Poverty in the United States: 2021

Abstract

This report presents estimates of poverty in the United States using both the official poverty measure and the Supplemental Poverty Measure (SPM) for calendar year 2021. The official poverty measure defines poverty by comparing pretax money income to a poverty threshold that is adjusted by family composition. The SPM expands the official poverty measure by accounting for many of the government programs that are designed to assist low-income families, but are not included in the official poverty measure. The SPM also includes federal and state taxes and work and medical expenses. In addition, the SPM accounts for geographic variation in poverty thresholds, while the official poverty measure does not. The report highlights that the SPM poverty rate in 2021 was 7.8 percent, a decrease of 1.4 percentage points from 2020, while the official poverty rate remained largely unchanged from 2020. This divergence in poverty rates is attributed to the effects of the American Rescue Plan Act (ARPA), which provided households with additional resources in the form of stimulus payments, expansions to refundable tax credits, and pandemic-specific school lunch benefits. The SPM accounts for these policy changes, while the official poverty measure does not. – AI-generated abstract