> Supplemental poverty rate: 11.8% (23rd lowest)
> Official poverty rate: 14.3% (17th highest)
> Cost of living: 10.8% less than national avg. (7th lowest)
> Uninsured rate: 5.6% (13th lowest)
Ohio’s official poverty rate of 14.3% includes some 294,000 residents that may not actually be in poverty. The supplemental poverty measure factors in a range of considerations not included in the official poverty rate. Chief among them are out-of-pocket medical expenses and cost of living.
In Ohio, only 5.6% of residents do not have health insurance, a smaller share than the nationwide insurance coverage rate of 8.6% of Americans. The low uninsured rate greatly reduces out-of-pocket medical costs. Additionally, goods and services are 10.8% less expensive in Ohio than they are nationwide. These factors help push the Buckeye State’s supplemental poverty rate 2.6 percentage points below the official poverty rate.
> Supplemental poverty rate: 15.0% (10th highest)
> Official poverty rate: 18.2% (4th highest)
> Cost of living: 11.4% less than national avg. (5th lowest)
> Uninsured rate: 5.1% (8th lowest)
About 142,000 fewer people in Kentucky live in poverty than the state’s 18.2% official poverty rate suggests. Like many states with lower supplemental poverty rates, living in Kentucky is not particularly expensive. Basic needs like food, clothing, shelter, and utilities cost about 11.4% less in the state than they do on average nationwide. After factoring in Kentucky’s low cost of living, the state’s fourth highest 18.2% poverty rate falls to the 10th highest supplemental poverty rate of 15.0%.
A stronger economy would likely go further in alleviating poverty in Kentucky, as joblessness is more of a problem in the state than it is nationwide. Some 5.2% of the state’s labor force is out of work, the fourth highest unemployment rate among states and a full percentage point above the U.S. unemployment rate.
3. New Mexico
> Supplemental poverty rate: 15.7% (8th highest)
> Official poverty rate: 19.2% (3rd highest)
> Cost of living: 5.6% less than national avg. (23rd lowest)
> Uninsured rate: 9.2% (14th highest)
New Mexico has far fewer residents facing serious financial hardship than its official poverty rate suggests. Considering the state’s low cost of living, low taxes, and noncash benefits issued by the state, the share of New Mexicans living on poverty level income is actually 15.7% — well below its official poverty rate of 19.2%. Refundable tax credits in particular, which disproportionately benefit children, account for a large portion of the difference. One quarter of children in New Mexico are in poverty according to the official measure, the fourth highest rate of all states.
While the tax structure and other state programs appear to be effective in reducing poverty, a better job market would likely be even more beneficial. New Mexico’s 2016 unemployment rate of 6.7% is the highest of any state and well above the U.S. unemployment rate of 4.9%.
2. West Virginia
> Supplemental poverty rate: 14.1% (18th highest)
> Official poverty rate: 17.7% (6th highest)
> Cost of living: 11.1% less than national avg. (6th lowest)
> Uninsured rate: 5.3% (10th lowest)
West Virginia’s official poverty rate of 17.7% is well above the U.S. poverty rate. However, poverty may be less of a problem in the state that it is nationwide. Accounting for taxes, cost of living, medical expenses, and various noncash benefits, only 14.1% of West Virginians live in poverty compared to 14.7% of Americans.
The lower supplemental poverty rate does not suggest economic conditions are satisfactory in West Virginia, however. Some 6.0% of the state’s labor force was out of work in 2016, the fourth highest annual unemployment rate among states. Additionally, while many may not be living in poverty, a large share of West Virginians are relatively poor. The typical household in the state earns only $43,385 a year, the second lowest median income of any state.
> Supplemental poverty rate: 16.9% (5th highest)
> Official poverty rate: 20.8% (the highest)
> Cost of living: 13.8% less than national avg. (the lowest)
> Uninsured rate: 11.8% (6th highest)
Mississippi leads the nation in both measures of poverty. Still, 114,000 state residents are lifted out of poverty by the state’s tax policies, various noncash benefits, and a low cost of living. The state’s supplemental poverty rate of 16.9% is nearly 4 percentage points below its official rate.
Mississippi’s low cost of living largely explains the difference. With goods and services in the state 13.8% less expensive than they are on average nationwide, the state is the least expensive to live in in the country. Refundable tax credits like EITC, designed to assist working families with children, also likely contributes substantially to the relatively low supplemental poverty rate. According to the official measure, nearly 30% of children in Mississippi are in poverty, the second highest rate in the nation.