States Where Poverty Is Worse Than You Think

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States Where Poverty is Not As Bad As You Thought

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11. Arkansas
> Supplemental poverty rate: 14.7% (14th highest)
> Official poverty rate: 16.8% (7th highest)
> Cost of living: 12.6% less than national avg. (3rd lowest)
> Uninsured rate: 7.9% (24th lowest)

The official poverty rate in the continental United States does not account for regional differences in cost of living. As a result, states that are relatively inexpensive places to live often have less poverty than the official rate suggests. In Arkansas, housing costs are 36.1% less expensive than they are nationwide, on average, and the overall cost of living is 12.6% less expensive. Accounting for the lower cost of living, including housing, as well as a range of other factors like tax benefits, 14.7% of people in Arkansas live in poverty, versus the state’s 16.8% official poverty rate.

While the Arkansas’ official poverty rate is among the highest of all states, its supplemental poverty rate is in line with the nationwide poverty rate.

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10. Louisiana
> Supplemental poverty rate: 18.4% (3rd highest)
> Official poverty rate: 20.6% (2nd highest)
> Cost of living: 9.4% less than national avg. (15th lowest)
> Uninsured rate: 10.3% (10th highest)

According to Louisiana’s official poverty rate, more than 1 in every 5 state residents face serious financial hardship, the second highest poverty rate of any state. However, the state’s low cost of living and tax benefits, among other factors, help lower the poverty threshold, effectively reducing by 100,000 the number of of residents living in poverty.

Despite the lower supplemental poverty rate, Louisiana remains one of the poorest states in the country. The state’s supplemental poverty rate of 18.4% is well above the U.S. rate of 14.7%, and higher than the supplemental rate in all but two other states.

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9. Alabama
> Supplemental poverty rate: 14.5% (16th highest)
> Official poverty rate: 16.8% (7th highest)
> Cost of living: 13.2% less than national avg. (2nd lowest)
> Uninsured rate: 9.1% (15th highest)

Regional differences in cost of living are not factored into the official poverty rate. As a result, poverty may be less common in states with lower living costs than the official poverty rate might suggest. Alabama is one such state. The state has the least expensive housing costs of any state — 37% lower than they are nationwide. Overall, goods and services in Alabama are the second cheapest of any state — 13.2% lower than they are nationwide on average.

Accounting for the state’s low cost of living, in addition to tax refund programs such as EITC, about 110,000 fewer people in Alabama live in poverty than the state’s 16.8% official poverty rate suggests.

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8. South Dakota
> Supplemental poverty rate: 11.4% (16th lowest)
> Official poverty rate: 13.7% (18th highest)
> Cost of living: 11.8% less than national avg. (4th lowest)
> Uninsured rate: 8.7% (19th highest)

Largely because families with children receive tax breaks — and taxes are not factored into official poverty rates — children under 18 have lower supplemental poverty rates than their official poverty rate. In South Dakota, about 1 in every 5 residents are 18 or younger, one of the largest young populations of any state. The relatively young population may partially explain why the state’s 11.4% supplemental poverty rate is well below its 13.7% official poverty rate.

By raising the threshold of poverty income, a low cost of living in the state also helps lift many residents over the federal poverty line. Goods and services in South Dakota are about 12% less expensive than they are on average nationwide.

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7. Kansas
> Supplemental poverty rate: 10.0% (9th lowest)
> Official poverty rate: 12.5% (25th highest)
> Cost of living: 9.6% less than national avg. (13th lowest)
> Uninsured rate: 8.7% (19th highest)

Americans under age 18 are the most likely age group to live below the poverty line. The under 18 population In Kansas, nearly 25% of residents, is one of the largest shares of all states. However, young Kansas residents are not as likely to be in poverty as in other states, even by the official measure. The state’s child poverty rate of 14.1% is one of the few on this list that does not exceed the national percentage of 19.5%. Still, the rate likely drops even lower when refundable tax credits are added into the poverty calculation. As is generally the case among states where poverty is not quite as bad as it seems, low living expenses in Kansas raise the poverty threshold.

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6. Oklahoma
> Supplemental poverty rate: 12.8% (25th highest)
> Official poverty rate: 15.3% (11th highest)
> Cost of living: 10.1% less than national avg. (10th lowest)
> Uninsured rate: 13.8% (3rd highest)

Low income families with young children are eligible for tax refunds such as the EITC, which are not considered in official poverty rates. So large shares of young people, together with a high child poverty rate, can help explain a state’s gap in official and supplemental poverty rates. In Oklahoma, nearly 1 in every 5 residents are 18 and younger, one of the larger shares of children among all states. Approximately 23% of residents under 18 are in poverty by the official measure, the 10th highest of all states.

Regional differences in cost of living are also not factored into official poverty rates. In Oklahoma, goods and services are 10% less expensive than they are on average nationwide, which also helps reduce the state’s supplemental poverty rate.