Evan Soltas
Jun 23, 2012

Poor and Getting Poorer

I was stunned by yesterday's loudly supportive response to my post on extreme poverty, so I've decided to stick with these issues for a little while. I think they merit more attention.

Finding #2: The mean real income of Americans below the federal poverty threshold is at a historical low, $5957 in 2010, after stagnating since the 1980s.

It is important to explain here that the Census determines the threshold by calculating the minimum income needed for a minimally adequate standard of living, not in comparison to the income distribution -- poverty here is absolute, not relative -- and so the drop in incomes of the poor means that they can provide a lesser and lesser fraction of the goods and services seen as necessary for themselves and/or their families.The current level represents a 4.1 percent drop since 2000. More disturbingly, the mean individual below the federal poverty threshold makes 13.3 percent less in real terms than what he or she did in 1976.

The poor haven't felt any sort of rising tide lifting all boats, so to speak. Instead, they are the worst off they've been in decades.

The Census' data set doesn't go back any further back. I arrived at this result using trapezoidal Riemann sums and the data which shows what percentage of Americans fall into several intervals defined relative to the federal poverty threshold, then multiplying by the actual threshold and dividing by the CPI.