Posted on October 22, 2009

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National Academy of Sciences Says One in Six Americans Living in Poverty

A revised formula for calculating medical costs shows that approximately 47.4 million Americans were living in poverty last year, seven million more than the government's official figure, the Associated Press reports.

The disparity is the result of differences in the formulas used by the Census Bureau and the National Academy of Science to calculate the poverty rate. Using the NAS formula, the rate was 15.8 percent, or nearly one in six Americans, compared to the 13.2 percent rate, or 39.8 million Americans, reported by the Census Bureau. Created in 1955, the formula used by the bureau does not factor in rising medical care, transportation, child care, geographical variations, or non-cash government aid.

Responding to requests from lawmakers and the Obama administration for a more complete range of numbers, the Census Bureau expedited the release of the revised figures, which found that 18.7 percent of Americans age 65 and older, or nearly 7.1 million people, are in poverty due to out-of-pocket expenses from rising Medicare premiums, deductibles, and coverage gaps in prescription coverage; that 14.3 percent of Americans between the ages of 18 and 64, or 27 million people, are facing economic challenges as a result of low income and rising transportation and child care costs; and that poverty rates have increased for non-Hispanic whites, Asians, and Hispanics while remaining flat for African Americans. In addition, NAS reported bigger jumps in poverty in the Northeast and West, largely because those regions boast high-cost-of-living cities such as New York, Boston, Los Angeles, and San Francisco.

According to Arloc Sherman, a senior researcher at the nonprofit Center on Budget and Policy Priorities, the revised formula could take on greater importance as more Americans qualify for tax credits and food stamps through the federal stimulus program. "Food stamp participation rose during the first year of recession," said Sherman, "and appears to have softened what could have been an even greater increase in financial hardship."

Yen, Hope. “Revised Formula Puts One in Six Americans in Poverty.” Associated Press 10/20/09.

Primary Subject: Public Affairs
Secondary Subject(s): Economic Crisis
Location(s): National

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