The Definition of Poverty

The poverty thresholds, as determined by the United States Census Bureau, vary by the size of a household and typically increase from year to year. In 2023 it was $14,580 for a household of one person (thresholds in Hawaii and Alaska are higher). A family of three persons was considered poor if it earned less than $24,860 in 2023 (this amount may vary a little bit depending on the make-up of the family). It was $30,000 in 2023 for a family of four. For larger families, the thresholds are higher. The Bureau looks at the amount an average family spends on necessary food and multiplies this by three to arrive at the poverty line. The U.S. Census Bureau does not distinguish between the different areas of the country, even though the cost of living varies widely within the United States.

When measuring a household’s income, the U.S. Census Bureau includes all forms of monetary income, such as earnings, unemployment compensation, cash welfare payments, Social Security benefits, pensions, interest, rent, alimony, and child support. The official poverty rate does not include non-cash benefits, such as food stamps, housing subsidies, and health care assistance. However, since 2014, the Census Bureau began to publish an unofficial poverty rate which includes the above mentioned forms of income plus income from earned-income tax credits, housing subsidies, school lunch and home heating subsidies. It also adjusts income for taxes, child care, health insurance and out-of-pocket medical costs. In addition, it reflects regional cost of living differences.

According to the official definition and based on a Census Bureau survey of approximately 100,000 United States households, 11.6% of the population was considered poor in 2023. In 2019, 10.5% of the population lived in poverty. It was 11.8% in 2018. During most years, the poverty rate declines. In 2011 and 2012 it was 15%, in 2016 it was 12.7%, and in 2017 12.3%. The 2020 pandemic caused  large parts of the economy to significantly stagnate and the poverty rate has increased slightly compared to what it was in 2019. The expectation is that in the near future, the rate will decrease again. For more detailed information about the United States poverty rate, including rates among varying demographic groups, visit (then select “Income and Poverty”).

How the Government Uses the Poverty Line

The government uses the poverty line to determine who receives financial handouts and in-kind assistance. Many poor qualify for programs such as TANF (Temporary Assistance to Needy Families), housing subsidies, food stamps, Medicare or Medicaid, Social Security and disability benefits, school lunch vouchers, child care assistance, and a host of other state or federal programs. Households are eligible for certain programs if they fall below the poverty line, or within a factor of the poverty line (for example, below 150% of the poverty line).

Median Household Income

Real (adjusted for inflation) median United States household income was approximately $78,000 in 2023 (this amount does not include government welfare benefits and tax distributions). This means that 50% of all households earned more than this amount. In 2019 it was $69,560, in 2018 it was $63,324, and $61,400 in 2017. In 2016 it was $59,039, $57,230 in 2015, $53,046 in 2013, $50,502 in 2011, and $49,777 in 2009. In 1965, real median income in the United States was $36,847. As you can see, real median household incomes in the U.S. have steadily risen during most years.

Incomes vary significantly across different racial and other demographic groups. For more information about median and mean incomes in the United States, including distributions among racial groups, please visit (then select “Income and Poverty).

Median incomes also vary quite a bit across geographic areas. Median household income was lowest in Puerto Rico, West Virginia and Mississippi (approximately 30%, 62%, and 64% of the U.S. median, respectively), and highest in Maryland, Washington D.C., and Massachusetts (approximately 118%, 117% and 116%, respectively). Across the world, highest poverty rates were observed in various African countries, as well as Syria, Haiti, and Venezuela. Comparisons of poverty rates across different countries may be tricky because not all countries use the same definition for what they consider poverty and not all countries measure accurately.

In general, real (adjusted for inflation) median incomes in most industrialized countries increase and poverty decreases during non-recessionary, peaceful years.

How to Reduce Your Chances to Fall into Poverty

While some causes of poverty relate to factors beyond a household’s immediate control (economic conditions in a certain area, medical hardships, societal failings, discrimination), a portion of today’s poverty can be prevented by better individual decision-making. Individuals who make sound personal decisions in their private, academic, and professional lives fare significantly better than individuals who don’t. The following are keys to sound economic decision-making, which has helped many households avoid poverty:

1. Live a healthy lifestyle.
People who live healthy life styles (those who exercise, eat well, avoid harmful addictions, allow reflective time for themselves, have a positive outlook on life, and are interested in learning and improving themselves) usually do better in their careers and generally have incomes higher than those who fall short in several of these areas.

2. Learn a trade.
People who invest in themselves by learning a marketable trade or skill (by teaching yourself, or by going to school, or through on-the-job training), experience higher earnings than people who don’t.

3. Invest wisely.
People who save and make sound financial decisions experience a greater degree of financial success. Examples include investing in diverse and financially sound assets, not going into excessive debt, building a sound credit rating, and purchasing health, disability, and life insurance. Many individuals and households who borrowed an irresponsibly large amount of money in order to buy a house during the housing boom and the sub-prime mortgage years found themselves in financial difficulty and sometimes without their house and without a place to live. When you borrow money to purchase a house or any other asset, be sure that you can afford to make payments in the future, even when asset prices decrease and/or interest rates increase (if you negotiated a variable rate).

4. Make sound relationship decisions.
People who choose a responsible partner and have children at a financially appropriate time (or do not have children) experience better financial and emotional health.

People who have made unwise decisions, or who have fallen victim to poverty for reasons beyond their control (the economy, natural disasters, disabilities) often find themselves applying for government assistance. Many programs provide temporary relief; however, many of the government anti-poverty programs also discourage many people from working. Welfare recipients are often financially better off continuing to receive the government benefits as compared to having a job. Some welfare programs (see the next section for a description of welfare programs) encourage family break-ups by awarding more generous benefits, such as housing, food stamps, and child care assistance, to single mothers. The Welfare Reform Act of 1996, which implemented stricter eligibility requirements and limits on the number of years someone can be on welfare, has been a step in the right direction, and has provided more families with the incentive to get off welfare and work. But has it done enough?