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Census Bureau Poverty Rate Drastically Undercounts Severity of Poverty in America

September 18th, 2010 | Filed under Economy, Feature, Hot List, News, Politics & Government . Follow comments through RSS 2.0 feed. Click here to comment, or trackback.

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By David DeGraw, AmpedStatus Report

Census Bureau Poverty Rate Drastically Undercounts Severity of Poverty in AmericaWhile the shocking new poverty statistics from the Census Bureau indicating that a record 43.6 million Americans lived in poverty in 2009 emphatically demonstrates the severity of the economic crisis, the Census is drastically undercounting this demographic. Apparently government poverty statistics are as accurate as their unemployment statistics.

I have read many reports that simply restate what the government has said without questioning the fact that the metrics they use to calculate poverty are extremely outdated.

News reports are out saying that in 2009 the poverty rate “skyrocketed” to 43.6 million – up from 39.8 million in 2008, which is the largest year-to-year increase, and the highest number since statistics have been recorded – putting the poverty rate for 2009 at 14.3 percent. This is obviously a tragedy and horrific news. However, this is blatant propaganda.

Let’s revisit the 2008 Census total stating that 39.8 million Americans lived in poverty. It turns out that the National Academy of Science did its own study and found that 47.4 million Americans actually lived in poverty in 2008. The Census missed 7.6 million Americans living in poverty that year.

How did that happen? The Census Bureau uses a long outdated method to calculate the poverty rate. The Census is measuring poverty based on costs of living metrics established back in 1955 – 55 years ago! They ignore many key factors, such as the increased costs of medical care, child care, education, transportation, and many other basic costs of living. They also don’t factor geographically-based costs of living. For example, try finding a place to live in New York that costs the same as a place in Florida.

So the Census poverty rate increase of 3.8 million people will put the 2009 National Academy of Science (NAS) number at a minimum of 51.2 million Americans. And if the margin of discrepancy is equivalent to the 7.6 million of 2008, we are looking at a NAS number of at least 52 million people for 2009.

Let’s also consider the fact that more than 20 million people were on unemployment benefits last year. A Center on Budget and Policy Priorities analysis concluded that unemployment insurance temporarily kept 3.3 million people out of poverty. Food stamp assistance kept another 2.3 million people out of poverty. On top of that, an additional 2.3 million people in prison were not counted in the poverty rate. Add up these numbers and we are looking at 60 million Americans living in poverty. Which means the government number glosses over 16.4 million Americans in poverty.

Now let’s look at the poverty line that these numbers are based on: $22,050 for a family of four. Let me repeat that: $22,050 for a family of four. That breaks down to $5513 per person, per year. I don’t know about you, but I can’t imagine living in the United States on $459 per month. That amount will barely get you a good health insurance policy, never mind food, clothes and a roof over your head. No wonder why a record 50.7 million Americans do not have health insurance. (Beware: 50.7 million Americans without health insurance is a government-based number. If you had health insurance for only one day last year, you are not counted in this total.)

Clearly, the Census is setting the income level for their poverty measurement extremely low, and if you increase that measure by just a small increment, to $25,000 for a family of four, you are now looking at nearly 100 million Americans in poverty.

Let’s also consider the staggering amount of Americans – 52 million, roughly 17% of the population – who are currently enrolled in “anti-poverty” programs. Over 50 million are on Medicaid, 41 million are on food stamps, 10 million are on unemployment, 4.4 million receive welfare. Not counted in this “anti-poverty” total are 30 million children enrolled in the National School Lunch Program. Another metric: if it wasn’t for Social Security – note to deficit hawks – 20 million more would be added to the poverty total.

The effect of people moving in with family members instead of living on their own has further masked the severity of the poverty crisis. Foreclosures, unemployment, increased cost of education and health insurance have led the average household to grow in size. As Patrick Martin reports:

“The number of multifamily households increased by 11.6 percent from 2008 to 2010, and the proportion of adults 25-34 living with their parents rose from 12.7 percent in 2008 to 13.4 percent in 2010. The poverty rate for these young adults was 8.5 percent when they were considered part of their parents’ household, but would have been 43 percent if they had been living on their own.”

This trend is currently increasing. Although it is terribly under-reported, foreclosure rates continue to rise. We just experienced the worst month of foreclosures in history; the generation just graduating from college is carrying record levels of student-loan debt, and they are being forced into much lower income levels than anticipated, if they can even find employment.

