Using a supplemental poverty measure that incorporates everyday expenses like child care and out-of-pocket medical expenses, the Census Bureau determined that 49.1 million Americans, or 16% of the population, live below the poverty line.
The supplemental measure, which is still considered experimental and will not be used to determine who is eligible for federal aid, was introduced in response to growing criticism that current poverty measurements are out of date. It is based on recommendations from a government-mandated panel, which found that the official poverty measurement fails to adjust for the rising cost of living, does not account for expenses crucial to holding down a job, like child care, and doesn’t factor in medical costs that vary due to age, health status and insurance coverage.
The supplemental measurement accounts for these added expenses and also factors in an individual or family’s housing status – whether they rent, own a home or carry a mortgage – to determine the poverty threshold.
Under the new measurements, poverty thresholds for a family of four increased to $24,344 when not accounting for housing status. That breaks down to $25,018 for homeowners with mortgages, $20,590 for homeowners without a mortgage, and $24,391 for renters.
Comparatively, the official measure, established in the 1960s, defines poverty as an annual income of $11,139 for an individual or $22,314 for a family of four. The formula is based largely on food costs.
Americans 65 and older saw the largest increase in poverty when using the new metric, with the rate raising from 9% to 15.9%, largely due to medical expenses. Adults 18-64 also saw increases (13.7% vs. 15.2%) due mostly to commuting and child care costs.
Even without considering added expenses, official poverty estimates released in September found that 46.2 million Americans are living below the poverty line – the highest level since 1993.
The Census Bureau says it will continue to release data using each measure until further research is conducted to determine whether formal changes need to be made to them.
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