US Has Been Undercounting People Living In Poverty, Hopkins Economist Says
BALTIMORE (WJZ) -- The U.S. has been undercounting the number of Americans living in poverty by millions, according to a Johns Hopkins economist.
Using quarterly spending data instead of annual income data, Hopkins economist Robert Moffitt and John Fitzgerald of Bowdoin College determined there were 8 million more impoverished people than the government's most recent income-based count in 2019.
"It reminds us that a lot of people don't have enough money to buy the basic necessities for life," said Moffitt.
Moffitt and Fitzgerald developed the Supplemental Expenditure Poverty Measure, factoring in credit card debt, health care deductibles and other elements not used in the federal government's assessment. The quarterly spending reports offer a better picture "because people are more likely to remember what they bought in that short a period," the researchers said.
"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," said Moffitt.
Overall, 48 million people in America are living in poverty, or about 14.5% of the country.
The economists suspect the number will only get higher in 2022 as Americans confront the pandemic, high inflation and the end of government programs like the Child Tax Credit. Moffitt said the poverty rate could be as high as 16%.
"We just need to increase our efforts because there are more people in dire circumstances than we thought," he 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."
Moffitt and Fitzgerald are scheduled to present their findings on Friday at the Brookings Papers on Economic Activity conference.