Another glaring factor clouding our view of poverty in America is that the Census does not calculate a person’s assets and liabilities. Considering the massive debts most Americans are carrying, this would make the poverty rate explode. Stephen Crawford and Shawn Fremstad from Reuters concisely summed up this point:

“As Nobel laureates Joseph Stiglitz and Amartya Sen, along with economist Jean-Paul Fitoussi, write in their new book Mis-measuring Our Lives, ‘Income and consumption are crucial for assessing living standards, but in the end they can only be gauged in conjunction with information on wealth.’ This point is just as relevant to poverty measurement as it is to other measures of living standards.

To understand why this is the case, consider two families: one had an income that puts them a few thousand dollars below the poverty line, which was $22,050 for a family of four in 2009; the other has an income a few thousand dollars above the line. Looking only at income, the first family is worse off than the second.

Now add what the family owns and owes into the mix. Let’s say the first family has substantial net equity in its home and moderate liquid savings for a ‘rainy day,’ while the latter has no liquid savings or, as is becoming too common these days, has liabilities that dwarf their assets such as an ‘underwater’ mortgage. Using this more comprehensive method, the latter family, despite a modestly higher income, is actually the poorer one.”

In my analysis, a key metric to judge the overall economic security and hardship level of a country is the percentage of the population living paycheck to paycheck. Anyone who lives paycheck to paycheck can tell you about the stress and psychological impact it has on you when you know your family is one sickness, injury or downsizing away from economic ruin. The employment company CareerBuilder, in partnership with Harris Interactive, conducts an annual survey to determine the percentage of Americans currently living paycheck to paycheck. In 2007, 43 percent fell into this category. In 2008, the number increased to 49 percent. In 2009, the number skyrocketed up to 61 percent.

In their most recent survey, this number exploded to a mind-shattering 77 percent. Yes, 77 percent of Americans are now living paycheck to paycheck. This means in our nation of 310 million citizens, 239 million Americans are one setback away from economic ruin.

So when I hear the government and media tell me that 43.6 million Americans lived in poverty in 2009, while that is horrifying enough, I get extraordinarily frustrated knowing that even that sad statistic is putting a major positive spin on this economic disaster that is still far from over. While the economic top half of one percent now fears a “double-dip,” the overwhelming majority of Americans are still in the same downward spiral they’ve been on.

For one last missing piece to this equation, corporate profits are soaring while all this is devastation is occurring. Despite this economic crisis, it’s not like our country doesn’t have the money. A recent study done by Capgemini and Merrill Lynch Wealth Management found that a mere one percent of Americans are hoarding $13 TRILLION in “investible wealth.” Yep, one percent of Americans are hoarding $13 TRILLION in “investible wealth,” and that doesn’t even factor in all the money they have hidden in offshore accounts.

As famed American philosopher John Dewey once said, “There is no such thing as the liberty or effective power of an individual, group, or class, except in relation to the liberties, the effective powers, of other individuals, groups or classes.”

The United States now has the highest inequality of wealth in our nation’s history. Tens of millions of Americans are stressing out wondering how they are going to keep their bills paid, and the people who caused this crisis are rolling around in $13 TRILLION. The Robber Barons have been displaced as America’s most despotic and depraved ruling class.

Sing it with me:

“America! America!
God shed his grace on thee,
And crown thy good with brotherhood
From sea to… shining sea! …

America! America!
God mend thine ev’ry flaw,
Confirm thy soul in self-control,
Thy liberty in law! …”

Psst… WAKE UP. The American Dream is over. While you were sleeping we got robbed!

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  1. Joost said:

    I was thinking about the new Census numbers and recalled your reports months back saying that 50 million in the States lived in destitution. The NAS study is even an undercount, as they do not account for liabilities either. Governments twist numbers to save face all the time. The fact that the media just propagate those numbers is the bigger issue.

    Spot on work as always mate.

  2. Ben said:

    Ha! Awesome Dave. The Emperor is stripped naked.

  3. Erica said:

    These numbers paint a scary, scary picture. If the government and media told us the truth about all of this the government might have to actually do something to address it. They are going to let us crash and burn. The American empire is collasping and the gov and media are playing the fiddle.

  4. Hank said:

    This is an absolute disgrace. What the hell kind of a country do we live in? These bastards on Wall Street and their puppets in Washington should be put in jail for life. The Robber Barons were girl scouts compared to this. What kind of person sits around with billions in their bank account while this many people suffer like this. Where is their humanity? Where is their religion? They will burn in hell. There’s a special place reserved in hell for them.

  5. Matt said:

    David,

    You are one intensely brilliant mother f@#ker! You don’t miss a trick and you strike to the heart of power with brutal blows. you are a f@#king dragon slayer.

  6. Janis said:

    WOW. America, America! God help us! We are in baaaaaad shape.

