assistance programs), while the official measure does not. This will be discussed further in the “Supplemental Poverty Measure” section.
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the official poverty rate occurred in 1973 (11.1%), 2000 (11.3%), and 2019 (10.5%).9 Peaks occurred in 1983 (15.2%), 1993 (15.1%), and 2010 (15.1%).10
Poverty rates tend to rise during and after recessions, as opposed to leading economic indicators such as new housing construction, whose changes often precede changes in the performance of the overall economy. The poverty rate’s lag is explainable in part by the way it is measured: it uses income from the entire calendar year.11
Figure 1. Official Poverty Rate and Number of Persons in Poverty: 1959 to 2023
(poverty rates in percentages, number of persons in millions; shaded bars indicate recessions)
Source: Congressional Research Service (CRS), based on data from Table A-3 of Emily A. Shrider, Poverty in the United States: 2023, U.S. Census Bureau, Current Population Reports number P60-283, September 10, 2024, at https://www.census.gov/library/publications/2024/demo/p60-283.html. Recession dates were obtained from the National Bureau of Economic Research at https://www.nber.org/research/data/us-business-cycle-expansions-and- contractions. Notes: The 2019 and 2020 estimates were biased downward because of increased nonresponse associated with telephone-only interviewing during the pandemic; response rates since the pandemic did not return to their pre- pandemic levels (for details, see Adam Bee and Jonathan Rothbaum, “Using Administrative Data to Evaluate Nonresponse Bias in the 2024 Current Population Survey Annual Social and Economic Supplement,” U.S. Census Bureau Research Matters blog, September 10, 2024, at https://www.census.gov/newsroom/blogs/research-matters/ 2024/09/administrative-data-nonresponse-bias-cps-asec.html). A summary of methodological changes to the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) and the poverty measure in other years, with references to technical descriptions of the changes, is available in the Annual Statistical Supplement to the Social Security Bulletin, Appendix C, at https://www.ssa.gov/policy/docs/statcomps/supplement/ 2022/apnc.pdf.
9 The rate in 2019 is the lowest numerically, but suffered from nonresponse bias that resulted from the stoppage of in- person interviews in 2020 as a safety precaution during the COVID-19 pandemic. Before 2019, the poverty rates in 1973 and 2000 had been considered to be tied for the lowest measured poverty rate because they are not statistically different from each other.
10 These poverty rates may not necessarily be distinguishable from the poverty rates in their adjacent years. See footnote 3 for an explanation of statistical significance.
11 For further historical information about poverty and recessions, see CRS Report R45854, Trends in the U.S. Poverty Rate after Recessions, by Joseph Dalaker; and CRS Report R46939, Underemployment, Recessions, and Poverty, by Joseph Dalaker.
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Official Poverty by Demographic Group
The decline in the official poverty rate in 2023 was not universal, but focused among a few demographic groups. Discussed below are the declines among married-couple families and women not in families, working-age adults, non-Hispanic Whites, and persons who worked part- time or part-year (i.e., less than full-time year-round), in the context of broader demographic trends.
Family Structure
Because poverty status is determined at the family level by comparing resources against a measure of need, vulnerability to poverty may differ among families of different compositions. In this section, poverty data by family structure are presented using the official poverty measure, with families defined as persons related by birth, marriage, or adoption to the householder (the person in whose name the home is owned or rented). In the “Supplemental Poverty Measure” section of this report, a different definition will be used.
In general, women have higher poverty rates than men: 11.9% compared with 10.2% in 2023. Historically, families with a female householder and no spouse present (female-householder families) have had higher poverty rates than both married-couple families and families with a male householder and no spouse present (male-householder families). This remained true in 2023: the poverty rate among female-householder families was 21.8%, compared with 11.4% for male-householder families and 4.6% for married-couple families (Figure 2). The 2023 female- householder poverty rate is the latest in a series of lower poverty rates for this group compared with previous decades.12 Year-to-year decreases were detected in the poverty rates for married- couple families (4.6% in 2023, down from 5.0% in 2022), and women living alone or with non- relatives only (20.5% in 2023, down from 22.0% in 2022).
Figure 2. Official Poverty Rates of Families by Family Structure: 2023
(poverty rates in percentages)
Source: CRS, based on poverty data from Table A-2 in Emily A. Shrider, Poverty in the United States: 2023, U.S. Census Bureau, Current Population Reports number P60-283, September 10, 2024, at https://www.census.gov/ library/publications/2024/demo/p60-283.html.
12 Poverty rates for female-householder families are available from 1959 onward. Until 1964, the rates for this group were estimated to be above 40%. From 1964 through 1997, poverty rates for female-householder families were between 30% and 40%, and from 1998 to 2014, they hovered close to or below 30% except during the years following the Great Recession, when they peaked above 30%. From 2015 to 2023, the poverty rates for this group remained below 30%. For historical data, see U.S. Census Bureau, Historical Poverty Tables: People and Families – 1959 to 2023, “Table 4: Poverty Status of Families by Type of Family, Presence of Related Children, Race, and Hispanic Origin,” https://www2.census.gov/programs-surveys/cps/tables/time-series/historical-poverty-people/hstpov4.xlsx.
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Notes: The poverty rates above include only families with a householder (the survey’s reference person for the household, typically the person in whose name the home is owned or rented). The Census Bureau defines a family as those living together related by birth, marriage, or adoption.
