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By Jens Odegaard on November 30th, 2011


I had a discussion with some family members over Thanksgiving weekend about reasons for discontentment in modern-day America and Occupy Wall Street (OWS) protesters. I recently read in The New York Times that 49.1 million Americans live in poverty based on a new supplemental measure, and decided to throw this ingredient into the conversation dish--making the point that I think there are some real systemic problems in our country that need addressed. I received a response along the lines of, “Yeah, but what does poverty even mean?” In other words, “Okay, but how poor are they, really?” The subtext being, “There’s not really that big of a problem.”

It made me wonder, "How is poverty measured?" 

It turns out that there are basically two main poverty guidelines used by government agencies. One set of guidelines comes from the Census Bureau and the other from the Department of Health and Human Services (HHS).

The average U.S. family has 2.6 (we'll round it up to three) people, according to the Census Bureau, so we’ll use that as the baseline.

According to the Census Bureau, a three-person family is in poverty if their total annual income is $17,374 or less. According to the HHS, the same is true if income is $18,530 in the lower 48 states or DC, $21,320 in Hawaii, or $23,160 in Alaska.

Basically we’re looking at about $18,000 or less for three people to live on for a year. I don’t understand how you even survive on that income.

$18,000 to cover things like housing, food, transportation, clothing, and health care? It simply doesn’t add up. Correlating nicely with the average family size, the average consumer unit (basically those living together and making expenditures on shared income) in the U.S. also has three people, according to the Bureau of Labor Statistics (BLS). Consumer units with incomes between $15,000 to $19,999--roughly the poverty level for a three-person family--have annual expenditures of $24,935, according to the BLS’ Consumer Expenditure Survey (CES).

Yes, you read that right, on average those units/families are spending between $4,936 and $9,935 more than they make every year. Housing alone for that income level costs $10,047 on average, according to the CES.

In other words, those below the poverty level are really poor and are getting poorer every year they spend more than they make. Even those just above the poverty level with incomes of $20,000 to $29,999 are spending $29,158 on average, according to the CES--meaning they aren’t doing so hot either.

Obviously, some of that spending on things like alcohol, entertainment, tobacco products, and gifts could be avoided. But for the $15,000 to $19,999 income range, those extras only add up to $2,124, according to CES data. Even without the extras, those families are still not bringing in enough to cover the necessary expenditures on things like food, housing, transportation, health care, and education.

More and more people are falling into poverty because they can’t make enough to cover their expenses. It’s no wonder, 13.9 million Americans actively looking for work can’t even find a job, according to the latest BLS Employment Situation Summary.

I’m not advocating OWS per se, but I do think the discontentment with the state our country is in and the direction it is heading (which OWS taps into on some level) is grounded in a real problem: There aren’t enough jobs in this country, and there are more poor people in the U.S. than ever recorded before. I’m surprised more people aren’t upset. Discontentment with direction (something OWS tends to struggle with) leads to solutions for problems, which is what we need.