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Did you Know the Hidden Poverty in the United States?


Did you Know the Hidden Poverty in the United States. The COVID19 pandemic has reignited debate over the social safety net and the government’s role in poverty reduction. Following record breaking unemployment and economic instability, the US government used the CARES Act, the Consolidated Appropriations Act, and the American Rescue Plan to provide billions of dollars in emergency relief. 

Build Better

The Biden administration recently introduced the Build Back Better Act, a $1 trillion reconciliation bill to help American children and families in need.The distribution of the Build Back Better Act funds will be influenced in part by how lawmakers define poverty. 

To establish eligibility and administer funding, the current bill employs a variety of poverty metrics. Access to child care, for example, is prioritized for “families with incomes below 200 percent of the federal poverty limit.” Children


The distribution of the Build Back Better Act funds will be influenced in part by how lawmakers define poverty. To establish eligibility and administer funding, the current bill employs a variety of poverty metrics. Access to child care, for example, is prioritized for “families with incomes below 200 percent of the federal poverty limit.” Children who reside in families whose income does not exceed 133 percent of the poverty level are eligible for Medicaid. Low income households earning at or below 80% of the area median income or 200 percent of the poverty level are eligible for some programs to help with home heating and cooling expenditures.


Understanding the distinctions between poverty indicators is critical since they influence the amount of people who may be considered poor.Understanding the distinctions between poverty indicators is critical because they determine the amount of people who may be eligible for assistance and guide decision-makers in their efforts to give financial assistance.


How Does the Official Poverty Measure Work?

When lawmakers in the United States talk about lifting people out of poverty, they usually refer to the official poverty measure, which began as a tool in Lyndon B. Johnson’s War on Poverty in the 1960s.1 Before the “war” could begin, the Johnson administration needed a way to count the number of people living in poverty, distribute aid, and assess the effectiveness of anti poverty policies. Johnson’s new Office of Economic Opportunity chose a definition based on an article by Mollie Orshansky, a Social Security Administration economist. 


The official poverty metric now comes in two flavors: 

1) The United States Census Bureau’s poverty standards, and 2) the Department of Health and Human Services’ Federal Poverty Guidelines (FPG) (HHS). 


Poverty criteria are used to determine eligibility for certain government programs, whereas poverty thresholds are used to measure poverty. 

The age and family composition of persons have an impact on poverty threshold estimations. 

To calculate poverty status, poverty rules simply count the number of members in a family unit. 


They also differ by location; Alaska and Hawaii have their own set of poverty requirements. 

Annual changes in the consumer price index are used to update both poverty criteria and guidelines. 

And both are only calculated for persons who can be considered to be poor people


The poverty figures do not include those who live in prisons, nursing homes, college dorms, military barracks, or other unusual housing arrangements. 


Based on official poverty levels, the Census Bureau estimated that 37.2 million people, or 11.4 percent of the US population, were living in poverty in 2020.


Although these numbers are used to estimate the number of persons eligible for specific programs, the federal government does not provide estimates on the number of people living below the HHS poverty limits.

Creating a More Accurate Poverty Measure

The official poverty metric, according to most researchers, politicians, and those who study poverty, is flawed. 

The official poverty line is calculated using a family’s pretax cash income and excludes non-monetary benefits such as housing subsidies and the Supplemental Nutrition Assistance Program.


The official poverty metric, according to most researchers, politicians, and those who study poverty, is flawed. 

The official poverty line is calculated using a family’s pre-tax cash income and excludes non-monetary benefits such as housing subsidies, the Supplemental Nutrition Assistance Program (SNAP), and other government assistance. 


Housing, clothing, transportation, and other things that are typically regarded fundamental human requirements are not taken into account. 


Furthermore, the official metric does not take into account regional variances in the cost of living.

To remedy the limitations of the official poverty measure, the Census Bureau collaborated with the Office of Management and Budget to create the Supplemental Poverty Measure (SPM) in 2010. 

The SPM has two parts, much like the official measure: 

the cheapest option


To remedy the limitations of the official poverty measure, the Census Bureau collaborated with the Office of Management and Budget to create the Supplemental Poverty Measure (SPM) in 2010. 

The SPM has two components, similar to the official measure: the minimum cost of basic needs (expense) and the income that a family makes (financial resources). 


However, the SPM takes into account non-cash transfers such as SNAP assistance and tax credits, as well as medical, child care, tax, and food expenses, as well as geographic cost-of-living disparities and whether a family rents or owns a home. 


The SPM also includes a bigger population; for example, the definition of family has been broadened to include unmarried couples and their children, as well as unrelated children under the age of 15 and foster children.

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