How is poverty measured?

Poverty is measured in the United States by comparing a person’s or family’s income to a set poverty threshold or minimum amount of income needed to cover basic needs. People whose income falls under their certain thresholds are considered low income. Other countries measure poverty in different ways, for example, by using a relative measure. Relative thresholds are developed by reference to actual expenses (or incomes) of the population, “based on a set of goods that people need for survival in a particular year, and may change over time. Year to year, both the set of goods and the prices of those goods change in the threshold.” Source: U.S. Census Bureau, “Poverty Glossary.”

The U.S. Census Bureau is the government agency in charge of measuring poverty. To do so, it uses two main measures, the Official Poverty Measure (OPM) and the Supplemental Poverty Measure (SPM). Both are described in this FAQ.

Poverty FAQs

Official Poverty Measure

The Census Bureau determines poverty status by using an Official Poverty Measure (OPM) to compare pre-tax cash income (e.g., earnings, Social Security, pensions, and disability benefits) against a national poverty threshold adjusted by family composition.

The OPM uses calculations of these three elements—income, poverty threshold, and family composition—to estimate what percentage of the population experiences poverty.

Official poverty estimates are drawn from the Current Population Survey Annual Social and Economic Supplement (CPS ASEC), which is conducted in February, March, and April with a sample of approximately 100,000 addresses per year.

In 2023, the OPM’s national poverty rate was 11.1%, representing 36.8 million people living in poverty. Estimates of the proportion of the U.S. population experiencing poverty are released by the U.S. Census Bureau every September for the previous calendar year.

What the OPM Counts as Income

The Current Population Survey’s Annual Social and Economic Supplement (CPS ASEC) is a monthly survey that provides current estimates and trends in employment, unemployment, earnings, and other characteristics of the general labor force, the population as a whole, and various population subgroups. Pre-tax income is defined by the OPM to include the following sources:

Earnings
Unemployment and workers’ compensation
Social Security
Supplemental Security Income
Public assistance
Veterans’ payments
Survivor benefits
Disability benefits
Pension or retirement income
Interest
Dividends
Rents, royalties, and estates and trusts
Educational assistance
Alimony
Child support
Financial assistance from outside the household
Other income

The OPM does not include as income noncash government benefits such as Supplemental Nutrition Assistance Program (SNAP) benefits and housing assistance.

How OPM Sets Thresholds

Poverty thresholds, the minimum income needed to avoid poverty, are updated annually for inflation using the Consumer Price Index for all Urban Consumers (CPI-U), and adjusted for family size, composition, and age of householder.

OPM thresholds do not vary geographically.* In 2023, the OPM poverty threshold for a family of four (two adults and two related children under 18 years old) was $30,900.

Poverty thresholds serve different purposes, including tracking poverty over time, comparing poverty across different demographic groups, and as the starting point for determining eligibility for a range of federal assistance programs.

(To learn more about using the poverty thresholds, or their administrative counterpoint, the poverty guidelines, for determining program eligibility, see FAQ: What are poverty thresholds and poverty guidelines?)

*The Census Bureau cautions that the thresholds should be interpreted as a “statistical yardstick” rather than as a complete accounting of how much income people need to live. They were intended to define and quantify poverty in the United States and to record changes in the number of persons and families in poverty and their characteristics over time.

How the OPM Defines Family

Family is defined by the OPM as a group of two people or more (one of whom is the householder) related by birth, marriage, or adoption who reside together. All such people (including related subfamily members) are considered as members of one family.

Big Picture: Poverty Trends, 1959 to the Present

In 1959, when the official government poverty series began, overall poverty in the United States was estimated at 22% of all people. Before that time, unofficial estimates by researchers found a poverty rate in 1914 of 66%; 32% in 1947; and 24% in 1958.**

Figure 1 shows more recent poverty rates—in 1976, 2001, and 2023—by age, race, and Hispanic origin, using the OPM.

Bar graph showing official U.S. poverty rates in 1976, 2001, and 2023 showing variation by age and racial/ethnic group over time. — **Figure 1. Official U.S. poverty rates in 1976, 2001, and 2023 show variation by age and racial/ethnic group and over time.**
**Source**: U.S. Census Bureau. Poverty in the United States: 2023. (September 2024): Table A-3, pp. 22-30. >
**Note**: Census Bureau race/ethnicity data on Asian and Pacific Islander peoples and American Indian and Alaska Native peoples was not collected until 1987, thus missing here for 1976.

**R. D. Plotnick, E. Smolensky, E. Evenhouse, and S. Reilly, “The Twentieth-Century Record of Inequality and Poverty in the United States,” in The Cambridge Economic History of the United States, Vol. 3, eds. S. L. Engerman and R. E. Gallman (Cambridge: Cambridge University Press, 2000), 249–299; G. Fisher, “Estimates of the Poverty Population under the Current Official Definition for Years before 1959,” mimeograph, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, 1986.

