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One-Third of Americans at or Near Poverty

By Matt Bruenig, Demos

21 October 14

ome people think of poor people as a small, especially degenerate class of people. I and others have tried to push back against this understanding by pointing out, among other things, that 60% of poor people are children, elderly, disabled, or students, that poverty rates differ significantly across the life cycle (with the oldest, non-elderly workers having about half the poverty rate of the youngest), and that the ranks of the poor are much more fluid than many imagine. In this post, I raise another issue with this understanding, which is that it puts too much weight on the poverty line and ignores the number of people who are near poverty but not in it.

The poverty line, which is defined in dollar terms, is a useful construct, but also a limited one. A person who is $1 below the poverty line is not that much worse off than a person who is $1 above it, $2 above it, or $3 above it. The poverty line and the poverty rate that goes along with it makes it easy for people to conceptualize the poor as a standalone bucket of people. But, in fact, many of the poor are essentially indistinguishable from a much larger mass of people who do not find themselves in the poverty bucket.

For example, the supplemental poverty data that was released last week showed 15.5% of people (49 million people in total) to be below the poverty line. This is a small enough group that you could maybe cast them off as especially bad or inferior or whatever. But sitting just above the poverty line is another 53 million people who aren't in poverty but are near it. That is to say, 32.5% of Americans are below 150% of the poverty line, a total of 102 million people (the same figure under the official poverty metric is 24.3%). If the poor are an especially bad underclass of people, who are the 53 million people who are in their midsts but not quite poor? Is it really the case that a rotating class of one in three Americans is full of mainly garbage human beings? It seems unlikely.

The 150% of the poverty line figure is also, in a sense, arbitrary. It also involves picking some income line and putting everyone beneath it in a bucket. But the income distribution, especially at the bottom, moves up at a fairly gradual (as opposed to punctuated) clip. When you look at the entire income distribution rather than picking lines, there is never any especially large gap that demarcates the poor from the rest. It's a sliding scale all the way up. So where on that sliding scale would you say the bad people end and the good people begin? Which are the people who need Paul Ryan's life coaches and which are the people who don't?

(Note: In this graph, 100 refers to the the poverty line, 150 refers to 150% of the poverty line and so on. As you can see, nearly half of Americans are within 200% of the poverty line under the supplemental poverty measure.)