  7. Janis said:

    Also want to add that this report made me cry and then laugh my ass off listening to Elvis rock us to sleep while the banksters robbed the place :-)

  8. jartco said:

    fight back-hit them where it hurts the most-the pocketbook.cancel pay t.v.stop going to movies.boycott pro sports.it’s absolutely ridiculous when alex rodriquez makes more money every time he comes up to bat than the average family makes in a year.imagine what these owners are making.eat out only at resturaunts where the owner works there..these are a few suggestions.we need to start somewhere ..also we need to end wars,stop giving to israel.how do we give aid all over the world while our own suffer?i know there are always strings attatched.i don’t think our leaders have any decency(maybe kucinich,sanders,kaptur,and a couple of others)left.what a corrupt country we have become

  9. Census Bureau Poverty Rate Drastically Undercounts Severity of Poverty in America…

    While the shocking new poverty statistics from the Census Bureau indicating that a record 43.6 million Americans lived in poverty in 2009 emphatically demonstrates the severity of the economic crisis, the Census is drastically undercounting this demogr…

  10. indeed said:

    If I were a rich idiot (ha!ha!), I would hit the streets and start giving jobs away (NOT to the fraud of “nonprofits”). But instead they are whining about a 2% increase in their taxes!
    Are these ugly people so flippin’ daft that they don’t know the pain they are causing? Remember about a year ago when the doctors were whining about making a quarter of a million/yr? How’re those “free” drugs workin’ for you?

  11. Gil said:

    Just came here from Max Keiser’s site. Great report. David you are always an awesome guest on Max’s show. Come back on again soon!

  12. Tracy said:

    EXCELLENT WORK! Thanks Dave

  13. Steve said:

    Repeat after me… ‘I am part of the problem because I thought I could get away with doing what I want, when I want, and expect a free lunch at everyone else’s expense’. America has made the greatest transformation in history from a society where it’s citizens felt a deep responsibility to pay their own way, limit personal debt, and act in morally responsible ways, to one where the credit card, free sex and ‘having a good time’ are the only things that matter.

    People this is what happens when self-centred atheism becomes the national morality.

    The top half of one percent couldn’t get away with this if common sense and a sense of moral consciousness was mainstream in the USA. They aren’t.

  14. Kaboom said:

    David DG, I blame Global Warming for poverty.

    As soon as we can restrict and remove atmospheric carbon, the sooner we all can live to our fullest potential.

  15. John said:

    Bite the bullet America. Action No 1. The legal system promotes (for their own profit)the belief that no one is responsible for the consequences of their actions. Solution: cap liitigation claims. WE ARE responsiible for our deciisions and outcomes. Action No 2. Stop trying to solve the problems of the human race. They/ we over breed, you feed them, they breed more. They fight amongst themselves and at great cost to the USA, we get involved. THEY are responsible, and trying to deny people the consequences of their irrationality will never help them develop to a saner way. Yes, you’ll get the guilt trips laid on you for not coming to the rescue — but ask! has it worked? Is there less poverty? does the world love the Americans more? Maybe Europe from Hitler, and Australia from the Japs, yes — but the ingrates outnumber. Think about it. So – curb Wall St., curb the Lawyers and mind our own business!
    Blessings on the USA.

  16. [...] Census Bureau Poverty Rate Drastically Undercounts Severity of Poverty in America [...]

  17. [...] blogger David DeGraw will be here to tell us why the latest statistics on poverty and unemployment in the U.S. are [...]

  18. [...] in preventing people from resorting to extreme measures. Currently, a stunning number of Americans, 52 million, are receiving life-sustaining assistance from government “anti-poverty” programs, such [...]

  19. bull said:

    My country shat on thee,

    lost land of liberty, of thee I sting;
    land where politicians lied ,
    land where the people died ,
    from every bureaucracy thy tyranny ring!

    My native country, thee,
    land of the perpetual fleece, thy push turns to shove;
    thy love thy stocks and trills,
    thy banks and pompous shills;
    Your heart with malice chills, like that above.

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    Power is god, to thee,
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    with greed and incorrigible might;
    and no protection from your smite, you corrupt everything.

  20. [...] in preventing people from resorting to extreme measures. Currently, a stunning number of Americans, 52 million, are receiving life-sustaining assistance from government “anti-poverty” programs, such as [...]

  21. [...] hardcore survivalists who will insist that we’re in a depression; they will remind you that 52 million Americans are in government “anti-poverty” programs that include food stamps, unemployment benefits, [...]

  22. [...] an article that has a pretty good breakdown on the poverty [...]

