When cost of living is taken into account, poverty rate is higher in the Washington area

November 6, 2013

The number of poor people in the Washington area is likely much higher than official poverty statistics show, largely because of the high cost of housing, according to an alternate measure of poverty released by the Census Bureau Wednesday.

Under the new calculation, a family living around Washington could earn almost $10,000 a year above the federal poverty level of $23,550 for a family of four and still be poor.

The alternative measurement prepared by the Census Bureau is an attempt to offer a more nuanced picture of poverty by taking into account the value of government benefits and living expenses in different parts of the country .

Among the benefits that come to low-income households are programs that provide food stamps, school lunches and housing subsidies. Necessary expenses that eat up a chunk of income include housing, local taxes, child care and work expenses, such as commuting.

None are accounted for in the official poverty measure, which is based solely on cash income and pegs the nation’s poverty rate at 15 percent. The alternative measure bumps it up to 16 percent.

But the difference between the two measurements is much larger at the state and local level. Poverty levels are significantly higher in states where housing is expensive, including California, New York, Massachusetts and around Washington.

In the District, for example, the alternative measure pushes the poverty rate to almost 23 percent compared to just over 19 percent officially. In Maryland, the rate rises to 13 percent instead of 10 percent. In Virginia, the poverty rate also rises over 13 percent, up from 11 percent in the official count. All are roughly the same as they were a year ago.

The official federal poverty level is used to determine eligibility for federal assistance. Under the alternative measure, the line in the Washington area would be around $33,000 for a homeowner with a mortgage, about $26,000 for a homeowner with no mortgage and $32,000 for a renter. The alternative measure has no impact on the amount of federal benefits received.

In other parts of the country, the threshold is even higher under the alternative. In the San Jose and San Francisco area, anyone earning less than $35,500 can be considered poor. But in other places where the cost of living is far less, the level is far lower. Outside of metropolitan areas in several states such as West Virginia, a family of four wouldn’t be considered poor unless their income was less than $18,000.

The Census Bureau attributed the regional differences to housing costs, which are not considered when calculating the official poverty rate.

Carol Morello writes about demographics and the census, as well as a lot of other stuff that comes down the pike. She has worked at the Washington Post since 2000.
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