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Unpacking the Government’s Latest Report on Income and Poverty
Every year, the Census Bureau releases reports on income and poverty in the United States: the Official Poverty Measure (OPM) and the Supplemental Poverty Measure (SPM). These reports tell important parts of the story about the country’s economic health and upward mobility for average Americans.
The country’s median household income in 2018 was $63,179, which did not represent a substantive change from 2017. The number of full-time, year-round workers increased by 2.3 million from 2017 to 2018, with about 700,000 men and 1.6 million women joining the workforce.
As the number of people entering the workforce rose, the overall poverty rate, according to the OPM, declined to 11.8%. This marked the lowest poverty rate since the 2008 recession. Turning percentages into people, there were 38.1 million people in poverty in 2018, which was 1.4 million fewer than in 2017.
The SPM provides a slightly different way to measure poverty by taking into account individuals and families who receive government assistance. The SPM measured the overall poverty rate at 12.8%, which was similar to 2017.
Social Security is the most common form of government assistance and moves an estimated 27.2 million people above the poverty line each year. Annual tax credits lifted another 8.9 million people out of poverty, according to the SPM.
Behind the Numbers
What do the OPM and the SPM really say about poverty in the United States? The American Enterprise Institute offered further analysis of the findings and their shortcomings in a recent report.
One big problem with the OPM and SPM, the group argues, is that the government’s poverty income threshold, more commonly known as the poverty line, has not really changed since the 1960s when adjusted for inflation. This means that there are likely far more families struggling to make ends meet than what the government’s calculations suggest, particularly in areas with a high cost of living.
Median income and poverty rates also vary significantly by race. The median income for African American households in 2018 was $41,361, compared to $70,642 for white households. Poverty rates were also higher for African American and Hispanic individuals and families, at 21.7% and 18.3% compared to 10.5% for white households.
In December, changes to the Supplemental Nutrition Assistance Program (SNAP) went into effect requiring that able-bodied working-age adults in the program complete work requirements to receive assistance. Advocates against the changes argued that the SPM data on the power of government assistance to lift people out of poverty was proof that the services should not be restricted or limited.
“Such gains can demonstrably be reversed by policies hostile to them. It is thus extremely worrisome to consider the actions the Trump administration is taking to reduce government support of poor households, especially those with immigrants,” Jacob Bernstein of the Center on Budget and Policy Priorities told NPR.
The OPM and SPM reports for 2019 will be released by the Census Bureau in September, just in time for the next presidential election. Expect candidates from both parties to use the numbers to justify their economic policy ideas on the campaign trail.
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