Age
When examining poverty by age, the three main groups (under 18, 18 to 64, and 65 and older) are noteworthy for distinct reasons. People under age 18 are typically dependent on other family members for income, particularly young children below their state’s legal working age. People aged 18 to 64 are generally thought of as the working-age population and typically have wages and salaries as their greatest source of income. People aged 65 and older, referred to as the aged population, are often eligible for retirement benefits, and those who do retire typically experience a change in their primary source of income, such as from earnings to Social Security.
Figure 3 illustrates poverty rates historically by age because the overall poverty rate (seen in Figure 1) masks the historical decline in poverty among the aged population. Before 1974, the poverty rate for those aged 65 and over was the highest of the three age groups. In 1966, people aged 65 and over had a poverty rate of 28.5%, compared with 17.6% for those under 18 and 10.5% for working-age adults. By 1974, the poverty rate for people aged 65 and over had fallen to 14.6%, compared with 15.4% for people under 18 and 8.3% for working-age adults. Since then, people under 18 have had the highest poverty rate of the three groups.13 The poverty rate among the 65-and-older population eventually fell below the poverty rate of the working-age population, and except for an uptick in 2021 had trended below that group since the early 2000s.
Official poverty rates for children and the aged exhibited no significant changes from 2022 to 2023, while the working-age adult group experienced a poverty rate decline. Official poverty rates in 2023 were 15.3% for children, 10.0% for the working-age population (down from 10.6% in 2022), and 9.7% for the aged population.
Using the SPM, however, the picture changes markedly. The official poverty measure uses family income before taxes and thus does not count refundable tax credits or noncash benefits, nor does it subtract medical or work-related expenses, all of which affect age groups in different ways. These differences are discussed in the “Official and Supplemental Poverty Findings for 2023” section.
13 Historically, children under 6 have been more vulnerable to poverty than children as a whole. For instance, in the aftermath of the Great Recession in 2010, children under 6 related to their householder registered a poverty rate of 25.3%, or 3.3 percentage points greater than the 22.0% for all persons under age 18 that year. In 2023, the difference was narrower—1.5 percentage points (16.8% for related children under 6, versus 15.3% for all persons under 18)—but still statistically significant.
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Figure 3. Official Poverty Rates by Age: 1959 to 2023
(poverty rates in percentages; shaded bars indicate recessions)
Source: CRS, based on data from Table A-3 of Emily A. Shrider, Poverty in the United States: 2023, U.S. Census Bureau, Current Population Reports number P60-283, September 10, 2024, at https://www.census.gov/library/ publications/2024/demo/p60-283.html. Recession dates were obtained from the National Bureau of Economic Research at https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions. Notes: The 2019 and 2020 estimates were biased downward because of increased nonresponse associated with telephone-only interviewing during the pandemic; response rates since the pandemic did not return to their pre- pandemic levels (for details, see Adam Bee and Jonathan Rothbaum, “Using Administrative Data to Evaluate Nonresponse Bias in the 2024 Current Population Survey Annual Social and Economic Supplement,” U.S. Census Bureau Research Matters blog, September 10, 2024, at https://www.census.gov/newsroom/blogs/research-matters/ 2024/09/administrative-data-nonresponse-bias-cps-asec.html). A summary of methodological changes to the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) and the poverty measure in other years, with references to technical descriptions of the changes, is available in the Annual Statistical Supplement to the Social Security Bulletin, Appendix C, at https://www.ssa.gov/policy/docs/statcomps/supplement/ 2022/apnc.pdf.
Race and Hispanic Origin14
Poverty rates vary by race and Hispanic origin, as shown in Figure 4.15 In surveys, Hispanic origin is asked separately from race; accordingly, people identifying as Hispanic or Latino may be of any race.16 The official poverty rate fell among non-Hispanic Whites from 8.6% (16.7 million people) in 2022 to 7.7% (14.9 million people) in 2023. Over the same period, the poverty rate for the population identifying with Two or More Races rose from 12.2% (1.2 million) to 14.4% (1.5
14 Since 2002, federal surveys have asked respondents to identify with one or more races; previously, they could choose only one. The groups in this section represent those who identified with one race alone. Another approach is to include those who selected each race group either alone or in combination with one or more other races. Those data are also available on the Census Bureau’s website at https://www.census.gov/library/publications/2024/demo/p60-283.html, where they are published in Shrider, 2024; and in accompanying historical data tables.
15 Except for the two or more races population and the Hispanic population, the racial categories listed in this section include those identifying with one race only.
16 Hispanic origin is classified separately from race. The Asian, Black, American Indian and Alaska Native, Native Hawaiian and Other Pacific Islander, and Two or More Races populations shown in this report all include Hispanics.
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million). None of the other race or origin groups registered a statistically significant change in their official poverty rates.17
Figure 4. Official Poverty Rates by Race and Hispanic Origin: 2023
(poverty rates in percentages)
Source: CRS, based on data from Table A-1 of Emily A. Shrider, Poverty in the United States: 2023, U.S. Census Bureau, Current Population Reports number P60-283, September 10, 2024, at https://www.census.gov/library/ publications/2024/demo/p60-283.html. Notes: People of Hispanic origin may be of any race. Additionally, respondents may identify with one or more racial groups. Except for “All persons,” “Two or more races,” and “Hispanic,” the remaining groups shown include those who identified with one race only. The “non-Hispanic White alone” group includes only the White non-Hispanic population, while the “Black alone,” “Asian alone,” and “American Indian and Alaska Native alone” groups include persons who identify as Hispanic. Data for Native Hawaiians and Other Pacific Islanders are not shown separately.
