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The Poverty Number That Hides Half the Story

The Poverty Number That Hides Half the Story

Why America can't agree on how many people are poor—and what's at stake in the fight over the answer

Overview

The Census Bureau announced on September 9, 2025 that poverty fell to 10.6% in 2024—the lowest in years and proof, officials said, that the economy was lifting Americans up. But buried in the same report: a different poverty measure showed 12.9% of Americans struggling, with no improvement at all. Same country, same year, two completely different stories about who's hurting.

The gap exposes the most consequential measurement fight in domestic policy. The official poverty rate ignores food stamps, tax credits, and most of the $1 trillion safety net. The Supplemental Poverty Measure counts those programs—but uses a higher threshold that rises with living costs. Politicians, researchers, and advocates cherry-pick whichever number supports their narrative. Meanwhile, the real question goes unanswered: are fewer Americans struggling, or did we just change how we count them?

Key Indicators

35.9M
Americans in poverty (official measure)
10.6% poverty rate, down 0.4 points from 2023
12.9%
Supplemental poverty rate
No statistical change from 2023, despite official rate decline
3x
Black/Hispanic child poverty vs. white children
25.4% of Black children in poverty vs. 8.2% of white children
$83,730
Real median household income
Statistically unchanged from 2023; gains only at top 10%
5.9M
More children in poverty since 2021
Child poverty more than doubled after pandemic relief expired

People Involved

Liana Fox
Liana Fox
Assistant Division Chief, Census Bureau (Lead researcher on 2024 poverty report)
Scott Winship
Scott Winship
Senior Fellow and Director of Poverty Studies (Conservative economist analyzing poverty trends)

Organizations Involved

U.S. Census Bureau
U.S. Census Bureau
Federal Statistical Agency
Status: Produces both official and supplemental poverty measures annually

The federal agency tasked with measuring American poverty, caught between two incompatible methodologies.

CE
Center on Budget and Policy Priorities
Progressive Research Organization
Status: Leading advocate for SPM adoption and safety net expansion

Progressive think tank that champions the Supplemental Poverty Measure as revealing safety net effectiveness.

American Enterprise Institute
American Enterprise Institute
Conservative Research Organization
Status: Critic of SPM methodology and threshold calculations

Conservative think tank that argues the SPM inflates poverty by counting medical expenses against income.

Timeline

  1. US Poverty Rate Falls to 10.6% in 2024

    Data Release

    Official measure shows improvement, but SPM remains flat at 12.9%. Experts split on meaning.

  2. SPM Jumps 4.6 Points to 12.4%

    Data Release

    14.5 million fall into poverty as pandemic aid ends. Official rate barely moves.

  3. Enhanced Child Tax Credit Expires

    Policy Shift

    Congress lets expansion lapse. Child poverty will more than double to 12.4% in 2022.

  4. American Rescue Plan Expands Child Tax Credit

    Relief

    Increases credit to $3,600 per young child. Child poverty will hit record low of 5.2%.

  5. CARES Act Sends Stimulus Checks

    Relief

    First round of $1,200 payments lifts 11.7 million above poverty line in 2020.

  6. Census Debuts Supplemental Poverty Measure

    Methodology

    New measure counts government benefits, subtracts expenses. Shows higher poverty than official rate.

  7. Welfare Reform Passes

    Legislation

    TANF replaces cash assistance with work requirements. Deep poverty will double over 15 years.

  8. Poverty Hits Modern Low of 11.1%

    Milestone

    Official rate reaches record low after decade of War on Poverty programs.

  9. Economic Opportunity Act Signed

    Legislation

    Creates Job Corps, VISTA, Head Start, Legal Services, Community Action Program.

  10. LBJ Declares War on Poverty

    Policy Launch

    President Johnson vows to eliminate poverty in first State of Union address. Poverty rate: 19%.

Scenarios

1

Congress Replaces Official Measure With SPM

Discussed by: Center on Budget and Policy Priorities, progressive poverty researchers, some Democratic lawmakers

The 60-year-old official poverty measure gets retired in favor of the Supplemental Poverty Measure, forcing federal programs to acknowledge modern living costs and account for safety net benefits. Federal aid formulas shift based on geographic cost-of-living differences, redistributing billions toward high-cost states. Conservative states revolt over what they call inflated poverty counts driven by healthcare expenses, while advocates celebrate finally measuring whether anti-poverty programs actually work. The change makes safety net effectiveness impossible to ignore in budget debates.

