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In the United States, How is the Poverty Line Determined?

In the United States, the poverty line is calculated by the government, using a formula that considers family size and income. This threshold is pivotal for determining eligibility for various social services and aid. It's a measure that reflects the minimum income necessary for basic living costs. But how does this affect individuals and families day-to-day? Explore the real-world implications with us.
Diana Bocco
Diana Bocco

Poverty line, or poverty threshold, is used to mark the minimum income needed to achieve a satisfactory standard of living. While this may mean different thing in different parts of the world, in the US, being above this threshold means having access to water, food, shelter, education, medical care, and adequate clothing. The poverty line varies widely depending on the state, the number of people living in the household, the number of children in the household, and factors like disability and access to medical care.

In the US, the poverty line rises or falls every year according to the Consumer Price Index and other factors. In 2010, a single person needed to earn a minimum of $11,139 US Dollars (USD) (more in Alaska and Hawaii) a year to stay over the threshold. A family of four needed a combined income of at least $22,113 USD. According to these guidelines, more than 46.2 million people in the US were living in poverty in that year.

The poverty line is higher in Alaska than in the contiguous United States.
The poverty line is higher in Alaska than in the contiguous United States.

Individuals who fall below the poverty line often lack basic things like microwaves, clothes dryers, and computers. Research has found that 91% of these families own a color TV and 52% own a stereo, however. Close to 90% of Americans in poverty have regular access to food, either through food stamps or food assistance programs like soup kitchens. A much higher percentage lack access to medical care, and while a few may be admitted into Medicaid or other government programs, most are not. This is especially true of adults, as children and the elderly have an easier time obtaining free medical care.

About 90% of poor Americans receive food assistance.
About 90% of poor Americans receive food assistance.

On an interesting note, 46% of individuals who fall under the poverty line own their own homes. This is a percentage similar to the one obtained from people who own an acceptable income and do not receive government assistance. Of that 46%, some own a mobile home, and some own a three-bedroom home, although the general condition of the housing can vary widely. Many people who live in poverty are in urgent need for basic household repairs, such as a roof replacement or a pipeline fitting, and must do without them.

Most families living below the poverty line still have access to food thanks to community and government programs.
Most families living below the poverty line still have access to food thanks to community and government programs.

Critics of the current system used to determine the poverty threshold argue that the percentage of people living in poverty is actually much higher than what it seems. This is because the line does not take into consideration certain factors such as rent or the median price of a home. In other words, the threshold in the United States is the same, no matter what the cost of living in the area is (with the exception of Alaska and Hawaii). If the calculation did take these factors into account, they argue, the percentage of Americans living in poverty would likely be much higher.

Frequently Asked Questions

What is the poverty line in the United States?

People below the poverty line typically do not have conveniences like clothes dryers, microwaves, and computers.
People below the poverty line typically do not have conveniences like clothes dryers, microwaves, and computers.

The poverty line in the United States is a threshold set by the federal government to define the minimum income necessary to cover basic needs. According to the U.S. Department of Health and Human Services, the 2023 poverty line for a family of four is $27,750. This figure is adjusted annually for inflation and varies depending on family size and composition.

How is the U.S. poverty line calculated?

The poverty threshold in the United States varies substantially from state to state.
The poverty threshold in the United States varies substantially from state to state.

The U.S. poverty line is calculated using a formula developed in the 1960s by Mollie Orshansky. It is based on the cost of a minimum food diet in 1963, multiplied by three to account for other family expenses. The calculation is updated annually for inflation using the Consumer Price Index. This method has been critiqued for not fully capturing current economic realities, but it remains the official measure.

Does the poverty line vary by state or region?

While the poverty line is the same across the contiguous United States, there are variations for Alaska and Hawaii due to their higher cost of living. For example, the 2023 poverty line for a family of four is $34,680 in Hawaii and $34,380 in Alaska. However, the poverty line does not adjust for regional cost-of-living differences within the contiguous states, which can lead to disparities in how poverty is experienced geographically.

What factors are considered in determining the U.S. poverty line?