Work Status
Earnings from work are an important source of income for many individuals and families. The poverty rates among workers historically have been and continue to be lower than among nonworkers. Looking at the population aged 18-64 (referred to hereinafter as the “working-age population”) in 2023, 4.5% of workers were in poverty, compared with 29.7% of nonworkers.
Workers may be broken out further into those who worked full-time year-round, meaning they worked at least 50 weeks in the year (including paid vacations and sick leave) for at least 35 hours per week, and those who worked less than full-time year-round. To have worked less than full-time year-round, the person must have worked at least one week but for fewer than 50 weeks, or fewer than 35 hours per week, or both: these are part-time or part-year workers. Among the working-age population, full-time year-round workers experienced a poverty rate of 1.8% in 2023, while for part-time or part-year workers the poverty rate was 11.7% (down from 12.8% in 2022). Thus, having a job reduces the likelihood of being in poverty but does not guarantee that a person would avoid poverty.
17 The Asian, Native Hawaiian and Other Pacific Islander, American Indian and Alaska Native, and Two or More Races populations are smaller than the other groups shown, and as a result their margins of error are greater than for the other groups, meaning that larger differences are required to register as statistically significant than for White, Black, or Hispanic populations. The 2023 populations below poverty, poverty rates, and margins of error around the poverty rates for the groups with no statistically significant change are as follows: 2.0 million and 9.1% (± 0.9) for Asians; 0.9 million and 21.2% (± 3.3) for American Indians and Alaska Natives; and 0.2 million and 12.9% (± 6.4) for Native Hawaiians and Other Pacific Islanders. Among the Hispanic or Latino population, 10.9 million or 16.6% (± 0.7) lived in poverty.
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While those data focused on the poverty status of working-age individuals and whether or not they had jobs, poverty is not limited to the working-age population. Most children (defined for this report as all persons under age 18) cannot earn a living and are dependent on older family members’ income. Most persons age 65 and older are considered to be retirement age. While many in the aged population can and do work, programs such as Social Security were put in place to ensure that a basic level of income could be provided for the aged who no longer want to or are able to work. Further, persons in the working-age population may not be able to work because they are caring for other family members, need care themselves, or cannot find jobs. These populations are not insulated from the effects of poverty—their family income, and in turn their poverty status, is affected by the earnings of other family members. For that reason, Table 1 examines the entire population by the number of working family members, and whether those family members were full-time year-round or part-time or part-year. Table 1 is intended to illustrate the effects of work on poverty throughout the entire population, not just those who are able to work.18
18 Individuals 15 and older who do not live in families are included in Table 1. They are treated as being in one-person families. They may appear in one of the first three rows of the table because they themselves may be a nonworker (0 workers in family), a part-time or part-year worker (zero full-time year-round, one part-time or part-year), or a full-time year-round worker (one full-time year-round, zero part-time or part-year). Individuals under 15 who do not live in families (such as foster children or children living in institutions) do not have a measured poverty status and are thus excluded from the table.
CRS-11
Table 1. Persons by Number and T ype of Workers in Family and Poverty Status
(Numbers of persons in thousands. Percentages sum to 100.0% horizontally within each year [below poverty plus not in poverty])
2022 2023
Below Poverty Not in Poverty Total Below Poverty Not in Poverty Total
Net Difference,
2023 Minus 2022
Number and Type
of Workers in
Family Number
Poverty
Rate
(percent) Number Percent Number Number
Poverty
Rate
(percent) Number Percent Number
Below
Poverty, Number
Not in
Poverty, Number Total
0 workers 20,299 35.1 37,476 64.9 57,776 19,328 33.8 37,847 66.2 57,175 -971 371 -601
0 full-time year-round, 1 or more part-time or part-year
10,448 24.4 32,428 75.6 42,876 10,490 23.8 33,590 76.2 44,080 42 1,162 1,204
1 full-time year-round, 0 part-time or part- year
5,510 6.4 81,025 93.6 86,535 5,450 6.3 80,747 93.7 86,198 -60 -278 -338
1 full-time year-round, 1 or more part-time or part-year
1,202 2.5 47,245 97.5 48,447 1,202 2.3 50,363 97.7 51,564 3,117 3,118
2 or more full-time year-round
464 0.5 93,980 99.5 94,444 321 0.3 92,495 99.7 92,816 -144 -1,484 -1,628
All persons 37,923 11.5 292,154 88.5 330,077 36,790 11.1 295,042 88.9 331,832 -1,132 2,887 1,755
Source: CRS, author’s computations using data from the U.S. Census Bureau, Current Population Survey, 2023 and 2024 Annual Social and Economic Supplements, Public Use Data Files. Notes: “A” indicates the cell rounds to 0 (fewer than 500 persons). Details may not sum to totals because of rounding. Full-time year-round: someone who has worked at least 50 weeks (including sick leave and paid vacations) for at least 35 hours per week in the calendar year. Part-time or part-year: someone who has worked at least 1 week but fewer than 50 weeks, or fewer than 35 hours per week, or both.
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As can be seen in Table 1, poverty rates decrease as the number of workers in the family increases (from 33.8% for those who did not live with any workers in 2023 and were not workers themselves, to 0.3% for those in families with two or more full-time year-round workers). Of the 36.8 million persons living in poverty in 2023, a little more than 0.3 million lived with two or more full-time year-round workers. Nearly all of those living in poverty lived with fewer than two full-time year-round workers.
