A New Poverty Calculation Yields Some Surprising Results

The U.S. Census released new statistics this week on poverty in America, and the results were surprising.

California is the most impoverished state in the country with an astounding 23.5 per cent of its population living below the poverty line, and the western part of the country is actually the most impoverished region — 20 per cent of the entire western population of the U.S. lives in poverty. Iowa is the least impoverished state, and the Midwest actually has the lowest poverty rate — 12.8 per cent of the Midwest lives in poverty. The northeastern and southern U.S. have 15 per cent and 16 per cent of their populations living in poverty, respectively.

The figures differ from popular belief because the Census Bureau and the Bureau of labour Statistics have adopted a new method of researching and analysing poverty, entitled the Supplemental Poverty Measure (SPM). 

Here’s how the SPM differs from the traditional measure of poverty:

Census SPM data

Photo: U.S. Census Bureau

SMP attempts to take outdated poverty measurements and update them for the 21st century. For example, the ‘official poverty measure has a set poverty measure that is adjusted for inflation, it only takes into account the fact that prices for various goods and services differ from city to city. The threshold is adjusted, as shown above.

So when the metric is changed, the results are noticeably different — more people are included in the definition that would have been left out, because the measurement changes much more dynamically based on location. For example, the former ‘official poverty measure,’ California has a poverty rate of just 16.3 per cent. In fact, the poverty rate for the entire nation in 2011 jumps one per cent using the SPM metric as opposed to the traditional metric (in terms of the actual number of people, that’s just over 3,000 individuals).

“There are several important differences between the official and supplemental poverty measures,” Census Bureau economist Kathleen Short notes. “For instance, the supplemental measure uses new poverty thresholds that represent a dollar amount spent on a basic set of goods adjusted to reflect geographic differences in housing costs. The official poverty thresholds are the same no matter where you live.”

This map shows which states differ substantially when one uses SPM:

SPM census data map

Photo: U.S. Census Bureau

And here’s how every the U.S. state and the District of Columbia ranked (SPM Three-year Average):

  1. Iowa, 8.4%
  2. North Dakota, 9.0%
  3. Wyoming and Vermont, 9.2%
  4. Nebraska, 9.6%
  5. Minnesota, 10.3%
  6. New Hampshire, 10.4%
  7. Utah, 10.5%
  8. Wisconsin, 10.6%
  9. Maine, 10.9%
  10. South Dakota, 11.0%
  11. Kansas, 11.2%
  12. Pennsylvania, 11.5%
  13. Idaho, 11.9%
  14. Montana, Washington, and Connecticut, 12.0%
  15. West Virginia, 12.3%
  16. Ohio and Alaska, 12.6%
  17. Oklahoma and Virginia, 12.7%
  18. Rhode Island and Missouri, 12.9%
  19. Kentucky, 13.4%
  20. Michigan, 13.5%
  21. Maryland, 13.6%
  22. Massachusetts, 13.7%
  23. North Carolina, 13.8%
  24. Delaware, 14.0%
  25. Oregon, 14.1%
  26. Colorado, 14.3%
  27. New Jersey, 14.4%
  28. Alabama, 14.5%
  29. Indiana, 14.6%
  30. Tennessee, 14.8%
  31. Illinois, 15.0%
  32. South Carolina, 15.2%
  33. New Mexico, 15.4%
  34. Arkansas, 15.6%
  35. Mississippi, 15.8%
  36. Texas, 16.5%
  37. Louisiana, 17.0%
  38. Hawaii, 17.4%
  39. New York, 17.8%
  40. Georgia, 19.0%Nevada, 19.4%
  41. Florida, 19.5%
  42. Arizona, 19.8%
  43. District of Columbia, 23.2%
  44. California, 23.5%

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