Image: Rural Economy & Population

Poverty Overview

A Note About the Data Sources

Up to 2012, the poverty statistics presented below come from the U.S. Census Bureau’s Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS), which is the source of official Federal poverty statistics.  (See How Is Poverty Defined? for more about definitions and income thresholds used in determining poverty rates.) The 2014 CPS ASEC (2013 poverty income year) utilized a split sample to test a redesigned set of income questions. As a result, the source of the 2013 poverty income data is restricted to the portion of the sample that received the income questions consistent with the 2013 CPS ASEC. That included approximately two-thirds of the full CPS sample. For purposes of producing subnational and subpopulation poverty estimates, the Census Bureau now recommends using the American Community Survey (ACS), which has a much larger sample size. 

Following Census Bureau recommendations, we now use the ACS in place of the CPS for nonmetropolitan area poverty statistics. The ACS, however, does not allow for the same historical perspective as the CPS. Therefore, we begin the ACS series in 2009 and continue to provide annual CPS poverty rates up to 2012. The two surveys should not be directly compared, though, given that the ACS survey design differs from the CPS in a variety of ways and may produce somewhat different estimates. (See Poverty and Deep Poverty Increasing in Rural America for more information about CPS and ACS differences.) For example, in 2012 the U.S. poverty rate was estimated to be 15.9 percent based on the ACS, compared to 15.0 percent based on the CPS. Poverty estimates for the population living in nonmetropolitan (nonmetro) areas in 2012 were 18.2 percent for the ACS and 17.7 percent for the CPS. The metropolitan (metro) area poverty rates were 15.5 percent (ACS) and 14.5 percent (CPS). The ACS poverty rates for the most current year (2013) were 15.8 percent U.S., 18.4 percent nonmetro, and 15.4 percent metro.

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The higher incidence of nonmetro poverty relative to metro poverty has existed since the 1960s when poverty rates were first officially recorded. In the 1980s, average poverty rates were 4.5 percentage points higher in nonmetro areas than in metro areas; in the 1990s, the average difference was 2.6 percentage points; from 2000 to 2009, the average difference was 2.7 percentage points. The difference in 2010 (1.6 percentage points) was the smallest on record and was only the second time since 1959 that the nonmetro/metro poverty rate gap had fallen below 2 percentage points (it was 1.8 in 1994). The uneven pace of the economic recovery following the 2007-09 recession has reversed, at least temporarily, the narrowing rural/urban poverty gap.

During the 1990s, the nonmetro poverty rate declined fairly steadily from a high of 17.2 percent in 1993 to a record-low rate of 13.4 percent in 2000. The decline in poverty during the 1990s was mirrored by growth in the economy overall. Between 1993 and 2000, the economy grew by 4 percent per year, significantly higher than the average growth rate of 2.7 percent during the 20 years prior to 1993. Nonmetro poverty rose during the 2001 recession to 14.2 percent where it remained for 3 consecutive years before increasing once again. The average nonmetro poverty rate from 2004 to 2007 was 15.0 percent. The nonmetro poverty rate grew by 1.9 percentage points from 2008 (15.1 percent) to 2011 (17.0 percent). In 2012 it increased again, to 17.7 percent, reaching its highest rate since 1986 when it was 18.1 percent.

Child Poverty

An important indicator of the nation’s long-term well-being is poverty among children, since child poverty often has an impact that carries throughout a lifetime, particularly if the child lived in poverty at an early age. As with the early 1980s recession, rural children have been disproportionately affected by the recent economic downturn. Child poverty is more sensitive to labor market conditions than overall poverty, as children depend on the earnings of their parents. Older members of the labor force, including empty nesters and retirees, are less affected by job downturns, and families with children need higher incomes to stay above the poverty line than singles or those married without children. Like the overall poverty rate, nonmetro child poverty has also been historically higher than metro child poverty, and increased to record high levels in 2012. According to ACS estimates, the nonmetro child poverty rate stood at 26.2 percent in 2012 and 2013, which was more than four percentage points higher than the metro child rate for the same years. 

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Deep Poverty

"Deep poverty" is commonly defined as having cash income below half of one’s poverty threshold. In 2013, that meant a subsistence level of less than $1,000 a month for a family of 4. A total of 7 percent of the U.S. population experienced deep poverty in 2013. Unlike trends in the official poverty statistics, there is not a pronounced and consistent rural-urban gap in the share of the population experiencing deep poverty over time. Nonetheless, the slow rate of economic recovery from the 2007-09 recession for nonmetro areas is evident in deep poverty trends. According to ACS estimates, the nonmetro deep poverty rate continued to grow post-recession, reaching a high of 7.8 percent in 2013. In metro areas, deep poverty peaked in 2011 (at 7.0 percent) and was not significantly different in 2013 (6.9 percent).

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How Is Poverty Defined?

In the U.S., being in poverty is officially defined as having an income below a federally determined poverty threshold. Poverty thresholds were developed in the 1960s and are adjusted annually to account for inflation. They represent the Federal Government’s estimate of the point below which a family of a given size has cash income insufficient to meet basic needs. Any family/individual with total income less than an amount deemed to be sufficient to purchase food, shelter, clothing, and other essential goods and services is classified as poor. (For details, see " How the Census Bureau Measures Poverty.") The amount of income necessary to purchase these basic needs is set by the Office of Management and Budget (OMB). The 2013 poverty line was $12,119 for an individual under 65 years of age and $11,173 for those 65 years or older. The poverty line for a three-person family with one child and two adults was $18,751 in 2013; for a family with two adults and three children the poverty line was $27,801. For a complete list of poverty lines by size of family and number of children, see the U.S. Census Bureau's tables of Poverty Thresholds.) Income includes cash income (pretax income and cash welfare assistance), but excludes in-kind welfare assistance, such as food stamps and Medicaid. Poverty thresholds are set for families by size and composition, and they are updated annually to correct for inflation.

Metro-nonmetro comparisons of poverty rates pose some measurement issues that are worth bearing in mind. As one example, U.S. poverty rates do not make any adjustments for differences in cost of living across areas. If the cost of purchasing basic needs is lower in nonmetro areas, then the nonmetro poverty rate would overstate the actual level of poverty experienced by nonmetro residents. There are many other examples though, and the effect they would have on an area’s actual level of poverty can go in either direction. For example, the poverty thresholds do not account for the possibility that basic needs will differ across areas. Transportation to work in nonmetro areas may be much more expensive than in metro areas where access to public transit is greater. Similarly, the measure of poverty does not account for access to other "public goods" such as health care, schooling, or communication networks, or "public bads" such as noise and air pollution, which also differ systematically across metro and nonmetro areas.

Last updated: Monday, April 27, 2015

For more information contact: Tracey Farrigan

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