In a new study, Johns Hopkins economist Robert Moffitt suggests that the U.S. government underestimated the number of people in poverty by roughly 8 million in the 2019 census income-based count.
Both Moffitt and co-author John Fitzgerald, of Bowdoin College, say that previous government counts ignored information such as credit card debt and health care deductibles, which “disproportionately burden the poor.”
The two find that 48 million people lives below the poverty line of $26,000 a year for a family of four, compared to the Census Bureau’s estimate of 40 million.
“Eight million extra people are living in poverty according to our calculation,” Moffitt said in a statement. “It reminds us that a lot of people don’t have enough money to buy the basic necessities for life.”
The paper, which will be presented at the Brookings Institution’s Spring 2022 conference, offers a new method for how poverty could be measured. Their measurement — the Supplemental Expenditure Poverty Measure — would use quarterly reports of spending data and combine the spending data typically used in these estimates with those elements that are often ignored, such as health care deductibles.
“If they have health insurance, these families have very high deductibles. So if they get sick, it’s a large out-of-pocket expense, leaving them less money for food and rent,” he said.
The report does anticipate that the 2022 poverty numbers will be worse because of the pandemic and inflation.
Moffitt does say, however, that the U.S. is doing a lot to keep people out of poverty.
“We just need to increase our efforts because there are more people in dire circumstances than we thought,” Moffitt said. “We have a lot of people suggesting we don’t have a serious poverty problem, but it is serious, and we have to contend with it.”