Interpreting the year-to-year differences (the rightmost three columns of the table) to discern the impact of job gains and losses on poverty is not straightforward. If a person above poverty loses a job, they and their family might fall below poverty, and if a person below poverty gains a job, they and their family might escape poverty—but those are not the only possibilities. A family in poverty might gain a worker but not gain enough income to avoid poverty, a family might gain a worker but lose a different source of income and thereby remain below poverty, a nonpoor family might lose a worker but still be above poverty, and so on. Thus, the rightmost three columns of Table 1 are net changes in the number of persons in poverty, not in poverty, and overall, by the number and type of workers present.
With those caveats in mind, the data in Table 1 indicate most of the net decline in the poverty population is generated by a decline in the number of persons living with no workers (nearly 1 million—top row, third column from right). The other categories—persons living with one or more types of workers—do not show nearly as large net changes among the poor.
Poverty Rates by State19
Poverty is not equally prevalent in all parts of the country. Figure 5 shows states with relatively high poverty rates across parts of the Appalachians, the Southwest, the Mississippi Delta and the Southeast, as well as in New York, Michigan, and Ohio. The poverty rate in Louisiana (18.9% ± 0.6), seemingly the highest, was not statistically distinguishable from the rate in Mississippi. The poverty rate in New Hampshire (7.2% ± 0.6) was the lowest. When comparing poverty rates geographically, the official poverty thresholds are not adjusted for geographic variations in the cost of living—the same thresholds are used nationwide. As such, an area with a lower cost of living accompanied by lower wages will appear to have a higher poverty rate than an area with a higher cost of living and higher wages, even if individuals’ purchasing power were exactly the same in both areas.
19 These state estimates are based on the American Community Survey (ACS) 2023 One-Year Estimates, Table S1701. The ACS is typically recommended by the Census Bureau for estimates at the state level and smaller areas because it has the largest sample size of any U.S. household survey. The greater the sample size is, the lower the sampling error is (sampling error refers to an estimate from a sample being different from one based on responses from the entire population). In order to obtain its larger sample size, the ACS questionnaires are designed to be filled out by the respondents on their own, without requiring a trained field representative to collect the information—which means the questionnaire is different from the more complex one used in the CPS ASEC. For example, the CPS ASEC asks more detailed income questions, and its computerized questionnaire includes built-in checks. These checks in the questionnaire program prompt the field representative to ask the respondent to verify a reported income amount, if the amount appears larger or smaller than expected based on other reported information. The CPS ASEC’s survey methods require more attention and resources per respondent than do the ACS’s. As a result of their different collection methods and sample sizes, ACS poverty estimates are different from the CPS ASEC poverty estimates presented elsewhere in this report. For example, the ACS estimated the U.S. poverty rate to be 12.5% in 2023, compared with the 11.1% reported using the CPS ASEC.
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Figure 5. State Poverty Rates: 2023
(poverty rates in percentages)
Source: CRS, using data from the U.S. Census Bureau, American Community Survey, 2023 One-Year Estimates, Table S1701. Note: Data for the District of Columbia and Puerto Rico are treated as state-equivalents in the Census Bureau’s Table S1701.
Supplemental Poverty Measure
Criticisms of the official poverty measure led to the development of the SPM. Described below are the development of the official measure, its limitations, attempts to remedy those limitations, the research efforts that eventually led to the SPM’s first release in November 2011, and a comparison of poverty rates in 2023 based on the SPM and the official measure.20
How the Official Poverty Measure Was Developed
The poverty thresholds were originally developed in the early 1960s by Mollie Orshansky of the Social Security Administration. Rather than attempt to compute a family budget by using prices for all essential items that low-income families need to live, Orshansky focused on food costs.21
20 For a more thorough discussion of the SPM’s development and methodology, see CRS Report R45031, The Supplemental Poverty Measure: Its Core Concepts, Development, and Use, by Joseph Dalaker.
21 While Orshansky did not attempt to compute a complete basket of goods and services, her focus on food costs was already a more detailed empirical approach to poverty measurement than were the dollar amounts used in the 1964 Economic Report of the President, issued by the Council of Economic Advisers (chapter 2, “The Problem of Poverty in America”). In that report, a flat figure of $3,000 was used for all families and $1,500 for unrelated individuals. See also (continued...)
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Unlike other goods and services such as housing or transportation, which did not have a generally agreed-upon level of adequacy, minimum standards for nutrition were known and widely accepted. According to a 1955 U.S. Department of Agriculture (USDA) food consumption survey, the average amount of their income that families spent on food was roughly one-third. Therefore, using the cost of a minimum food budget22 and multiplying that figure by three yielded a figure for total family income. That computation was possible because USDA had already published recommended food budgets as a way to address the nutritional needs of families experiencing economic stress. Some additional adjustments were made to derive poverty thresholds for two- person families and individuals not living in families to reflect the relatively higher fixed costs of smaller households.
