Special Report

25 Facts of Life the Federal Poverty Rate Completely Ignores

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6. Work expenses

Some other necessary expenses that the official poverty rate does not take into account can be grouped under work expenses, including flights, hotels, public transportation costs, materials used by artists and freelancers, and more. These costs can be compensated by employers, but often they are not.

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7. The degree of poverty

The poverty rate does not tell us the severity of the conditions of the people living in poverty. A family of four with an annual income of $25,000 and another family of the same size with an income of $10,000 are both considered as being in poverty, but they likely have very different experiences.

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8. Differences in clothing costs

The official federal poverty rate is meant to take into account the cost of food but ignores changes to costs of other basic necessities, including clothing, home costs, and utilities.

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9. Differences in home costs

Monthly housing costs in San Francisco for a family of four total, on average, $2,666, or about $2,000 more than in Jefferson City, Montana. The differences in these expenses are not taken into account in the poverty rate.

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10. Differences in utility costs

According to one estimate, the total annual cost of utilities — electricity, natural gas, internet access, cable, and water — ranges from more than $700 in Hawaii to less than $350 in Idaho. These costs, too, are not factored into the official poverty rate.