People and Their Money - Income And Poverty

Poverty is — at least superficially — the absence of an adequate income for basic necessities. In the last 30 years or so, about 9% of all families lived in poverty when the economy was in high gear, about 12% when the economy was recovering from recession. As the graphic shows, poor families with a husband and wife both present had a much lower rate of poverty than all families.

Poverty is defined officially by the government. Poverty thresholds are complicated — showing different rates depending on the family unit's composition. The table beginning on the next page shows the rates as defined in 2001 and published by the U.S. Bureau of the Census.

A single individual 65 years old and over was thought to be poor if his or her income was $8,494 a year or lower. A family unit consisting of an adult and seven children under 18 years of age was considered poor if it had income of $35,610 or lower. A family of four, with two children under 18, was poor if it had an income of $17,960 or lower.

Critics sometimes say that poverty is overstated because the dollar figures shown below do not include in-kind assistance like housing subsidies or food stamps. But any reasonable person contemplating the table on the next page will probably conclude that living on incomes such as those shown below, with or without "in-kind" assistance, is likely to be tough at best.

Poverty Thresholds 2001 - in Dollars

	Related children under 18 years
Size of family unit	None	One	Two	Three	Four	Five	Six	Seven	8 or more
One person
Under 65 years	9,214
65 years and over	8,494
Two persons:
Householder under 65 years	11,859	12,207
Householder 65 years and over	10,705	12,161
Three persons	13,853	14,255	14,269
Four persons	18,267	18,566	17,960	18,022
Five persons	22,029	22,349	21,665	21,135	20,812
Six persons	25,337	25,438	24,914	24,411	23,664	23,221
Seven persons	29,154	29,336	28,708	28,271	27,456	26,505	25,462
Eight persons	32,606	32,894	32,302	31,783	31,047	30,112	29,140	28,893
Nine persons or more	39,223	39,413	38,889	38,449	37,726	36,732	35,833	35,610	34,238

There were 72.4 million families in 2000. Of these 6.2 million were poor. In Census terminology, families and households are not the same thing. Data shown in earlier panels feature households. A family is a grouping of two or more related individuals living together, one of whom is the "householder." There were 106.4 million households in 2000. A household is simply a living unit and may be inhabited by one individual or two or more related or unrelated individuals. The 34 million difference between the two figures is made up of people living alone or with friends or a domestic partner.

Poverty rates are shown here by way of giving definition to the income problems of the lowest fifth of households, which had an average income of $10,190 in 2000. Only households made up of a single person under 65 would be ranked above the poverty threshold with the average income of the lowest quintile of households.

Source: U.S. Bureau of the Census, March Current Population Survey, "Poverty Status: Status of Families, by Type of Family, Presence of Children, Race, and Hispanic Origin: 1959-2000," February 13, 2002, accessed at http://www.w3.org/TR/REC-html40/loose.dtd.