Review and Special Articles

The Rising Prevalence of Severe Poverty in America

A Growing Threat to Public Health
Steven H. Woolf, MD, MPH, Robert E. Johnson, PhD, H. Jack Geiger, MD, MS Background: The U.S. poverty rate has increased since 2000, but the depth of poverty experienced by Americans has been inadequately studied. Of particular concern is whether severe poverty is increasing, a trend that would carry important public health implications. Methods: Income-to-poverty (I/P) ratios and income decits/surpluses were examined for the 1990 2004 period. The severely poor, moderately poor, and near-poor were classied as those with I/P ratios of less than 0.5, 0.5 to 1.0, or 1.0 to 2.0, respectively. Income decits/surpluses were classied relative to the poverty threshold as Tier I (decit $8000 or more), Tier II (decit or surplus less than $8000), or Tier III (surplus more than $8000). Odds ratios for severe poverty and Tier I were also calculated. Severe poverty increased between 2000 and 2004 those with I/P ratios of less than 0.5 grew by 20%, and Tier I grew by 45% to 55%while the prevalence of higher levels of income diminished. The population in severe poverty was over-represented by children (odds ratio [OR]1.69, condence interval [CI]1.631.75), African Americans (OR2.84, CI2.74 2.95), and Hispanics (OR1.64, CI1.58 1.71).

Results:

Conclusions: From 2000 to 2004, the prevalence of severe poverty increased sharply while the proportion of Americans in higher income tiers diminished. These trends have broad societal implications. Likely health consequences include a higher prevalence of chronic illnesses, more frequent and severe disease complications, and increased demands and costs for healthcare services. Adverse effects on children warrant special concern. The growth in the number of Americans living in poverty calls for the re-examination of policies enacted in recent years to foster economic progress.
(Am J Prev Med 2006;xx(x):xxx) 2006 American Journal of Preventive Medicine

Introduction
overty is of great concern to the public health community because of its inuence on health status and access to care.1 The poor account for a growing proportion of Americans. Although the nations poverty rate declined in the 1990s, since 2000 the United States Census Bureau (USCB) has reported a steady rise in the poverty rate, from 11.3% in 2000 to 12.7% in 2004.2 Children experienced the sharpest increase; the proportion living in poverty rose by 13.4%, from a rate of 15.7% (11.1 million) in 2000 to 17.8% (13.0 million) in 2004.2,3 Other economic trends paint a more positive picture, suggesting that economic growth is bringing greater
From the Departments of Family Medicine (Woolf, Johnson), Epidemiology and Community Health (Woolf), and Biostatistics (Johnson), Virginia Commonwealth University, Richmond, Virginia; Department of Community Health and Social Medicine (Geiger), City University of New York Medical School, New York, New York Address correspondence and reprint requests to: Steven H. Woolf, MD, MPH, Department of Family Medicine, Virginia Commonwealth University, 1200 East Broad Street, P.O. Box 980251, MCV Station, Richmond VA 23298-0251. E-mail: swoolf@vcu.edu. The full text of this article is available via AJPM Online at www.ajpm-online.net.

afuence to the population. In recent years, the Bush administration has reported falling unemployment rates and increases in after-tax income, retail, manufacturing, and overall productivity.4 This good economic news is tempered by signs of growing income inequality. The Gini index,5 a key measure of inequality, has increased by 3.6% from its most recent low of 0.450 in 1995 to 0.466 in 2004.2 Over the same time period, increases have also been noted consistently in other measures of income inequality, such as the ratio between the highest and lowest quintiles of household income, the Theil and Atkinson indexes, and the mean logarithmic deviation of income.2,5 Although the evidence is clear that more Americans are poor, how deeply they have sunk into poverty is less certain. We found no current reports on the topic. Our null hypothesis, supported by reports of low unemployment and higher incomes, was that most of the poor are concentrated just below the poverty threshold and that a diminishing proportion of Americans suffer from severe, abject poverty. The alternativethat the poor are slipping more deeply into povertywould have ominous implications for individuals and families and for the vibrancy
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Am J Prev Med 2006;xx(x) 2006 American Journal of Preventive Medicine Published by Elsevier Inc.

