The federal poverty line does not tell the story of poverty in the United States

Data recently released by the Census Bureau shows that over 37 million people in America were living at or below the federal poverty line in 2020. This is 11.4% of the population, and one percentage point higher than in 2019.

But the federal poverty line is not starting to tell the story of poverty in the United States

Half of American families in difficulty make ends meet. They are part of what I call the “uncounted majority,” people who struggle to pay basic bills even though their incomes are not low enough to meet the official federal poverty line – currently. $ 26,200 for a family of four or $ 12,760 for an individual.

I have witnessed this struggle while researching low income communities for the past four years. In towns and villages from California to Kentucky, I have met hundreds of workers – from a mixture of races – whose real-life experiences highlight the arbitrariness and problems of the federal poverty line. .

People like Angel Perez, who lives in Oakland and has two part-time jobs for a local school district and helps his dad paint houses – and earns less than $ 16,000 a year. Perez considers himself lucky to be able to live with his father. Otherwise it would be one of the over 4,000 homeless people.

In Southeast Ohio, I often ran into people who had multiple jobs and always struggled to pay their bills. Michael Chase was one of them. Between jobs, he works 45 to 60 hours a week and brings home just under $ 16,000 a year. Neither job includes health insurance, sick leave, or vacation. He shares an apartment with three roommates – a situation he finds stressful – and still worries sometimes about paying rent.

Still, Chase doesn’t consider himself poor. Perhaps more importantly, neither does the government. In 2020, it was well above the federal poverty line for a single person.

At the waiting tables in eastern Kentucky, Jenna Terry earns a pre-tax income of about $ 20,000. She lives with her boyfriend, Doug, a car salesman who earns an extra $ 20,000. None of their employers offer sick leave, vacation or health insurance. The couple have a young daughter, and the $ 40,000 they earn together is almost double the federal poverty line for a family of three.

Despite this, they struggled to pay their monthly bills, which included a high interest car loan. To reliably cover basic expenses, Terry’s family would need an income of $ 53,818, according to the Institute for Economic Policy.

Low-wage workers get lost in the gap between economic self-sufficiency and the federal poverty line, which is calculated using an outdated equation that may never have made sense. It is determined by comparing pre-tax cash income to a threshold that is three times the expected cost of groceries, and then adjusted for family size.

In 2019, 53 million Americans, or 44% of the country’s workers aged 18 to 64 held low-wage jobs who paid a median annual salary of $ 18,000.

According to available census data, approximately 51% of workers earn less than $ 35,000 per year, which is only slightly above the federal poverty line for a family of four – and less than what they need to be able to afford a modest two-bedroom apartment. A recent poll found this, on average, a modest two-bedroom apartment with the average national market rent of $ 1,061 required an hourly wage of $ 20.40. This is an annual salary of $ 42,432.

Jobs with low wages, unreliable hours, and a lack of benefits dominate the American economic landscape for working people and their families. The pandemic has made this problem worse for low-wage workers whose work cannot be done remotely. In 2020, nearly 8 million low-wage workers lost their jobs, while others, such as those in the meat packing industries, have been declared “essential” and forced to work in dangerous conditions.

Economic distress has shaped the lives of millions of workers for decades. Without savings, people are forced to resort to high interest loans to cover ordinary but unforeseen expenses – car repairs, dental problems, illness. On an already insufficient budget, this creates a financial crisis that can push low-wage workers to take on more debt.

Since 2010, the federal government has released a “Supplementary Poverty Measure” that takes into account programs to help low-income families and individuals who are not included in the official poverty rate. This figure often increases the poverty rate, but in 2020 additional measures brought it down from 11.4% to 9.1%. The Census Bureau attributed the decline to the success of government stimulus payments intended to ease economic hardship caused by COVID-19. These payments are complete.

For one person, the low-wage workers I spoke with expected to work hard. But no one should expect to spend 60 hours a week working two jobs and still have trouble paying basic bills.

The federal poverty line must be adjusted to reflect reality – and be based on the real costs of housing, food, child care, health care, transportation and other necessities of daily life in various parts of the United States.

We need a measure that can account for the uncounted majority.

Celine-Marie Pascale is professor of sociology at American University in Washington, DC, and author of “Living on the Edge: When Hard Times Become a Way of Life”.

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