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How Poverty is Measured

According to the National Poverty Center, the United States determines the official poverty rate using poverty thresholds that are issued each year by the Census Bureau.  There are two slightly different versions of the federal poverty measure:  the poverty thresholds, and the poverty guidelines.  The poverty thresholds are the original version of the federal poverty measure. They are updated each year by the Census Bureau (although they were originally developed by Mollie Orshansky of the Social Security Administration). The thresholds are used mainly for statistical purposes — for instance, preparing estimates of the number of Americans in poverty each year. (In other words, all official poverty population figures are calculated using the poverty thresholds, not the guidelines.) The poverty guidelines are the other version of the federal poverty measure. They are issued each year in the Federal Register by the Department of Health and Human Services (HHS). The guidelines are a simplification of the poverty thresholds for use for administrative purposes — for instance, determining financial eligibility for certain federal programs.

The 2013 Poverty Guidelines for the
48 Contiguous States and the District of Columbia
Persons in family
Poverty guideline
For families with more than 8 persons, add $4,020 for each additional person.

U.S. Department of Health & Human Services

Causes of Poverty
In 1900, 40% of all Americans lived in poverty. One of the first definitions of poverty was from Robert Hunter, who in his 1904 book titled Poverty, stated that a family living with an annual income of $460 and living in the North was considered poor. In the South, the same family would have to live with an annual income of $300 to be considered poor.

In 1963, when Lyndon Johnson assumed Presidency from John Kennedy, Johnson took the lead in forming a new policy to combat poverty. Soon his Economic Opportunity Act passed and an official War on Poverty began. By 1967, there were more than 1,000 community action agencies created by the Executive branch.

The official poverty rate in 2006 was 12.3 percent, down from 12.6 percent in 2005. It is impossible to determine the exact number of people living in poverty through the years because it was not officially measured until the 1960's. It is difficult to determine how exactly someone gets at or below the poverty level. Sometimes the cause of poverty is under the persons control and sometimes it is beyond a person’s power. Each case of poverty is different. The circumstances leading to and causes of poverty vary. It is impossible to list the multitude of reasons that might have led one to be classified as poor. Still, it is possible to pinpoint the three general causes of poverty: education, family life/family influence, and the business cycle.

Lack of or inadequate education causes poverty. Without an education, be it a high school diploma, GED, bachelor’s degree or technical education, a decent paying job is difficult to obtain. Education, or the lack thereof, is directly related to the dollar amount a person stands to potentially earn. Children who don’t form their basic thinking skills before going to school often fall behind their peers. According to the U.S. Census Bureau, about 34% of unemployed people never received a high school diploma. However, only 6% of unemployed people have a bachelor’s degree.

Family Life/Family Influence
Family plays a large role in a person’s life as well. The traits and characteristics many people possess were passed onto them by family members. The economic status a person is born into often plays a tremendous role in how they will develop over time. Divorce or separation is one of the primary reasons people live in poverty. It is a fact that couples who divorce or separate are far more likely to face poverty than married couples. Children are shaped by the family they grow up in. All too often, individuals born into poverty find it extremely difficult to break the cycle and achieve economic self-sufficiency.

Business is the third reason many people are forced into poverty. The economy plays a significant role in the welfare of its citizens. Poverty rates have gone up and down over the years. The US economy has suffered 10 recessions since the end of World War II, the last of which spanned roughly from 2000-2003. When the country goes into a recession it affects everyone, no matter what their economic or education status is. While some aspects of the economy are improving, others are not.

The new social class of poverty is the working poor. Today, the working poor represent many new faces of poverty. They’re working one or two jobs, often hourly wages, and unable to make ends meet.

Household incomes are going down and the cost of living is going up. Other consequences of poverty include natural disaster, region, institutional racism, death of a family member, natural disaster, crime, substance abuse, domestic violence, clinical depression, disease, and poor work ethic.

Learn More About Poverty
U.S. Census Bureau
Poverty USA
Tour Poverty USA
State of Kentucky Community Data Profiles
Kentucky Health & Social Indicators, 2004

In Kentucky, Being Poor is Costly