0749-3797/06/$see front matter doi:10.1016/j.amepre.2006.06.022

of the American community and economy.6,7 To clarify which is the case, this analysis grouped the poor into tiers to quantify the depth of poverty in America and to examine temporal trends over time.

poverty and the only metric that has been tracked consistently over the comparison period.

Results Income-to-Poverty Ratios

Poverty increased in the United States after 2000, but the most dramatic increases occurred among the severely poor. Between 2000 and 2004, the proportion of Americans with I/P ratios 0.5 (an income below 50% of the poverty threshold) increased from 4.5% to 5.4%, a relative increase of 20% (Figure 1, Panel A). The proportion of Americans in moderate poverty (I/P ratio of 0.5 to 1.0) increased less dramatically, from 6.8% to 7.3%, a relative increase of 7.3%. The increase in the near-poor (I/P ratios of 1.0 to 2.0) was modest (an absolute and relative increase of 0.5% and 2.8%, respectively) and erratic (Figure 1, Panel B). After 2000, the proportion of Americans with the largest incomes (I/P ratios 2.0) decreased by 1.9% (Figure 1, Panel C). In 2002 to 2004, the decline was concentrated among those with I/P ratios of 2.0 to 6.0; the proportion of families with I/P ratios 6.0 remained stable. The size of the middle and upper classes and the rise in poverty rates following 2000 represent a reversal in trends observed during the more favorable economic period of 1993 to 2000. During that time, the proportion of Americans below the poverty threshold declined by 25%, from 15.1% to 11.3%,2 and the proportion with the largest incomes (I/P ratios 2.0) experienced steady growth (Figure 1, Panel C). After 2000, the absolute number of Americans with I/P ratios below 0.5 grew by 30% (3.6 million), from 12.1 million people in 2000 to 15.6 million in 2004; the number with I/P ratios of 0.5 to 1.0 grew by 12% (2.3 million), from 19.0 million in 2000 to 21.3 million in 2004.26,27

Methods
The analysis examined the 1990 2004 period to put trends after 2000 into historical context. The study used two measures of the depth of poverty that adjust for ination and have been tracked consistently by the U.S. Census Bureau (USCB): (1) the income-to-poverty ratio (I/P ratio), and (2) the income decit/surplus. Both measures are anchored to the poverty threshold,8 which the USCB updates annually to account for changes in the Consumer Price Index. The income-to-poverty ratio (I/P ratio) is calculated by dividing individual income by the corresponding poverty threshold. The proportion of Americans with an I/P ratio of 2.0 is reported annually for seven subgroups: ratios of 0.5, 0.50 to 0.75, 0.75 to 1.0, 1.0 to 1.25, 1.25 to 1.50, 1.50 to 1.75, and 1.75 to 2.0.9 People were classied as severely poor, moderately poor, or near-poor if their I/P ratios were 0.5, 0.5 to 1.0, or 1.0 to 2.0, respectively. The analysis also examined the proportion of Americans with an I/P ratio of 2.0, which was reported by subgroup beginning in 2002. The income decit/surplus is the absolute difference in dollars between household income and the poverty threshold. The study examined USCB reports for 1990 through 2004,2,10 23 which present income decit/surplus data for 20 categories: those with an income decit of $8000 below the poverty threshold, nine strata for income decits $8000, nine strata for income surpluses of $8000, and those with an income surplus of $8000 above the poverty threshold (see online data table at www.ajpm-online.net). These data were aggregated into four poverty tiers: Tier I (decit of $8000), Tier IIa (decit $8000), Tier IIb (surplus $8000), and Tier III (surplus of $8000). Because the USCB reports income decit/surplus data separately for families and for unrelated individuals (people who are not members of families), this study uses the same framework for reporting the results. Income decit/surplus data for unrelated individuals were included only for 1996 and beyond, because the USCB provides incomplete source data for 1990 through 1995. The study examined the demographic characteristics of the poverty tiers for 2004, the most recent year for which data are available. Odds ratios and 95% condence intervals were calculated to determine which characteristics were associated with signicantly greater risk of experiencing severe poverty. To explore temporal trends, odds ratios for 2004 were compared with those for 2002 and 2003. Relying on the ofcial poverty threshold to measure the prevalence of poverty can be criticized. Many households have difculty meeting basic expenses at incomes well above the poverty threshold.24 The poverty threshold derives from the Orshanksy formula,25 devised in the 1960s based on the assumption that families spend one third of their income on food, a condition that no longer applies. Other criticisms of the poverty threshold are detailed below. This study used the poverty threshold for its calculations because it is the ofcial government measure of

