November 6, 2013
The number of poor people in America is 3 million higher than the official count, encompassing 1 in 6 residents due to out-of-pocket medical costs and work-related expenses, according to a revised census measure released Wednesday.
The new measure is aimed at providing a fuller picture of poverty but does not replace the official government numbers. Put in place two years ago by the Obama administration, it generally is considered more reliable by social scientists because it factors in living expenses as well as the effects of government aid, such as food stamps and tax credits.
Administration officials have declined to say whether the new measure eventually could replace the official poverty formula, which is used to allocate federal dollars to states and localities and to determine eligibility for safety-net programs such as Medicaid.
Congress would have to agree to adopt the new measure, which generally would result in a higher poverty rate from year to year and thus higher government payouts for aid programs.
Based on the revised formula, the number of poor people in 2012 was 49.7 million, or 16 percent. That exceeds the record 46.5 million, or 15 percent, that was officially reported in September.
The latest numbers come as more working-age adults picked up low-wage jobs in the slowly improving economy but still struggled to pay living expenses. Americans 65 and older had the largest increases in poverty under the revised formula, from 9.1 percent to 14.8 percent, because of medical expenses such as Medicare premiums, deductibles and other costs not accounted for in the official rate.
There also were increases for Hispanics and Asian-Americans, partly due to lower participation among immigrants and non-English speakers in government aid programs such as housing aid and food stamps.
African-Americans and children, helped by government benefits, had declines in poverty compared with the official rate.
“This is a real incongruity, when 1 in 6 people face economic insecurity here in the richest country in the world,” said Joseph Stiglitz, a Columbia University economist and former chairman of the White House Council of Economic Advisers who has argued for more government action to alleviate income inequality.