Motivation for a Supplemental Poverty Measure
While the official poverty measure has been used for 60 years as the source of official statistics on poverty in the United States, it has received criticism over the years for several reasons. First, it does not take into account benefits from most of the largest programs that aid the low-income population. For instance, it uses money income before taxes—meaning that it does not necessarily measure the income available for individuals to spend, which for most people is after- tax income. Therefore, any effects of tax credits designed to assist persons with low income are not captured by the official measure. The focus on money income also does not account for in- kind benefit programs designed to help the poor, such as SNAP or housing assistance. The official measure has also been criticized for the way it characterizes families’ and individuals’ needs in the poverty thresholds. That is, the method used to compute the dollar amounts used in the thresholds, which were originally based on food expenditures in the 1950s and food costs in the 1960s, does not accurately reflect current needs and available goods and services.23 The official measure also does not take account of the sharing of expenses and income among household members not related by birth, marriage, or adoption. And, as mentioned earlier, the official thresholds do not take account of geographic variations in the cost of living.
In 1995, a panel from the National Academy of Sciences issued a report, Measuring Poverty: A New Approach, which recommended improvements to the poverty measure.24 Among the
Economic Report of the President (1964), https://fraser.stlouisfed.org/title/45#8135. For a thorough history of the official poverty measure, see Gordon Fisher, The Development of the Orshansky Thresholds and Their Subsequent History as the Official U.S. Poverty Measure, 1992, rev. 1997, reproduced on the Census Bureau’s website at https://www.census.gov/library/working-papers/1997/demo/fisher-02.html.
22 The stringency of this food budget, called the Economy Food Plan, was characterized by Betty Peterkin and Faith Clark, “Money Value and Adequacy of Diets Compared with the USDA Food Plans,” Family Economics Review, September 1969, p. 8: “Diets were considered good if they provided the recommended allowances (1963) for all nutrients, and fair or better if they provided at least two-thirds of the allowances.” They presented results of a 1965 survey of urban families indicating that less than 50% of families on the Economy Food Plan had a fair or better diet (implying at least 50% did not), while less than 10% of the families on the plan had a good diet; see https://archive.org/ details/familyeconomicsr6251inst_48.
23 Criticisms have been discussed in the mainstream press as well as academia. A 1988 article (Spencer Rich, “Drawing the Line Between Rich, Poor,” Washington Post, September 23, 1988, https://www.washingtonpost.com/archive/ politics/1988/09/23/drawing-the-line-between-rich-poor/60f5dbeb-dab3-4a42-819a-2dea34e7854e/) documented dissatisfaction about the official measure. This came from both those claiming it was too high, citing its failure to capture the effects of in-kind benefits for the poor and its overstatement of inflation, and those claiming it was too low, based on the fact that if the thresholds were derived using more recent household consumption data, they would be based on roughly five times the cost of food, not three times as Orshansky had computed in the early 1960s.
24 Constance F. Citro and Robert T. Michael, eds., Measuring Poverty: A New Approach, Panel on Poverty and Family Assistance: Concepts, Information Needs, and Measurement Methods, Committee on National Statistics, National Research Council (Washington, DC: National Academies Press, 1995), available at https://www.nap.edu/read/4759/ chapter/1.
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suggested improvements were to have the poverty thresholds reflect the costs of food, clothing, shelter, utilities (FCSU), and a little bit extra to allow for miscellaneous needs;25 to broaden the definition of family; to include geographic adjustments as part of the measure’s computation; to include the out-of-pocket costs of medical expenses in the measure’s computation; and to subtract work-related expenses from income. An overarching goal of the recommendations was to make the poverty measure more closely aligned with the real-life needs and available resources of the low-income population, as well as the changes that have taken place over time in their circumstances, owing to changes in the nation’s economy, society, and public policies (see Table 2).
After over a decade-and-a-half of research to implement and refine the methodology suggested by the panel, conducted both from within the Census Bureau as well as by other federal agencies and the academic community, the Census Bureau issued the first report using the SPM in November 2011.26
Table 2. Differences Between the Official and Supplemental Poverty Measures
Official Poverty Measure Supplemental Poverty Measure
Resource units (families) People related by birth, marriage, or adoption (official Census Bureau definition of family). People aged 15 and older not related to anyone else in the household are considered as their own economic units.
People related by birth, marriage, adoption, plus unrelated and foster children, and cohabiting partners and their children or other relatives (if any) are considered as “SPM resource units” (sharing resources and expenses together).
25 The portion of the SPM threshold that represents FCSU is set to 83% of the median FCSU expenditures among families with children, according to the Consumer Expenditure Survey, with families in this case defined as the consumer units measured within that survey. That amount is meant to represent a basic, modest level of FCSU. An extra 20% of that amount is then added to represent other basic needs, such as personal care products, cleaning supplies, and non-work-related transportation. Before 2020, telephone and internet were included as utilities in the Consumer Expenditure Survey. After 2020 they have not been, and as a result they have been added to the SPM thresholds as separate components to maintain consistency (hence the reference to “FCSUti” in Table 2).
26 The effort to consolidate the previous research and create the SPM was done under the auspices of an Interagency Technical Working Group (ITWG) led by the Office of Management and Budget (OMB) and received public commentary via a Federal Register notice (Federal Register, vol. 75 no. 101, Wednesday, May 26, 2010, pp. 29513- 29514, https://www.federalregister.gov/documents/2010/05/26/2010-12628/developing-a-supplemental-poverty- measure). The Federal Register notice referenced a report by the ITWG (“Observations from the Interagency Technical Working Group on Developing a Supplemental Poverty Measure”), which has since been moved to a new URL at https://www.census.gov/content/dam/Census/topics/income/supplemental-poverty-measure/spm-twgobservations.pdf. The comments that the Census Bureau received on that report are available on the Census Bureau’s website at https://www.census.gov/content/dam/Census/topics/income/supplemental-poverty-measure/redactedcomments.pdf. These and additional methodological documents on the SPM are available at https://www.census.gov/topics/income- poverty/supplemental-poverty-measure/guidance/methodology.html.
