Revised Census Formula Finds More Americans Living in Poverty

Revised Census Formula Finds More Americans Living in Poverty

A new preliminary census formula has found that the number of Americans living below the poverty line in 2009 was higher than previously calculated, especially among the elderly and those living in the western United States, the Associated Press reports.

The revised formula calculated the overall poverty rate in 2009 to be 15.7 percent, or 47.8 million people — a considerable increase from the official 2009 rate of 14.3 percent, or 43.6 million. In terms of demographic group, the largest increase was seen among Americans 65 and older, whose poverty rate rose from 8.9 percent to 16.1 percent. The number of adults between the ages of 18 and 64 living below the poverty line also increased, especially among whites and Hispanics. Children, blacks, and unmarried couples were less likely to be considered poor under the revised measure.

The increase can be attributed to new considerations in the formula such as adjustments for geographical variations in cost of living; out-of-pocket medical expenses; transportation, commuting, and childcare costs; and other factors. According to the revised formula, the poor are most likely to live in the suburbs, the Northeast, and the West. Indeed, nearly 20 percent of the population in the West is considered poor under the revised formula. However, if out-of-pocket medical costs were removed from the equation, poverty at the national level would have dropped from 15.7 percent to 12.4 percent.

The current census formula is based on the cost of an emergency food diet in 1955 and does not factor in other living costs or non-cash government aid when calculating income. The official poverty rate, which has long been criticized by economists for only including pretax cash and not factoring in medical, transportation, and work expenses, will remain unchanged. The new figures will be published as a supplement for federal agencies and state governments to use in determining antipoverty policies.

Hope Yen. "New Formula Finds More Americans in Poverty." Associated Press 01/06/2011.