US Poverty Rate by State

Why Are Some States So Poor and Others So Rich?

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U.S. poverty is determined by the federal poverty threshold. The U.S. Census Bureau calculates it each year to report how many Americans live in poverty. The chart below shows the U.S. poverty rate by state.

U.S. Poverty Overview

According to the U.S. Census, the official poverty rate in 2018 was 11.8%. That's down from 15.1% in 2010, the highest since the recession. The record was 22.4% in 1959. Poverty levels decreased significantly after President Lyndon Johnson's War on Poverty programs.

In 2018, 38.1 million Americans lived in poverty. That's lower than the 46.7 million in 2014, which was the highest number in U.S. history. 

  • More than half (56%) of Americans living in poverty were female, while 44% were male.
  • Over 40% of those living in poverty were white, while 28% were Hispanic, 23% were Black, and 5% were Asian.
  • Research shows there is a high correlation between education and income. The poverty data show this clearly. Only 9% of adults living in poverty had college degrees.
  • Almost 15% of adults living in poverty did not graduate from high school. Another 21% had a high school degree but never attended college. Almost 13% had attended college but didn't receive a degree.
  • Sadly, 31% of those living in poverty were children. That's 11.9 million children under age 18. Another 13%, or 5.1 million, were aged 65 years or older.
  • More than 83% of those living in poverty were born in the United States. Only 11% were not citizens.
  • Of those living in poverty, 7% worked full-time for the whole year. At least 14% worked part-time for the whole year. Another 35% worked less than a week.
  • The Temporary Assistance for Needy Families (TANF) is the nation's welfare program. In September 2018, it served 2.8 million people. That's less than 10% of the 38 million living in poverty. Only 2.1 million children received welfare. That's less than 20% of the 11.9 million children who needed it. 

U.S. Poverty by State

The Census provides poverty by state as a two-year average. The chart below shows the percent of people living in poverty in each state as of 2017 and 2018.

Across the United States, 44% of those living in poverty were in the South. Eight of the country's poorest states are in the South. Another 23% of those in poverty lived in the West and 18% were in the Midwest. Another 15% lived in the Northeast.

Why Some States Have So Much Poverty

Six of the 10 states with the most poverty are in the South. Here are 2018 poverty rates for the 10 poorest states:

  • Mississippi – 19.6%
  • Louisiana – 19.0%
  • New Mexico – 16.6%
  • Alabama – 16.0%
  • West Virginia – 15.9%
  • Arkansas – 15.9%
  • Kentucky – 15.7%
  • Georgia - 14.8%
  • District of Columbia – 14.7%
  • Texas – 13.7%

It's no surprise that these states also have the lowest incomes in America. One reason is that the region has long been dependent on agriculture. It had textile and clothing manufacturers that were located near cotton fields. But over time, foreign countries could make the products more cheaply. Their manufacturing costs were low enough to compensate for added transportation expenses. As a result, China and India took these higher-paying jobs. 

Why Some States Have So Little Poverty

States with low levels of poverty are in the northeast. Six of the 10 richest states are near a major U.S. East Coast city. They benefit from having major world-class research universities. As a result, highly-educated people live in those cities. There is a high correlation between education and income.

Here is a list of the 10 states with the lowest poverty rates:

  • New Hampshire – 6.1%
  • Utah – 6.9%
  • Delaware - 7.4%
  • Kansas - 7.5%
  • Minnesota – 7.9%
  • Maryland – 8.0%
  • New Jersey – 8.2%
  • Washington - 8.6%
  • Wisconsin - 8.6%
  • Massachusetts - 8.7%

Poverty is low in five of these states because they also have the country’s best economies. They are Maryland, Massachusetts, New Jersey, New Hampshire, and Washington.

Four states have the fastest-growing economies. They are Minnesota, Hawaii, Iowa, and New Hampshire. A growing economy helps reduce poverty.

Impact of Minimum Wage

The District of Columbia has the highest minimum wage of $13.25 an hour. It's also the fourth-richest city in the country. States with a high cost of living will have low levels of poverty. The poverty threshold is a national average. People with incomes below that level can't afford to live in these states.

Many argue that the minimum wage should provide a living wage. That's enough to cover food, clothing, and shelter. The common budgeting standard says you should spend no more than 30% of income on housing. federal poverty level The minimum wage is the lowest legal wage companies can pay workers. The U.S. current national minimum wage is $7.25 per hour. For a full-time job, that equates to $15,080 a year. That is more than thefor a single person.

Congress established the minimum wage to stop employers from exploiting desperate workers. In 2016, the Pew Research Center found 2.7% of working Americans earn minimum wage or less. More than half of them are between 16 and 24, and the majority work in the hotel and restaurant business.

In 2018, there are 29 states plus the District of Columbia with rates above the federal level. In those states, you can afford a higher rent.

Article Sources

  1. U.S. Census. "Historical Poverty Tables: People and Families - 1959 to 2018," Download "Table 2. Poverty Status of People by Family Relationship, Race, and Hispanic Origin." Accessed August 12, 2020.

  2. U.S. Census. "Income and Poverty in the United States: 2018," Author's calculations from downloaded "Table B-1. People in Poverty by Selected Characteristics: 2017 and 2018." Accessed August 12, 2020.

  3. U.S. Health and Human Services. "TANF and SSP: Total Number of Recipients for Fiscal Year 2019." Accessed August 12, 2020.

  4. U.S. Health and Human Services. "TANF and SSP: Total Number of Child Recipients for Fiscal Year 2019." Accessed August 12, 2020.

  5. U.S. Census. "Income and Poverty in the United States: 2018," Download "Table 19. Percentage of People in Poverty by State Using 2- and 3-Year Averages: 2015-2016 and 2017-2018." Accessed August 12, 2020.

  6. Federal Reserve Bank of St. Louis. "Education, Income, and Wealth." Accessed August 12, 2020.