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Official Poverty Measure Supplemental Poverty Measure
Needs (thresholds) • Vary according to family size and ages of family members.
• Dollar amounts based on the cost of a food plan for families in economic stress in the early 1960s, times three (with adjustments for two-person families and individuals).
• Updated for inflation using the Consumer Price Index for All Urban Consumers (CPI- U).
• No geographic cost adjustments.
• Vary according to the size and composition of the resource unit (see above).
• Dollar amounts based on consumer expenditure data for food, clothing, shelter, utilities, telephone, and internet (FCSUti), with adjustments by homeownership and mortgage or rental status.
• Based on five years of consumer expenditure data (not fixed at one point and trended forward), lagged one year from the most recent for consistency with the CPS ASEC data available for computing in-kind benefit amounts for the SPM thresholds.
• Housing costs geographically adjusted for individual metropolitan areas and the entire nonmetropolitan area within states.
Resources (income definition) Money income before taxes (includes 18 private and government sources of income, including Social Security, cash assistance, and other sources of cash income).
Money income (both private and government sources) after taxes
• minus: work expenses, child care expenses, child support paid, out-of-pocket medical expenses.
• plus: tax credits (such as the Child Tax Credit and the Earned Income Tax Credit) and the value of in-kind benefits (such as food and housing subsidies) that can be used to meet FCSUti needs.
Source: CRS, using information from pages 2-3 and 32-33 in Emily A. Shrider, Poverty in the United States: 2023, U.S. Census Bureau, Current Population Reports number P60-283, September 10, 2024, at https://www.census.gov/library/publications/2024/demo/p60-283.html. Notes: For caveats, see the “Supplemental Poverty Measure” section of this report.
Official and Supplemental Poverty Findings for 202327
Compared with the official measure, the SPM takes into account greater detail of individuals’ and families’ living arrangements and provides a more up-to-date accounting of the costs and resources available to them. Because the SPM recognizes greater detail in relationships among household members and geographically adjusts housing costs, it provides an updated rendering,
27 Data in this section are available in Appendices A and B of Shrider, 2024, unless otherwise indicated (such as from computations using the CPS ASEC public use file).
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compared with the official measure, of the circumstances in which the poor live. In that context, some point out that the SPM’s measurement of taxes, transfers, and expenses may offer policymakers a clearer view of how government policies affect the population living in poverty today. However, the SPM was developed as a research measure, and the Office of Management and Budget set the expectation that it would be revised periodically to incorporate improved measurement methods and newer sources of data as they became available; it was not developed for administrative purposes.28 The fact that tax liabilities and credits are modeled, or that in-kind benefits are estimated using limited data, can be useful to bear in mind when comparing SPM estimates with official poverty estimates, or when any changes to the SPM methodology become implemented in the future.29 Conversely, the official measure’s consistency over a longer time span makes it easier for policymakers and researchers to make historical comparisons.
Underreporting and Estimates of Income and Noncash Benefits
The income amounts used to compute poverty status under both the official measure and the SPM were obtained from an annual household survey: the Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS). The ASEC is a series of questions asked once a year at the end of the CPS, which is a monthly survey designed to obtain monthly labor force estimates, such as the unemployment rate; that is, the monthly CPS was not primarily designed for income measurement. Like other household surveys, the CPS ASEC suffers from underreporting of income amounts, and that affects both official and SPM poverty estimates. For example, in 2023 Social Security net benefit payments were approximately $1.23 trillion,30 while the total Social Security amounts received according to the CPS ASEC were approximately $1.14 trillion.31 Both the official measure and the SPM include Social Security as income that families use to meet the level of need represented by their poverty threshold. Unlike the official poverty measure, the SPM also includes the value of noncash benefits, and typically these values are estimated, either because respondents may not be privy to the values (as is the case for energy assistance payments made directly by the government to utility companies) or may not remember or report accurate amounts, or the survey questions may not ask the relevant details to obtain the amounts directly. For example, the monetary value of SNAP benefits received according to the SPM totaled approximately $41.9 billion for calendar year 2023, while SNAP administrative records report approximately $107.1 billion for the same period.32 As a result of this underreporting, SNAP’s effects on the number of persons measured as being in poverty according to the SPM are likely to be understated.33
28 The Health and Human Services Poverty Guidelines were developed for administrative purposes—they are a simplification of the official poverty measure. For details, see CRS Report R44780, An Introduction to Poverty Measurement, by Joseph Dalaker.
29 For instance, work expenses such as commuting costs can be difficult to pin down precisely for every person or family, because they often influence and are influenced by a person’s or family’s decision about where to live. Rather than attempting to estimate the relevant work expenses for every family, in the SPM a flat amount is assigned to workers, multiplied by the number of weeks they worked. Some researchers have also found that the tax model used in the SPM underestimates refundable tax credits, in comparison with administrative data, which particularly affects families with children. Therefore, refinements to the SPM methodology based on the ongoing SPM research may not be trivial. Working papers that present results of research into SPM methodology may be found on the Census Bureau’s website at https://www.census.gov/topics/income-poverty/supplemental-poverty-measure/library/working-papers.html.