Income Decits and Surpluses

Between 2000 and 2004, the mean income decit for the poor grew by 14% among families (from $6820 to $7775) and by 20% among unrelated individuals (from $4388 to $5259), also reecting an increase in severe poverty. The only category of Americans to increase in size was that with the greatest income decit (Tier I, $8000 below the poverty threshold) (Figure 2, Panel A). The proportion of families in Tier I increased by 45%, from 3.1% in 2000 to 4.5% in 2004, and the proportion of unrelated individuals in Tier I increased by 55%, from 4.4% to 6.8%. In absolute numbers, Tier I grew by 1.2 million families (52%) and 1.3 million unrelated individuals (63%) between 2000 and 2004. From 1990 to 2004, the proportion of U.S. families in Tier I almost doubled (from 2.3% to 4.5% of families). The proportion of the population in Tiers II and III decreased after 2000, a trend that began for Tier II
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10 9 8 7 6

People below (<1.0) poverty threshold (Panel A)

0.51.0

< 0.5 5 4

After 2000, the proportion of families in Tier III (income surplus of $8000) began to diminish slightly, from 82.6% to 81.7% (Figure 2, Panel C). The proportion of unrelated individuals in Tier III declined from 59.5% in 2000 to 57.5% in 2003 and appeared to recover in 2004 (to 58.4%). Although Tier III decreased in size after 2000, the mean income surplus for Tier-III families increased by 9%, from $56,427 to $61,481 (and by 1% for unrelated individuals).

Demographic Patterns
The near-poor: 1.02.0 times the poverty threshold (Panel B)

21 Proportion of Americans (%)

20

19 1.02.0 18

17

72

Middle and upper class: > 2.0 times the poverty threshold (Panel C)

70 >2.0 68

66

64

62

Year

Figure 1. Proportion of Americans below or near the poverty threshold, 1990 2004. Data are derived from U.S. Census Bureau9 and analyzed as described in the text. The poverty threshold is dened by the U.S. Census Bureau based on family size (from one person to nine or more people) cross-classied by presence and number of family members aged 18 years (from no children present to eight or more children present). Unrelated individuals and two-person families are further differentiated by age of reference person (65 years and 65 years). Poverty thresholds for each year are available at www.census.gov/hhes/www/poverty/threshld.html.

The population experiencing severe poverty was overrepresented by children, African Americans, and Hispanics (Tables 1 and 2). As of 2004, the odds of having an income below 50% of the poverty threshold were 69% higher for children aged 18 years than for adults (aged 18), and were doubled for children aged 5 years (Table 1). Families with children were 4 times more likely to have Tier-I incomes than were other families (Table 2). Older adults (aged 65) were less likely than younger persons to experience severe poverty. Compared with other races, African Americans in 2004 were almost three times as likely to have an I/P ratio of 0.5 (Table 1); African-American householders were more than three times as likely to have Tier-I incomes (Table 2). The odds of having an I/P ratio below 0.5 were 64% greater for Hispanics than for others (Table 1), and Hispanic householders were more than twice as likely to have incomes in Tier I (Table 2). Whites and Asians were less likely to experience severe poverty. Data from the 20022004 period suggest that odds ratios for children and minorities diminished during this period. Fragmented family units face a heightened risk of severe poverty. Compared to other families, the odds of having a Tier-I income in 2004 were almost seven times higher among families led by a female householder with no spouse (Table 2). Unrelated individuals people not in familieswere twice as likely to have an I/P ratio 0.5 (Table 1).