  23. [...] You Know:  Currently, a stunning number of Americans, 52 million, are receiving life-sustaining assistance from government “anti-poverty” programs, such as food [...]

  24. [...] and sites I landed on an analysis that suits my purpose here… David DeGraw’s blog at AmpedStatus  and while I haven’t validated all of his figures, he makes the point — actually the [...]

  25. consultmlcesq said:

    This Census was specifically designed by the GOP under Bush’s watch to identify racial and cultural indicia moreso than anything else. The key objective was to make it easy to identify the leanings of potential voters, so that the re-drawing of distric lines for U.S. and state representatives could be done in such a way as to increase the GOP voting blovck. Poverty in American was not an issue.

  26. consultmlcesq said:

    Correction: “This Census was specifically designed by the GOP under Bush’s watch to identify racial and cultural indicia moreso than anything else. The key objective was to make it easy to identify the leanings of potential voters, so that the re-drawing of district lines for U.S. and state representatives could be done in such a way as to increase the GOP voting block. Poverty in American was not an issue.

  27. [...] September, I linked to a story discussing the fact that the poverty statistics released by the Census were, to be blunt, incorrect. The story pointed out that people horrified by the poverty rate disclosed in the Census numbers [...]

  28. [...] Census Bureau Poverty Rate Drastically Undercounts Severity of Poverty in America [...]

  29. [...] and will cause hyperinflation on most basic necessities. This is happening at a time when we have a record 52 million Americans living in poverty, 42.4 million on food stamps and 77 percent of the population now [...]

  30. Roe said:

    End lobbying now-only the voice of the people should be heard in the peoples republic.

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  32. [...] Census Bureau Poverty Rate Drastically Undercounts Severity of Poverty in America [...]

  33. [...] increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008 National Academy of Science findings, I estimated that the number of [...]

  34. [...] increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008 National Academy of Science findings, I estimated that the number of [...]

  35. [...] of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008 National Academy of Science findings, I estimated that the number [...]

  36. [...] of four million people since 2008, it significantly under-counted the total. Last year, in my analysis [20], extrapolating data from 2008 National Academy of Science findings, I estimated that the [...]

  37. [...] increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis [20], extrapolating data from 2008 National Academy of Science findings, I estimated that the [...]

  38. [...] increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008 National Academy of Science findings, I estimated that the number of [...]

  39. [...] increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis [20], extrapolating data from 2008 National Academy of Science findings, I estimated that the [...]

  40. [...] of four million people since 2008, it significantly under-counted the total. Last year, in my analysis [20], extrapolating data from 2008National Academy of Science findings, I estimated that the [...]

  41. [...] shows that 52,765,000 Americans, 17.3% of the population, lived in poverty in 2009. Last year, in my analysis, extrapolating data from 2008 National Academy of Science findings, I estimated that the number of [...]

  42. [...] increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis [20], extrapolating data from 2008 National Academy of Science findings, I estimated that the [...]

  43. [...] increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis [20], extrapolating data from 2008 National Academy of Science findings, I estimated that the [...]

  44. [...] Census Bureau Poverty Rate Drastically Undercounts Severity of Poverty in America [...]

  45. [...] of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008National Academy of Science findings, I estimated that the number of [...]

  46. [...] people. For the year of 2009, the Census reported that 43.6 million Americans lived in poverty. In my analysis, extrapolating data from 2008 NAS measurement, I estimated that the number of Americans living in [...]

  47. [...] increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008 National Academy of Science findings, I estimated that the number of [...]

  48. [...] of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008National Academy of Sciencefindings, I estimated that the number of [...]

  49. [...] shows that 52,765,000 Americans, 17.3% of the population, lived in poverty in 2009. Last year, in my analysis, extrapolating data from 2008 National Academy of Science findings, I estimated that the number of [...]

  50. [...] in poverty will increase to 105 million using the National Academy of Science data. Last year, in my analysis, extrapolating data from 2008 National Academy of Science findings, I estimated that the number [...]

  51. [...] of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008 National Academy of Sciencefindings, I estimated that the number of [...]

  52. [...] Science released their latest findings that the number of Americans living in poverty in 2009 was at least 52 million, the highest level in history.Currently, an all-time record 6.3 million people have been [...]

  53. [...] of four million people since 2008, it significantly under-counted the total. Last year, in my analysis [20], extrapolating data from 2008 National Academy of Science findings, I estimated that the [...]

  54. [...] of four million people since 2008, it significantly under-counted the total. Last year, in my analysis [20], extrapolating data from 2008 National Academy of Science findings, I estimated that the [...]

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