30 U.S. Congress, House Committee on Ways and Means, The 2024 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, prepared by the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Trust Funds, 118th Congress, 2nd session, May 7, 2024, House Document 118-137, Table III.A1, p. 31, https://www.ssa.gov/OACT/TR/2024/ tr2024.pdf#page=38.
31 Author’s computations of 2023 calendar year Social Security income using the 2024 CPS ASEC public use file.
32 U.S. Department of Agriculture, Food and Nutrition Service, SNAP Data Tables: National Level Annual Summary: Participation and Costs, at https://www.fns.usda.gov/sites/default/files/resource-files/snap-annualsummary-9.xlsx, and computations using the 2024 CPS ASEC public use file of SNAP amounts used as SPM resources in 2023, summed across the entire population.
33 Census Bureau staff have been researching the effect of SNAP underreporting on SPM poverty rates, and possible (continued...)
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SPM and Official Poverty Rates for 2023
Under the SPM, the profile of the population is different than under the official measure. The SPM poverty rate in 2023 was 1.8 percentage points higher than under the official measure (12.9% compared with 11.1%, see Figure 6), and 0.5 percentage points higher than the corresponding SPM poverty rate in 2022 (12.4%). The year-to-year increase in the SPM poverty rate was largely driven by changes in the poverty thresholds, notably increases in the cost of housing, and by the changes in the effects of noncash benefits, taxes and tax credits, or household expenses shown in Figure 7.34
For the official measure, poverty rates were highest for children and lowest for the aged, with working-age adults registering a decline from 2022 to 2023, but for the SPM both the order and year-to-year changes were different.35 Poverty rates under the SPM were 13.7% for children (up 1.3 percentage points), 12.2% for working-age adults (no significant change), and 14.2% for the aged (no significant change). This different order stemmed from the SPM’s income definition. Out-of-pocket medical expenses, which are subtracted from SPM income (making the poverty rate higher than it would be without the subtraction), are highest for the aged. The refundable portion of the Child Tax Credit (CTC), the Supplemental Nutrition Assistance Program (SNAP), the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and school lunches all target families with children; counting the values of these noncash benefits lowers the poverty rate from what it would have been without them. Work-related expenses, incurred by the working-age population, are subtracted from income, thus elevating the poverty rate relative to what it would have been without the subtraction. Among the 18 to 64 population, work-related expenses rose in 2023. This result is consistent with the decline among the number of nonworkers, indicated earlier in the “Work Status” section, and is discussed further in the “SPM Resource Components in 2023: Their Effect on SPM Estimates” section.
solutions. See Liana E. Fox et al., Precision in Measurement: Using SNAP Administrative Records to Evaluate Poverty Measurement, U.S. Census Bureau, SEHSD Working Paper number 2017-49, October 2017, https://www.census.gov/ library/working-papers/2017/demo/SEHSD-WP2017-49.html; and Kathryn Stevens, Liana E. Fox, and Misty L. Heggeness, Precision in Measurement: Using State-Level SNAP Administrative Records and the Transfer Income Model (TRIM3) to Evaluate Poverty Measurement, U.S. Census Bureau, SEHSD Working Paper number 2018-15, April 2018, https://www.census.gov/library/working-papers/2018/demo/SEHSD-WP2018-15.html. Further research on SPM methodology may be found at https://www.census.gov/topics/income-poverty/supplemental-poverty-measure/ library/working-papers.html.
34 Tax credits in the SPM are typically estimated for the tax year (i.e., the year that taxes are incurred, which is the year before the date tax returns are filed), but most tax credits are actually received as a lump sum the following year, meaning the SPM usually includes the tax credits as income the year before the survey respondents actually receive them. Some state tax credits in 2022 were an exception to this because they were issued early. The Census Bureau’s tax model used in the SPM was updated to include these 2022 state tax credits. For details, see Douglas Conway and Matthew Unrath, “Modeling State Tax Rebate Payments in the 2022 CPS ASEC,” U.S. Census Bureau, SEHSD Working Paper No. 2023-26, September 2023, https://www.census.gov/library/working-papers/2023/demo/SEHSD- WP2023-26.html; and Daniel Lin, “Methods and Assumptions of the CPS ASEC Tax Model,” U.S. Census Bureau, SEHSD Working Paper No. 2022-18, November 30, 2022, https://www.census.gov/library/working-papers/2022/demo/ SEHSD-wp2022-18.html.
35 As stated in the “Age” section, official poverty rates in 2023 were 15.3% for children, 10.0% for the working-age population, and 9.7% for the aged population.
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Figure 6. Poverty Rates Under Official Measure and Supplemental Poverty Measure
for the United States, by Age and by Region: 2023
(poverty rates in percentages)
Source: Congressional Research Service, based on data from Table B-4 in Emily A. Shrider, Poverty in the United States: 2023, U.S. Census Bureau, Current Population Reports number P60-283, September 10, 2024, at https://www.census.gov/library/publications/2024/demo/p60-283.html. Notes: Figures include unrelated individuals under age 15 (such as foster children), who are not usually included in official poverty estimates.
Poverty rates by region also differed under the SPM compared with the official measure because of the geographic adjustment of housing costs in the SPM poverty thresholds. In the Northeast and West, where housing costs are higher on average than the rest of the country,36 the SPM poverty rate was higher than the official poverty rate by 2.1 percentage points and 4.1 percentage points, respectively (Figure 6). In the South and Midwest, where housing costs are lower, the SPM poverty rate was 1.2 percentage points higher than the official rate in the South, and not significantly different from the official rate in the Midwest.
