What's the official definition of being poor in America?

Federal poverty guidelines determine the amount of money that goes to states to help pay for food and housing and other basic needs for the poor. (Photo: REUTERS/Jim Young)

Recently issued federal poverty guidelines establish the 2012 definition of poverty in America.

Bottom line, it’s easier this year than last for families to qualify as poor and thus be eligible for state and federal government assistance programs, at least from the standpoint of income.

The down side? The U.S. Census last year reported an 11 percent increase in the cost of living in Minneapolis.

This year a hypothetical family of one adult and two children making an annual income of $19,090 or less is now officially poor, compared to the 2011 definition of poor for that family being $18,530.

Community Sketchbook focuses on the economic and social challenges facing communities, especially low-income communities and communities of color, and how people are trying to address them.

It is made possible by support from the John S. and James L. Knight Foundation, The Minneapolis Foundation, and some Minneapolis Foundation donor advisors.

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To put that in perspective, realize it figures out to one adult earner working full time for $9.17 an hour — about the cost of three tall lattes from Starbucks.

Further, for a family of four, one or two parents and children, the poverty guideline announced late last month sets an annual income of $23,050. Last year it was $22,350.

The federal definition establishes eligibility rules for federal public assistance programs, like TANF (Temporary Assistance for Needy Families), which replaced AFDC (Aid to Families with Dependent Children) in 1997. TANF money goes to the states to help pay for food and housing and other basic needs for the poor.

MFIP, the Minnesota Family Investment Program, is Minnesota’s version of TANF.

The U.S. guidelines serve as a benchmark for the states in determining who qualifies for their public assistance programs. In most states, if families exceed the poverty level income they lose their benefits.

Current Minnesota law, however, allows families to earn up to 115 percent of poverty and still receive cash benefits through MFIP.

But a proposed bill now before the House Health and Human Services Reform Committee would cut off benefits such as MFIP at 100 percent of poverty, explains Jessica L. Webster, staff attorney for the Legal Services Advocacy Project.

She and other advocates for the poor oppose such a measure.

Webster recalls that when MFIP was piloted in 1994 to 1997 persons were allowed to earn up to 140 percent of the poverty guideline. The idea, Webster says, was to allow families to save money and stabilize their housing and living situations before leaving MFIP, meant to be a temporary lifesaver for families.

In addition, local advocates for the poor like Kara Arzamendia, research director at the Children’s Defense Fund Minnesota, argue that an income of $23,000 for a family of four isn’t enough to meet basic needs.

She points to figures offered by the Jobs Now Coalition. Its online Family Wage and Budget Calculator estimates that a “basic needs” budget for a Minnesota family of four with two adults working full time and two children is actually about $56,300. (Figure in employer-provided health insurance, transportation costs, work clothes, child care.)

Other experts maintain 200 percent of poverty, or $46,100, is sufficient income to support our hypothetical family of four’s basic needs.

You’ll find a graph here listing qualifying incomes for up to families of eight ($38,890) with a sparse addition of $3,960 for each additional family member over eight. 

Update

This week the House Health and Human Services Reform Committee approved the bill that would cut off some benefits at 100 percent of poverty and passed the measure on to the state House Public Safety and Crime Prevention Policy and Finance Committee.

The poverty guidelines are used to determine whether persons qualify to receive certain kinds of economic assistance. In response to a reader’s query below whether the guidelines refer to before-tax income: that depends.

The U.S. Department of Health and Human Services explains: “…[S]ome agencies compare before-tax income to the poverty guidelines, while other agencies compare after-tax income. Likewise, eligibility can be dependent on gross income, net income, or some other measure of income.’’

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    Cynthia Boyd's picture
    Cynthia Boyd

    Cynthia Boyd writes Community Sketchbook for MinnPost.