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Discussion and Conclusions

A rise in poverty rates is important because of the enormous difculties faced by the poor in meeting the most basic human needs (e.g., food security, clothing, housing, health) and in obtaining the means to escape their conditions (e.g., education, jobs, higher earnings). This suffering alone is sufcient cause for concern among those who advocate social justice, but rising poverty rates are also relevant to those who reject a moral duty to help the poor. The global competitiveness of the U.S. economy suffers if workers are too poor to obtain an education and modern job skills, the government loses tax revenue and spends more on
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early in the 1990s (Figure 2, Panel B). From 1990 to 2004, the proportion of families in Tiers IIa and IIb fell by one third (from 8.4% to 5.7% and from 12.2% to 8.1%, respectively). The rate of decline in Tiers IIa and IIb was similar after 1996; these tiers were therefore treated as a single group (Tier II) in further analyses.
Month 2006

Tier I: $8000 income deficit (Panel A) 8

0 Tier I: families Tier I: unrelated individuals

Proportion of families and individuals* (%)

Tier II: < $8000 income deficit/surplus (Panel B) 30

20

10

0 Tier IIa: families Tier IIb: families Tier IIa: unrelated individuals Tier IIb: unrelated individuals

Tier III: $8000 income surplus (Panel C) 85

75

65

55

public assistance because of poverty, and communities fall victim to urban decay, crime, and unrest.6,7 This study found that the recent increase in poverty rates is explained largely by a dramatic upsurge in severe poverty, refuting our null hypothesis. The rise in severe poverty after 2000 was substantial. In relative terms, the proportion of Americans with I/P ratios less than 0.5 grew by 20%, and Tier I grew by 45% and 55% among families and unrelated individuals, respectively. In absolute terms, the number of Americans with I/P ratios less than 0.5 grew by 30%, and the number of families and unrelated individuals in Tier I grew by 52% and 63%, respectively. In contrast, increases in moderate poverty were less striking. Indeed, Tier II has been shrinking since the early 1990s. The fall in the proportion of families and unrelated individuals with incomes within $8000 of the poverty threshold displayed a similar pattern for those above (Tier IIb) and below (Tier IIa) the poverty threshold (Figure 2, Panel B). The 18 income strata within Tier II (see Methods) exhibited similar trends and rates of decline, which were collectively distinct from the temporal patterns observed for Tiers I and III (Figure 2, Panels A and C). The population with an income decit of at least $8000 below the poverty threshold therefore appears to be vulnerable to a different experience than those with incomes closer to the poverty threshold. Therefore, analyses that focus only on the population below the poverty line, mixing Tier I with members of Tier II, may lose sight of such trends. The growth in Tier I, set against reductions in Tiers II and III, suggests that severe poverty may be producing a sinkhole effect on income. Just as a sinkhole causes everything above it to collapse downward, families and individuals in the middle and upper classes appear to be migrating to lower income tiers that bring them closer to the poverty threshold. Relative to 2000, by 2004 Tiers II and III had experienced net losses of 0.5% and 0.9% of American families, respectively, whereas Tier I had experienced a net growth of 1.4% of families. The 2.4% absolute increase between 2000 and 2004 in the proportion of unrelated individuals in Tier I was explained by a 1.3% reduction in Tier II and a 1.1% reduction in Tier III. One would expect this sinkhole effect to be accompanied by an overall decrease in median income in the

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Tier III: families Tier III: unrelated individuals

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2000

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Figure 2. Proportion of families and unrelated individuals in income decit/surplus Tiers I, II, and III, 1990 to 2004. Data are aggregated from the table posted online (abstracted from U.S. Census Bureau data2,10 23) and analyzed as described in the text. Unrelated individuals are persons who are not members of families. The U.S. Census Bureau does not provide complete data for unrelated individuals from before 1996. Tier I, income decit $8000; Tier IIa, income decit $8000; Tier IIb, income surplus $8000; Tier III, income surplus $8000.

