There’s some good news and some bad news about poverty in America.
First, the bad: Poverty rates are higher than previously thought in 13 states and D.C. The good? Poverty rates are lower in 28 other states.
Those are the findings of a new Census report out this week that seeks to better measure poverty. Here’s why: The official poverty rate ignores some important costs and benefits confronted by the poor. Poverty can be offset, for example, by government assistance in the form of food stamps, subsidized housing and home energy assistance. At the same time, it can be made worse by factoring in necessary costs such as taxes, child care, work-related expenses and medical costs.
Enter the Census’s supplemental poverty rate, a measure first introduced two years ago to account for all those extra concerns. According to that measure, the poverty rate for 2012 was actually 16 percent, up from the previously reported rate of 15.1 percent for last year.
Children had lower rates of poverty last year under the new measure, while adults — especially seniors — had higher rates. The share of those under 18 living in poverty shrank by 4.3 percentage points to 18 percent. The rate of poverty among seniors rose 5.8 points to 14.8 percent. (Health-care costs in general tend to grow faster than inflation, and older adults tend to require more health care.)
Factoring in Social Security benefits reduced the official poverty rate more than any other cost or benefit considered. Refundable tax credits were next, followed by the Supplemental Nutrition Assistance Program — the program formerly known as food stamps that was reduced for millions of Americans at the start of November. Medical out-of-pocket expenses (MOOPs) increased the poverty rate more than any other element considered.
The supplemental measure finds that the poverty rate was 7.3 percentage points higher in California, the state with the biggest gain to its official rate. New Jersey was next, followed by Hawaii. Poverty also rose in Florida, Nevada, the District of Columbia, Maryland, Connecticut, Massachusetts, New Hampshire, Virginia, New York, Illinois and Colorado.
The poverty rate was adjusted down the most in Mississippi, where it was 4.6 percentage points lower than the previous estimate. West Virginia’s rate was 4.3 percentage points lower, while New Mexico’s was 4.2 percentage points lower. The rate also fell in 25 other states: Alabama, Arkansas, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Vermont, Wisconsin and Wyoming.
The map below shows the extent of the adjustments to each state’s poverty rate under the supplemental measure. (A zero value indicates a statistically insignificant change.)