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Why the “Poverty” Definition Doesn’t Cut It

September 5, 2023
Person holding money

The US poverty threshold: a shockingly powerful definition that many of us have never stopped to think about. Here are a few facts to keep in mind the next time you hear the term.

What is the official definition of “poverty”?

“Three-time the cost of a minimum diet in 1963” (adjusted for inflation of course)

That’s right this incredibly powerful number that determines assistance for the most economically vulnerable members of our community is based on the price of bread 70 years ago. It is not based on the cost of living. Don’t take our word for it, read the incredibly yawn-inducing history of poverty thresholds here.

Here’s what that translates to in 2023 dollars:

2023 Poverty Threshold Annual Monthly
For individuals $14,580 $1,215
For a family of 2 $19,720 $1,643
For a family of 3 $24,860 $2,072
For a family of 4 $30,000 $2,500
For a family of 5 $35,140 $2,928
For a family of 6 $40,280 $3,357
For a family of 7 $45,420 $3,785
For a family of 8 $50,560 $4,213

What the poverty threshold does not account for:

Because the poverty threshold is NOT based on the cost of living it leaves out some crucial household expenses including:

  • Housing
  • Transportation
  • Child Care
  • Medical Costs including Health Insurance
  • Entertainment
  • Any savings towards retirement or live events
  • Taxes

The poverty threshold also fails to consider household types. The budget for a single working mom with three year-old looks very different than a married couple without children, though both would be considered a family of 2.

For more on why a “livable wage” is a wiser standard, check out this other blog post with data specific to Rapid City.

How powerful is the definition of “poverty”?

The poverty threshold determines who is “in need” of extra help from federal, state, and local government and organizations. It is one of the most powerful numbers in the United States, determining eligibility for hundreds of programs that help struggling families access food, housing, health care, child care, and educational assistance

Why we use “low-income” instead.

When we at JTVF share data on our community, we use 200% above the poverty line as our threshold. We know this is NOT enough income for a family to even meet basic needs, but it gives us a starting point to understand our community better. Most government benefit programs cut off between 130-209% of poverty. Let us be clear, we aren’t suggesting that if a household is 210% of poverty, they are able to afford minimum standards of living in our community. Learn more about how we define a livable wage below.

14% of Rapid City residents live in poverty, nearly 10,200 individuals. We know that doesn’t come close to measuring how many families struggle to make ends meet.

32% of Rapid City households are low income. That’s 22,459 individuals that live at 200% of the poverty line or below and still far below a livable wage for most, meaning families are surviving thanks to outside help or going without.

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