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Table 1. Demographic characteristics of U.S. population, by I/P ratio, 2004 (nthousands) I/P ratio Odds ratio Severely poor Moderately poor Near poor >6.0 <0.5 0.51.00 1.002.00 2.06.0 (n54,907) (95% CI) for severe povertya (n15,637) (%) (n21,360) (%) (n53,816) (%) (n144,885) (%) (%) Age (years) 5 18 1864 65 Female Race/ethnicity Whiteb African Americanb Asianb Hispanic (of any race/ethnicity) Householder Unrelated individualsc
a b

12 36 58 6 56 65 27 3 21 36 30

10 35 53 12 56 71 22 3 27 40 24

8 29 52 18 54 77 16 4 23 40 22

6 24 64 12 50 82 11 4 12 38 15

4 17 74 9 48 87 5 6 5 40 10

1.94 (1.852.04) 1.69 (1.631.75) 0.83 (0.800.86) 0.44 (0.420.48) 1.23 (1.191.27) 0.43 (0.420.45) 2.84 (2.742.95) 0.81 (0.740.88) 1.64 (1.581.71) 0.88 (0.850.91) 2.30 (2.222.39)

Odds ratio for having an I/P ratio 0.5; referent populationI/P ratio 0.5. Individuals who reported this race/ethnicity and no other additional category. African Americans classify themselves as black in U.S. Census Bureau surveys. c Individuals who are not in primary families (the householders family) or unrelated subfamilies. Source: U.S. Census Bureau.14 CI, condence interval; I/P, income to poverty.

United States, which was indeed the case. The USCB reports that U.S. household income, adjusted for ination, declined by 3.6% between 2000 and 2004, from a median of $46,058 to $44,389.2 Our ndings have not, to our knowledge, been published previously. Using the search terms severe poverty and deep poverty, we searched Social Sciences Citation Index and PubMed from 2001 forward and found no articles on the topic. A Google search retrieved information about severe poverty globally but only USCB reports and statements by advocacy organi-

zations provided information that relate to the United States. The USCB does announce year-to-year increases in the poverty rate at annual press briengs, and news reports have noted the steady rise in rates after 2000 but the media have not emphasized the trend. Between 2002 and 2005, the Washington Post and New York Times ran eight news articles about the census statistics, ranging from 400 to 1410 words in length, but the articles devoted a median of two sentences to the temporal increase in the overall poverty rate.28 35

Table 2. Demographic characteristics of U.S. families,a by income tier, 2004 (n thousands) Tier I Income >$8000 below poverty, threshold (n3444) (%) Families with children Race/ethnicity of householder Whitec African Americanc Asianc Hispanic (of any race/ ethnicity) Families with female householder and no spouse
a b

Tier II Income $0$7999 below/above poverty threshold (n10,657) (%) 60 74 19 3 24 38

Tier III Income >$8000 above poverty threshold (n62,917) (%) 48 84 9 4 10 13

Odds ratio for Tier I (95% CI)b 4.31 (3.954.70) 0.36 (0.340.39) 3.54 (3.283.82) 0.69 (0.560.84) 2.35 (2.172.55) 6.76 (6.307.25)

81 64 30 3 24 57

The U.S. Census Bureau does not publish demographic data for unrelated individuals by income decit/surplus categories. Odds ratio for having Tier I income; referent population: Tiers II and III combined. c Individuals who reported this race and no other additional category. African Americans classify themselves as black in US Census Bureau surveys.

