Are 46 million Americans Living in Poverty?

As part of my series analyzing the article suggesting that Obama has changed the economy for the worse, let’s now move on to the fifth claim: that 46M Americans are living in poverty,

First off, what does it mean to be “living in poverty?”

According to the Census’s most recent data (2015), to be living “in poverty” a household must have income below:
$11,770 for 1 person
$15,930 for 2 people
$20,090 for 3 people
… and so on.

As a quick aside, let’s note that, in many parts of the world, “poverty” is defined as living on less than $1/day so let’s take a step back and give tremendous thanks that we live in a country in which our poverty line is orders of magnitude higher than that. This in no way takes away from the plight of the US’s lowest earners – but it does remind us how blessed we are even to be here.

Back to work, though, how many Americans are living in poverty according to this standard? In 2015 13.5% of Americans (43M) were in poverty. 43M is less than 46M so the claim is FALSE.

Still, 43M and 13.5% both sound alarmingly high to me so let’s look closer at what these figures really mean. 13.5%, it turns out, is in line with recent historical norms.13.5% is a greater percentage of Americans living in poverty than 10 years ago (12.6%) but has been steadily declining since the recession – a good trend.

As one writer points out, though, these Census figures are a little misleading as they measure the number of people who would be in poverty without government assistance (through SNAP – food stamps – and tax credits), rather than those who are literally living in poverty. By his calculations, the percentage of Americans actually living in poverty is ~3.5% (~11M people) while the other ~10% are being buoyed out of poverty through government assistance. Obviously there is a debate about whether such assistance helps lift people permanently out of poverty, does nothing, or contributes to people staying in poverty.

CONCLUSION: the number of people actually living in poverty isn’t as high/alarming as it sounds at first blush, but that’s only due to assistance from the government. This seems to have been the case for some time without much change over the last decade. I, for one, would rather see investments in programs aimed at addressing the systemic causes of poverty rather than just helping those already in poverty to stay afloat. Such programs may already exist but I would question their efficacy given the low change in poverty rate over the last decade and I would support experimentation with new approaches.

Published by Bryan Guido Hassin

These are the musings of a global cleantech entrepreneur. This blog began as a way to document my experience during the IMD MBA in Switzerland and now is the place where I publish eclectic thoughts on business, politics, fitness, entertainment, travel, wine, sports, and . . . whatever else is top of mind.

Leave a Reply

%d bloggers like this: