States Where Poverty Is Worse Than You Think

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States Where Poverty is Worse Than You Think

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13. Colorado
> Supplemental poverty rate: 11.2% (14th lowest)
> Official poverty rate: 10.2% (9th lowest)
> Cost of living: 3.2% more than national avg. (11th highest)
> Uninsured rate: 7.5% (23rd lowest)

After accounting for a wide range of factors not considered in the official poverty rate — including the tax code, nondiscretionary spending, and cost of living — some 11.2% of Colorado residents live in poverty. In comparison, 10.2% of state residents live below the official poverty threshold. The supplemental poverty measure is often used to gauge the efficacy of government tax breaks and programs aimed at relieving poverty. In Colorado, goods and services cost an average of 3% more than they do nationwide, and the state does not appear to be doing enough to offset those costs for its poorest residents.

Colorado is one of 13 states with a supplemental poverty rate at least 1 percentage point higher than its official poverty rate.

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12. Illinois
> Supplemental poverty rate: 13.4% (23rd highest)
> Official poverty rate: 12.2% (25th lowest)
> Cost of living: 0.3% less than national avg. (15th highest)
> Uninsured rate: 6.5% (20th lowest)

The supplemental poverty rate in Illinois of 13.4% is higher than the state’s 12.2% official poverty rate. Unlike the traditional poverty measure, the supplemental poverty rate accounts for tax burdens, and some Illinois residents are heavily taxed. The amount Illinois residents pay in property taxes is more than in all but four other states — and real estate taxes affect homeowners and renters alike.

While a significant portion of people in poverty work full-time, poverty is usually a consequence of unemployment. In Illinois, some 5.9% of the labor force was out of work in 2016, a full percentage point higher than the U.S. unemployment rate that year.

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11. Nevada
> Supplemental poverty rate: 14.8% (12th highest)
> Official poverty rate: 13.3% (20th highest)
> Cost of living: 2.0% less than national avg. (19th highest)
> Uninsured rate: 11.4% (8th highest)

Out-of-pocket medical expenses can be a considerable financial burden for anyone who makes regular doctor visits — and especially for those without health insurance. In Nevada, some 11.4% of the population lacks health insurance, one of the largest shares of any state and far more than the 8.6% national uninsured rate. While out-of-pocket medical expenses are not factored into the official poverty rate, they are considered in the supplemental poverty measure. Considering the state’s large uninsured population, medical expenses may help explain why more people may live below the poverty line in Nevada than is reflected by the state’s official poverty rate.

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10. New Hampshire
> Supplemental poverty rate: 8.8% (4th lowest)
> Official poverty rate: 6.9% (the lowest)
> Cost of living: 5.0% more than national avg. (9th highest)
> Uninsured rate: 5.9% (15th lowest)

Despite differences between the state’s official and supplemental poverty rates, relatively few New Hampshire residents are facing serious financial hardship. The state’s 6.9% poverty rate and 8.8% supplemental poverty rate are respectively the lowest and fourth lowest among states.

The age demographics of New Hampshire’s population may help explain why the gap in poverty measures. Partly because many low income families with children are eligible for tax refunds such as the earned income tax credit (EITC) that are not accounted for in the poverty threshold, fewer children under 18 live in poverty than the official rate would suggest. Meanwhile, elderly populations have higher supplemental poverty rates than the official poverty rates, due in part to higher out-of-pocket medical costs. Only 19.5% of New Hampshire residents are 18 and under compared to 22.8% of the U.S. population. Similarly, 17.0% of state residents are 65 and older compared to only 15.2% of the nation as a whole.

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9. Massachusetts
> Supplemental poverty rate: 13.7% (20th highest)
> Official poverty rate: 11.6% (21st lowest)
> Cost of living: 6.9% more than national avg. (7th highest)
> Uninsured rate: 2.5% (the lowest)

The typical Massachusetts household earns $75,297 a year, about $18,000 more than the typical American household and more than the median income in all but three other states. Despite the high incomes, a far higher share of Bay State residents face serious financial hardship than the official poverty rate of 11.6% suggests.

Goods and services in Massachusetts cost about 7% more on average than they do nationwide. Housing is particularly expensive in Massachusetts. Rent costs are about 23% higher in the state than they are on average nationwide. Massachusetts’ higher cost of living likely pushes some lower income residents below the poverty line and may partially explain why the state’s 13.7% supplemental poverty rate is 2.1 percentage points above its official poverty rate.