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According to recent research from the University of Notre Dame, the University of Chicago, and Baylor University, poverty has declined significantly in recent decades. This news contradicts the official U.S. Census Bureau figures, which have only shown a slight reduction in poverty. The study, which uses consumption poverty metrics rather than income-based poverty, found that poverty rates steadily decreased between 2020 and 2022, even as income-based poverty remained volatile.
The findings were detailed in the Annual Report on U.S. Consumption Poverty: 2022, co-authored by James Sullivan of the University of Notre Dame, Bruce Meyer of the University of Chicago, and Jeehoon Han of Baylor University. The report draws on data from the U.S. Bureau of Labor Statistics’ Consumer Expenditure Survey and the U.S. Census Bureau’s Current Population Survey.
Consumption poverty, which measures what families are able to purchase in terms of food, housing, transportation, and other goods and services, is suggested as a better indicator of economic well-being than income-based poverty, which can fluctuate for reasons unrelated to well-being.
Between 1980 and 2022, consumption poverty fell from 33.8% to 6.0%, a far more significant decline than the official poverty rate would suggest.
Flawed adjustments to the federal poverty line, a narrow definition of income, and biased measures of family resources are identified as the primary reasons for the disparity between consumption-based and official poverty metrics. The researchers argue that these findings provide a more accurate picture of the standard of living for the most vulnerable members of society.
The report also disputes the notion of a sharp decline in poverty in 2021 followed by a substantial rise in 2022. Instead, it notes that consumption poverty declined steadily during recent years while income poverty fluctuated dramatically.
“Annual income will not reflect the standard of living of individuals who smooth consumption by drawing upon savings or by borrowing,” said the researchers. “This distinction is particularly relevant when income fluctuates significantly.”
Further analysis is available in an article published in Phys.org.