OPM Estimates Appear in the Annual “Poverty Report”

The Census Bureau releases the results of their analysis using the OPM every year in a report called Poverty in the United States. The report includes charts and tables on information such as the following:

poverty estimates by race and Hispanic origin, sex, age, nativity, region, residence, work experience, disability status, educational attainment, and family type; and
income-to-poverty ratios, child poverty, shared households, and estimates using both official and supplemental poverty measures.

To learn more about the Official Poverty Measure, see the Census Bureau discussion, How the Census Bureau Measures Poverty.

How Experts Say the OPM Falls Short

Researchers and policymakers have long called for changes to the Official Poverty Measure for several reasons. However, despite its shortcomings (detailed below), its salience in policymaking is noted by the economists Bruce D. Meyer and James X. Sullivan:

Few economic indicators are more closely watched or more important for policy than the official poverty rate. The poverty rate is often cited by policymakers, researchers, and advocates who are evaluating social programs that account for more than half a trillion dollars in government spending.

Principal criticisms of the OPM include:

Its “headcount” approach identifies only the share of people who fall below the poverty threshold, but does not measure the depth of economic need;
It does not reflect modern expenses and resources, by excluding significant draws on income such as taxes, work expenses, and out-of-pocket medical expenses, and excluding potentially sizable resources such as in-kind benefits (e.g., food assistance);
It does not vary by geographic differences in cost of living within the contiguous United States despite huge variation;
It is not adjusted for changes in the standard of living over time; and
Its strict definition of measurement units—“family”—as persons living in the same household who are related by birth, marriage, or adoption does not reflect the nature of many households today, including those made up of cohabitors, unmarried partners with children from previous relationships, and foster children.

While the official measure remains the official national poverty statistic, the Census Bureau has been estimating poverty using several experimental measures as well, since the mid-1990s. The most recent and prominent experimental measure, the Supplemental Poverty Measure—a work-in-progress that supplements but does not replace the official measure—is discussed below.

For more information about improving poverty measures to better reflect household needs, watch this July, 2023, webinar hosted by IRP: Improving How Poverty Is Measured: A Recommendation To Better Reflect Households’ Basic Needs, with James Ziliak, Barbara Wolfe, Jane Waldfogel, Ingrid Gould Ellen, and Indivar Dutta-Gupta.

Supplemental Poverty Measure

The Census Bureau introduced the Supplemental Poverty Measure (SPM) in 2010 to provide a measure of poverty in the United States better reflecting life in the 21st century, including contemporary social and economic realities and government policy.

As its name suggests, the SPM supplements but does not replace the Official Poverty Measure (OPM), which remains the nation’s source for official poverty statistics and for determining means-tested program eligibility.

In a side-by-side comparison of the OPM and the SPM, the Census Bureau notes their differences in measurement units, poverty threshold, threshold adjustments (e.g., by family size), updating thresholds, and what counts as resources, summarized in the table below.

Conceptual differences between the Official Poverty Measure and the Supplemental Poverty Measure.
Differences In Poverty Measures
	Official Poverty Measure	Supplemental Poverty Measure
Measurement units	Families (individuals related by birth, marriage, or adoption) or unrelated individuals	Resource units (official family definition plus any coresident unrelated children, foster children, and unmarried partners and their relatives) or unrelated individuals (who are not otherwise included in the family definition).
Poverty threshold	Three times the cost of a minimum food diet in 1963.	Based on recent expenditures for food, clothing, shelter, utilities, telephone, and internet (FCSUti).
Threshold adjustments	Vary by family size, composition, and age of householder.	Vary by family size, composition, and housing tenure with geographic adjustments for differences in housing costs.
Updating thresholds	Consumer Price Index for All Urban Consumers: all items.	Most recent 5-year moving average of expenditures on FCSUti, lagged 1 year.
Resource measure	Gross pretax cash income	Cash income, plus noncash benefits that resource units can use to meet their FCSUti needs, minus taxes (or plus tax credits), work expenses, medical expenses, and child support paid to another household.
Universe	Civilian noninstitutionalized population, excluding unrelated individuals under the age of 15 for whom poverty status cannot be determined.	Official Poverty Measure universe, plus unrelated individuals under the age of 15.
Time series	1959–present.	2009–present.

Source: U.S. Census Bureau. Poverty in the United States: 2023. (September 2024), p. 2.

Note: Family as defined by the Census Bureau is “a group of two people or more (one of whom is the householder) related by birth, marriage, or adoption and residing together; all such people (including related subfamily members) are considered as members of one family.” For more, see Subject Definitions.