As the United States endures its 10th month of the health and economic crises resulting from the COVID-19 pandemic, many Americans continue to face serious economic hardship. While some managed to keep above the poverty threshold, many were pushed into poverty or deeper poverty.
Funds from the CARES Act, which Congress passed in late March to provide some economic relief during the pandemic, appear to be drying up, and the nationwide economic recovery has been slowing considerably in recent months. Approximately 21.9 million jobs were lost between February and April. While a little over half of that loss — 12.3 million jobs — were recovered over the following seven months, the 245,000 jobs employers added in November was the lowest job gain since the March-April crash.
According to a Pew Research Center survey published in September, approximately one in every four adults in the U.S. have struggled to pay their bills since the coronavirus outbreak started. Savings, retirement accounts, support from friends and family, and food banks have helped many make ends meet.
The official poverty rate, developed in 1963, was not designed to account for these financial supports, nor does it factor costs such as living expenses and medical bills. It is based only on pre-tax income thresholds related to the cost of a minimum food diet and the number of individuals who depend on that income.
Many have criticized the official poverty rate for not being able to provide a more accurate picture of how many Americans are struggling financially. Federal welfare spending increased dramatically over the past 50 years. At the same time, prices of basic goods and services increased, while wage growth remained relatively stagnant for most workers.
In 2011, the U.S. Census Bureau began to regularly publish the supplemental poverty measure, a measure of poverty that takes into account cost of living, expenses such as medical costs and taxes, and anti-poverty subsidies like food stamps and unemployment insurance.
After adjusting for these measures, the U.S. poverty rate rises from 11.5% to 11.7% — while this may seem like a small increase, it amounts to an increase of 3.2 million people. In some states, the increase in poverty based on the two measures is far greater.
In an October 2019 report analyzing the effect of various anti-poverty subsidies, the Census Bureau determined that Social Security, refundable tax credits, the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income, housing subsidies, child support payments, school lunch programs, Temporary Assistance for Needy Families (TANF), and unemployment insurance have the largest impact on the number of individuals considered to be living in poverty under the supplemental poverty measure.
In the same report, researchers determined that medical expenses, work expenses, Federal Insurance Contributions Act (FICA) tax, and federal income tax are the biggest factors pushing Americans below the poverty line as measured by the supplemental poverty measure.
To determine the states where poverty is worse than you think, 24/7 Wall St. ranked states by the percentage-point difference between the official poverty rate and supplemental poverty rate using data from the Census Bureau.
Data on the number and percentage of people living below the poverty line according to each measure are three-year averages for 2017, 2018, and 2019. Data on the percentage of households receiving SNAP (food stamps) benefits and median household income came from the Census Bureau’s American Community Survey and are for 2019. Data on regional price parity, or cost of living, came from the Bureau of Economic Analysis and are for 2018. Data on the average monthly SNAP benefit per each household member in fiscal 2018 is from the Center on Budget and Policy Priorities. Data on the percentage of eligible individuals who received Special Supplemental Nutrition Program for Women, Infants and Children (WIC) benefits in 2017 comes from the U.S. Department of Agriculture. All data are for the most recent period available.
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