	Trends in Poverty1

In 2013, the official U.S. poverty rate was 14.5%, compared to 15.0% in 2012, and marked the first statistically significant drop in the rate since 2006. In 2013, 45.3 million persons were estimated as having income below the official poverty line, a number statistically unchanged from the estimated 46.5 million poor in 2012. A strong economy during most of the 1990s is generally credited with the declines in poverty that occurred over the latter half of that decade, resulting in a record-tying, historic low poverty rate of 11.3% in 2000 (a rate statistically tied with the previous lowest recorded rate of 11.1% in 1973). The 2013 child poverty rate is still well above its pre-recession low of 16.9% (2006). Thus, the poverty line reflects a measure of economic need based on living standards that prevailed in the mid-1950s. The Census Bureau, in partnership with the Bureau of Labor Statistics (BLS), has recently released a Supplemental Poverty Measure (SPM), designed to address many of the perceived flaws of the "official" measure. Their estimated poverty rate fell from 21.3% in 2012, to 19.5% in 2013. Measured by a slightly raised poverty standard (125% of the poverty threshold), 15.1% of the aged could be considered poor or " near poor " in 2013; 12.6% who are ages 65 to 74, and 18.4% who are 75 years of age and over, could be considered poor or "near poor." Since 2007, state poverty rates have generally increased consequent to the 18-month recession (December 2007 to June 2009). As its name implies, the SPM is intended to "supplement," rather than replace, the "official" poverty measure. The "official" Census Bureau statistical measure of poverty will continue to be used by programs that allocate funds to states or other jurisdictions on the basis of poverty, and the Department of Health and Human Services (HHS) will continue to derive Poverty Income Guidelines from the "official" Census Bureau measure. The NAS panel issued a wide range of specific recommendations to develop an improved statistical measure of poverty in its 1995 report M easuring Poverty: A New Approach . Criticisms of the "official" poverty measure raised by the NAS expert panel include the following:
The "official" poverty measure, by counting only families' total cash, pre-tax income as a resource in determining poverty status, ignores a host of government programs and policies that affect the disposable income families may actually have available. Except for minor technical changes and adjustments for price inflation, poverty income thresholds have essentially been frozen in time, reflecting living standards of a half-century ago. Resources and Expenses Included in the SPM

As discussed earlier, the "official" poverty measure is based on counting families' and unrelated individuals' pre-tax cash income against poverty thresholds that vary by family size and composition. The SPM resource measure includes the value of a number of federal in-kind benefits, such as Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamp) benefits; free and reduced-price school lunches; nutrition assistance for women, infants, and children (WIC); federal housing assistance; and energy assistance under the Low Income Home Energy Assistance Program (LIHEAP). It also includes federal tax benefits administered by the Internal Revenue Service, such as the Earned Income Tax Credit (EITC) and the partially refundable portion of the Child Tax Credit (CTC), known as the Additional Child Tax Credit (ACTC). The figures show the magnitude of the difference among the 13 states and the District of Columbia that had statistically significant higher poverty rates under the SPM than under the "official" measure, as well as for the 26 states in which the state's SPM rate was lower than its "official" poverty rate and the 11 states in which the incidence of poverty under the two measures did not differ statistically. Appendix A. U.S.
In 2013, 45.3 million people were counted as poor in the United States under the official poverty measure—a number statistically unchanged from the 46.5 million people estimated as poor in 2012. The poverty rate, or percent of the population considered poor under the official definition, was reported at 14.5% in 2013, a statistically significant drop from the estimated 15.0% in 2012. Poverty in the United States increased markedly over the 2007-2010 period, in tandem with the economic recession (officially marked as running from December 2007 to June 2009), and remained unchanged at a post-recession high for three years (15.1% in 2010, and 15.0% in both 2011 and 2012). The 2013 poverty rate of 14.5% remains above a 2006 pre-recession low of 12.3%, and well above an historic low rate of 11.3% attained in 2000 (a rate statistically tied with a previous low of 11.1% in 1973).
The incidence of poverty varies widely across the population according to age, education, labor force attachment, family living arrangements, and area of residence, among other factors. Under the official poverty definition, an average family of four was considered poor in 2013 if its pre-tax cash income for the year was below $23,834.
The measure of poverty currently in use was developed some 50 years ago, and was adopted as the "official" U.S. statistical measure of poverty in 1969. Except for minor technical changes, and adjustments for price changes in the economy, the "poverty line" (i.e., the income thresholds by which families or individuals with incomes that fall below are deemed to be poor) is the same as that developed nearly a half century ago, reflecting a notion of economic need based on living standards that prevailed in the mid-1950s.
Moreover, poverty as it is currently measured only counts families' and individuals' pre-tax money income against the poverty line in determining whether or not they are poor. In-kind benefits, such as benefits under the Supplemental Nutrition Assistance Program (SNAP, formerly named the Food Stamp program) and housing assistance, are not accounted for under the "official" poverty definition, nor are the effects of taxes or tax credits, such as the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC). In this sense, the "official" measure fails to capture the effects of a variety of programs and policies specifically designed to address income poverty.
A congressionally commissioned study conducted by a National Academy of Sciences (NAS) panel of experts recommended, some 20 years ago, that a new U.S. poverty measure be developed, offering a number of specific recommendations. The Census Bureau, in partnership with the Bureau of Labor Statistics (BLS), has developed a Supplemental Poverty Measure (SPM) designed to implement many of the NAS panel recommendations. The SPM is to be considered a "research" measure, to supplement the "official" poverty measure. Guided by new research, the Census Bureau and BLS intend to improve the SPM over time. The "official" statistical poverty measure will continue to be used by programs that use it as the basis for allocating funds under formula and matching grant programs. The Department of Health and Human Services (HHS) will continue to issue poverty income guidelines derived from "official" Census Bureau poverty thresholds. HHS poverty guidelines are used in determining individual and family income eligibility under a number of federal and state programs. Estimates from the SPM differ from the "official" poverty measure and are presented in a final section of this report.