The primary factor considered in determining the U.S. poverty line is food cost, which is based on the U.S. Department of Agriculture's economy food plan. The assumption is that food constitutes one-third of total household expenses. However, this calculation does not directly consider other costs such as housing, healthcare, education, or regional cost of living, which can significantly affect a family's financial situation.

How does the poverty line impact government assistance programs?

The poverty line is used as an eligibility criterion for various government assistance programs. For instance, programs like Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF) use the poverty line to determine who qualifies for aid. Being above or below the poverty line can significantly impact an individual's or family's access to these critical support services.

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Discussion Comments

feasting

@StarJo – That's a great attitude. I wish more people could find contentment in the simple things.

My sister's husband lost his job two years ago, and they had to cut way down on everything, basically. All he could find to replace his well-paying job was a part-time job making minimum wage, so they soon fell beneath the United States poverty line.

They lost their home and had to move into a old, tiny house with low rent. They had to sell one of their vehicles, and the kids had to give up access to online movies and games, and they could not go shopping or to movies with friends every weekend.

They whined and complained incessantly, and it really stressed out their already despairing parents. I think that if the kids had been more cooperative, the situation would have been more bearable for everyone. Falling into poverty can either bring a family closer or tear them apart.

StarJo

The national poverty line really doesn't mean a whole lot to me. My husband and I just barely make it into the lower class with our combined incomes, and we are doing just fine.

We don't have cable TV or internet access from our homes, but we really don't need those things. We have books and local channels, and if I need to get online for any reason, I can use the library computers.

We have clothing, shelter, and food, so I am grateful. A thousand dollars is all that separates us from the current poverty line, but we are pretty content.

Perdido

@seag47 – There is one possibility. I believe that many people living under the poverty line in America are retired, so they could afford to pay for their own homes over the decades while they were working, but now, they have very little or no income.

You can't pay for a home with Social Security, generally speaking, so it is very likely that a large percentage of these people are beyond retirement age and already own their home. They may not need the extra money to survive because of this, so just because they are considered poor, they may not be suffering.

seag47

Does owning a home mean that you have already paid it all off, or does it simply mean that you bought it but you are still making payments? I understand how poverty stricken people could be slowly trying to make house payments, but I don't get how they could have already paid for them in full.

anon133466

One definition of the poverty line, often applied to Third world countries is "enough money to purchase 1900 calories of food a day." But in Western Countries the poverty line is "the point at which ones basic needs - food, shelter, medical and simple clothing - consumes their entire income."

Glasshouse

@ Cougars- The national poverty line in India is much lower. The Indian government places the poverty line at about 300 rupees per month, the equivalent of a little less than 6.50 USD. Could you imagine living off that meager amount of money? That is about $78 a year.

Even more depressing is the fact that over 300 million Indians live below the State governments established poverty line, and about 70% of all Indians live below the International poverty line. The number of Indians living on less than $1.25 a day is equal to two and a half times the United States population.

cougars

@ Istria- The international poverty line is extremely low when you compare it to the poverty line in the United States. The article stated that the poverty line in this country is around $9,800 per year, and most people below the poverty line still owned creature comforts like televisions, homes, etc. This is a stark contrast from the poverty line established by the World Bank.

The World Bank has established the international poverty line at $1.25 per day. In other words, the World Bank says that pure survival is achievable if a person earns a little more than $450 per year.

istria

What is the world poverty line? What organization determines what the world poverty line is?

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    • The poverty line is higher in Alaska than in the contiguous United States.
      By: juan35mm
      The poverty line is higher in Alaska than in the contiguous United States.
    • About 90% of poor Americans receive food assistance.
      By: Julián Rovagnati
      About 90% of poor Americans receive food assistance.
    • Most families living below the poverty line still have access to food thanks to community and government programs.
      By: Jasmin Merdan
      Most families living below the poverty line still have access to food thanks to community and government programs.
    • People below the poverty line typically do not have conveniences like clothes dryers, microwaves, and computers.
      By: itestro
      People below the poverty line typically do not have conveniences like clothes dryers, microwaves, and computers.
    • The poverty threshold in the United States varies substantially from state to state.
      By: TheFinalMiracle
      The poverty threshold in the United States varies substantially from state to state.