2

Dual Measures Continue, Confusion Reigns

Discussed by: Current Census Bureau approach, most policy analysts, Congressional Research Service

The Census keeps publishing both numbers indefinitely, letting politicians pick whichever rate suits their message. Democrats cite SPM spikes when pandemic aid expired as proof the safety net matters. Republicans point to official rate declines as evidence the economy is lifting people up. Research institutions fracture into camps using incompatible data. Federal programs stay tied to the outdated official measure because no consensus exists to change it. Poverty becomes less a measurement than a Rorschach test, with the real trend buried under dueling methodologies.

3

New Administration Revives Expanded Child Tax Credit

Discussed by: Economic Policy Institute, Columbia University poverty researchers, progressive Democrats

Facing data showing child poverty more than doubled after 2021, a future administration reinstates the enhanced Child Tax Credit as permanent policy. Monthly payments of up to $300 per child cut child poverty from 13.4% to under 7% within a year. The SPM documents the dramatic impact while the official measure shows modest improvement, reigniting the measurement debate. Critics attack the cost—over $100 billion annually—while supporters point to the 2021 experiment that briefly made the U.S. a leader in child poverty reduction before Congress let it die.

4

Economic Downturn Exposes Safety Net Gaps

Discussed by: World Bank projections, Federal Reserve outlook, Brookings Institution economists

Recession hits in 2026-2027, unemployment spikes, and both poverty measures surge. But while the official rate climbs 2-3 percentage points like in past recessions, the SPM jumps 6-8 points as millions lose employer health insurance and face medical expenses. The divergence finally forces a reckoning: either admit the SPM is broken, or acknowledge that the safety net has massive holes that only show up when crisis hits. TANF reaches just 23 of every 100 poor families, unchanged since before the pandemic, leaving the unemployed with nowhere to turn.

Historical Context

War on Poverty (1964-1973)

1964-1973

What Happened

President Johnson launched the most ambitious federal anti-poverty campaign in U.S. history, creating Medicare, Medicaid, Head Start, food stamps, Job Corps, and Legal Services. The poverty rate plummeted from 19.5% in 1963 to 11.1% in 1973—the sharpest sustained decline ever recorded. Economic growth during the 1960s expansion lifted incomes while new programs caught those left behind.

Outcome

Short Term

Poverty cut nearly in half in a decade. African American poverty fell from 55% to 27%.

Long Term

Official poverty rate has fluctuated between 11-15% ever since, never falling below the 1973 low despite trillions in spending.

Why It's Relevant Today

Shows poverty can drop dramatically with economic growth plus targeted programs—but also that progress stalled for 50 years.

1996 Welfare Reform

1996-present

What Happened

Congress replaced open-ended cash assistance with TANF—time-limited welfare tied to work requirements. Caseloads fell 60% as families were pushed off aid whether they found work or not. Employment rose for single mothers during the late-1990s boom, but deep poverty doubled over the following decade as the safety net frayed. By 2014, TANF reached just 23 of every 100 poor families versus 68 in 1996.

Outcome

Short Term

Welfare rolls dropped dramatically. Employment among single mothers increased during 1990s economic expansion.

Long Term

Deep poverty doubled. Number of children in families with under $2/person/day income doubled from 1996 to 2011.

Why It's Relevant Today

The last time America radically changed how it fights poverty—it worked during good times but devastated the poorest during recessions.

Pandemic Relief Experiment (2020-2021)

2020-2021

What Happened

Three stimulus rounds plus enhanced unemployment benefits and expanded Child Tax Credit delivered the most aggressive poverty relief since the 1960s. The government sent checks directly to 160 million households totaling $931 billion. Monthly child tax credit payments of $300 cut child poverty in half to 5.2%—the lowest ever recorded. Then Congress let it expire.

Outcome

Short Term

Child poverty fell 46% from 2020 to 2021. Black child poverty dropped 8.8 points in one year.

Long Term

When aid expired in 2022, child poverty more than doubled back to 12.4%. 5.9 million more children fell into poverty.

Why It's Relevant Today

Proved direct cash payments can slash poverty almost overnight—and showed how quickly gains vanish when the money stops.

10 Sources:
+4
U.S. Census Bureau Center on Budget and Policy Priorities Economic Policy Institute National Center for Biotechnology Information U.S. Census Bureau First Focus on Children U.S. Census Bureau Center on Budget and Policy Priorities U.S. Census Bureau Center on Budget and Policy Priorities