SPM Resource Components in 2023: Their Effect on SPM Estimates
Figure 7 illustrates the impact of various resource components on the number of people identified as poor using the SPM. Bars pointing left (negative) indicate the number of people kept out of the population identified as poor by the SPM’s treatment of that resource component. The bars pointing right (positive) indicate the number of people added to the estimated poor population by the SPM’s treatment of the component.
These data show how the population estimated to be poor would change if the SPM omitted a particular component (either by subtracting resources, or failing to subtract taxes and expenses) but do not take into account any behavioral changes people would make in the absence of any one program, tax, credit, or expense. Furthermore, the data illustrate changes to the poverty population estimate with each component considered in isolation. People are often affected by
36 Median gross rents by number of bedrooms (Table B25031) and median selected monthly owner costs (Table B25088) are available from the U.S. Census Bureau, American Community Survey 2023 One-Year Estimates, and can be queried by region; for example, see https://data.census.gov/table/ACSDT1Y2021.B25031?t=Renter%20Costs&g= 010XX00US_020XX00US1,2,3,4.
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multiple resource components; therefore, the numbers represented by separate bars should not be added together.
Social Security, which is included in both the SPM and official poverty measures, had the biggest impact on the number of persons kept out of poverty (27.6 million in 2023 according to the SPM). While it was designed to be an income insurance program for workers and their families and not targeted specifically to the poor, it had a large antipoverty effect nevertheless. While most of those kept above poverty by Social Security were ages 65 and older (19.5 million), a substantial minority were younger: 6.7 million were aged 18 to 64, and 1.4 million were children under age 18. Some of those in the younger age groups are Social Security recipients themselves because of a disability, but others were kept out of poverty because an older family member received it.
Refundable tax credits are measured only in the SPM, not the official measure; they helped 6.4 million persons avoid poverty in 2023. One such credit, the refundable portion of the CTC, helped 2.4 million avoid poverty in 2023.37 SNAP helped 3.4 million avoid poverty in 2023 under the SPM.
Work expenses and child care expenses combined, which in the SPM are capped at the amount of the earnings of the lowest-earning adult in the family, increased in 2023. More people started working in 2023, driven largely by increases in part-time work. These increases helped to explain the decline in the official poverty rate; under the SPM the poverty rate did not fall as readily because the SPM takes account of child care and work-related expenses (capped at the earnings of the lowest-earning adult family member), as well as payroll taxes. Median capped work-and- child-care expenses went up from $1,612 in 2022 to $1,737 in 2023,38 and the number falling below SPM poverty as a result of including these expenses went up from 3.6 million persons in 2022 to 4.0 million persons in 2023. FICA had a similar increased effect, from 4.1 million persons in 2022 to 4.6 million persons in 2023.
37 During the COVID-19 pandemic, Congress passed legislation that expanded refundable tax credits in order to counteract the negative economic impact of the pandemic. As a result, the SPM registered greater numbers of persons lifted out of poverty by the tax credits than it had previously. The expansions to the tax credits expired after the pandemic was over, and accordingly the SPM registered fewer persons lifted out of poverty by them. For a discussion of the impacts of the expanded tax credits on SPM poverty estimates, and their expiration, see CRS Report R48055, Poverty in the United States in 2022, by Joseph Dalaker. For a discussion of expansions to the Child Tax Credit under ARPA, see CRS Report R46839, The Child Tax Credit: The Impact of the American Rescue Plan Act (ARPA; P.L. 117- 2) Expansion on Income and Poverty, by Margot L. Crandall-Hollick, Jameson A. Carter, and Conor F. Boyle. For a discussion of expansions to the Earned Income Tax Credit, see CRS Report R44825, The Earned Income Tax Credit (EITC): Legislative History, by Margot L. Crandall-Hollick.
38 Author’s computations using the CPS ASEC 2023 and 2024 public use files, using the PROC MEANS procedure in SAS.
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Figure 7. The Effects of Each Transfer, Tax, or Expense on the Number of People
Identified as Below Poverty Using the SPM: 2022 and 2023
Source: CRS, using data from Table B-7 of Emily A. Shrider, Poverty in the United States: 2023, U.S. Census Bureau, Current Population Reports number P60-283, September 10, 2024, at https://www.census.gov/library/ publications/2024/demo/p60-283.html. Notes: Numbers of people represent the estimated change in the population identified as poor if the SPM’s income definition were changed to exclude or include the resource component labeled at left. This can be thought of as the marginal impact that each resource or expense had on the population below poverty in 2023. Because people often are affected by more than one of the resource components listed, cumulative effects of multiple resources cannot be computed by summing the bars. The impact on the estimated number of poor was computed for each component in isolation, leaving all else equal. Child care expenses are included in work expenses. FICA: Federal Insurance Contributions Act tax (payroll tax for Social Security and Medicare) SNAP: Supplemental Nutrition Assistance Program SSI: Supplemental Security Income TANF: Temporary Assistance for Needy Families UI: Unemployment Insurance WIC: The Special Supplemental Nutrition Program for Women, Infants, and Children
Poverty in the United States in 2023
Congressional Research Service R48279 · VERSION 1 · NEW 22
Author Information
Joseph Dalaker Analyst in Social Policy
Acknowledgments
Calvin DeSouza, CRS Geospatial Information Systems Analyst, assisted with mapping, and Amber Wilhelm, CRS Visual Information Specialist, created the figures.
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