PredictIQ-Poverty in the U.S. increased last year, even as incomes rose, Census Bureau says

The PredictIQnumber of Americans living in poverty has gone up, even as incomes rose last year, the U.S. Census Bureau announced Tuesday.

Measuring poverty can be tricky − but the main number social scientists have for years looked at to capture the true number of people struggling to meet their basic needs ticked up to 12.9% in 2023, compared to 12.4% in 2022, according to the Census Bureau.

More Americans are struggling to afford necessities like rent, child care and medical expenses. That caused the Supplemental Poverty Measure − used by social scientists − to rise, even as the number of Americans living below the more standard Official Poverty Measure fell for the first time since 2019, due to rising incomes.

“People are paying more in rent, people aren’t getting as much childcare support. Even though they’re earning more they’re not really getting ahead," Timothy Smeeding, a leading expert on the poverty line, told USA TODAY.

The uptick in the national poverty rate announced Tuesday comes one year after the U.S. saw a larger spike in poverty, as many low-income Americans lost pandemic-era assistance, like extra food stamps. At this time last year, officials announced the share of Americans below the poverty threshold used by social scientists had risen from 7.8% to 12.4%.

The number of Americans living in poverty inched upwards in 2023 even as annual median household incomes increased. The last time median household incomes increased was before the COVID-19 pandemic, the Census Bureau said.

"We are back to that pre-COVID peak that we experienced," said Liana Fox, the Census Bureau's assistant division chief for economic characteristics, social, economic and housing statistics. "We're back to our median household income."

However, data released Tuesday shows the longstanding income gap between women and men widened for the first time in years, Fox said, as more woman worked but earned lower incomes. Last year was the first time the income gap between women and men widened since 2003, Fox said. Data released Tuesday shows for every $1 men earn, women earn 82.7 cents.

Child poverty also rose in 2023, the Census Bureau announced, as more families with low-incomes struggled to pay for housing, food, child care and other expenses. In 2022, the child poverty rate was 12.4%, and it ticked up to 13.7% in 2023, the Census Bureau said Tuesday.

Luke Shaefer, a poverty researcher and co-author of the book "Injustice of Place: Uncovering the Legacy of Poverty in America," said the U.S. has failed to reduce child poverty over the last two years because policymakers didn't keep the expanded child income tax credit.

In 2021, child poverty fell to a historic low of around 5% after households with children got more money in tax credits during the COVID-19 pandemic. After the expanded benefits were rolled back, child poverty rose sharply to pre-pandemic levels, Shaefer told USA TODAY.

“Today’s annual census data release is a stark reminder that child poverty in this country is a policy choice. We have proven solutions to address this crisis," said Shaefer, who also runs the nonprofit Rx Kids in Flint, Michigan, the first ever citywide cash assistance program for prescriptions for pregnant people and children up to age 1.

Incomes in America increased

In 2023, the median annual household income rose to $80,610 from $77,540 in 2022.

"There are more total workers and more full-time year-round workers," said Fox, explaining the rise in household incomes since 2019. "That's the biggest story, people are working more."

Even though incomes rose, the additional money in people's pockets wasn't enough to overcome costly bills like rent and child care, as well as other drains on people's incomes, like payroll taxes and work expenses, the Census Bureau said.

Another poverty measure, called the Official Poverty Measure − which only focuses on pre-tax income − went down in 2023, the Census Bureau said, even though the true number of Americans experiencing poverty increased.

“People are earning more but that doesn’t take account of any expenses, tax credits or taxes," Smeeding said.

What is the poverty level income?

In 2024, a family of four is living in poverty if they make less than $30,900 annually, the Census Bureau said Tuesday. But that number is tied to the Official Poverty Measure, which doesn't take into account different costs of living, unlike the Supplemental Poverty Measure, which considers living costs.

“The official poverty rate has got some issues. It doesn’t do a good job of capturing all the costs families face today," said Greg Acs, vice president for income and benefits policy at the Urban Institute, a social policy think tank.

Different states and zip codes across the U.S. have different Supplemental Poverty Measures. An easier way way to see how your household income stacks up against the cost of living in your area is to use living wage calculators, economists say.