Month 2006

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The USCB press briengs have largely omitted discussion of severe poverty. The only brieng to comment on severe poverty after 2000 occurred on September 26, 2003, when 2002 data were released. By that time, the proportion of individuals with I/P ratios less than 0.5 had grown from 4.5% in 2000 to 4.8% in 2001 and to 4.9% in 2002.9 The USCB spokesman said only this: The 14.1 million people with incomes less than half their thresholds represent 4.9% of the population . . . percentages not different from 2001.36 Nothing further was said about severe poverty, and the topic was omitted entirely from press briengs in 2004 and 2005 (although the proportion had risen to 5.3% by 2003 and 5.4% in 2004).37,38 The press briengs were recently investigated by the U.S. Government Accountability Ofce.39 Reecting what they hear at press briengs, journalists covering the census reports have also reported little about severe poverty. A New York Times editorial on August 31, 2004 did say: [T]he positive news on the number of people in poverty masks an alarming trend. The number of people in extreme povertythat is, subsisting on less than half the income dened as the poverty linestands at 15.3 million, higher than at any time since the Census Bureau began collecting data 28 years ago.40 A year later it had reached 15.6 million.2 Images from New Orleans in late 2005 following Hurricane Katrina brought temporary attention to the plight of the severely poor, but even these reports said little about the growth of the problem throughout the country. This studys ndings are consistent with a recent Federal Reserve Board analysis of the net worth of U.S. families, which it conducts every 3 years. Net worth is the difference between family assets and liabilities. For the 20012004 period, the Federal Reserve reported that median net worth rose by 1.5%, considerably less than in 1998 2001 (10.3%). Although median net worth increased by 4% for families above the 90th percentile for income (from $887,900 to $924,100), median net worth declined by 11% (from $8400 to $7500) among families below the 20th percentile and by 13% (from $39,600 to $34,300) among families between the 20th and 40th percentiles. The Federal Reserve reported that mean income for all U.S. households, adjusted for ination, decreased by 2.3%, from $72,400 to $70,700, consistent with the sinkhole effect that we observed.41 Similarly, an analysis for the Brookings Institution found that only the top 10% of the income distribution has experienced growth in real wages and salaries equal to or greater than the rate of growth in the economy.42 Several methodologic considerations pertain to our work. First, the increase in poverty rate observed in this study may be temporary; data beyond 2004 could not be assessed. A recession occurred in 2001, and poverty rates climbed and then stabilized following recessions
6

in 1969, 1973, 1981, and 1990.2,43 Second, the study relied entirely on USCB data to measure income trends; such data are the nations only primary benchmark for tracking poverty rates. Third, census data are subject to sources of error documented by the USCB.44 Fourth, although the poverty threshold is adjusted for ination, an income decit of $8000 means less over time. Fifth, the highest income categories (I/P ratios above 2.0, and an income surplus of at least $8000) are broad and encompass the middle and upper class. Sufcient data were lacking to stratify incomes within this large group. Although as a whole this group decreased as a proportion after 2000 (Figures 1 and 2), a highly afuent subgroup may have increased in size. The USCB reports that the proportion of households with incomes of at least $250,000 increased from 1.2% in 200045 to 1.5% in 2004,46 and the ratio between the income of households at the 90th and 10th percentiles increased from 10.58 to 11.07.2 This concentration of wealth might explain the aforementioned increase in indices of income inequality (e.g., Gini coefcient) and the observation that Tier-III families decreased as a proportion but experienced a 9% increase in their average income surplus. Fifth, this study did not explore the causes of the observed trends or potential remedies. Lower wages and investment earnings and changes in social programs may account for lower income-adjusted incomes. Like its predecessors, the recession of 2001 would have been expected to fuel poverty by causing higher unemployment, a reduction in work hours, and stagnation of family income.47 The economic recovery that often follows a recession can mitigate these conditions, although some contend that changes in public policies (e.g., reduced welfare assistance and a weaker social safety net) and unfavorable job opportunities may account for the continued growth in poverty after 3 years of economic recovery.48 The increase in severe poverty and the overrepresentation of children that were observed in this study may also relate to demographic characteristics among immigrants, who accounted for 42% of U.S. population growth in the 2000 2005 period.49 Other possibilities for increased poverty include decreased earnings by parents, diminished real value of income-transfer programs (welfare, or temporary aid to needy families), and increases in female single-parent households.50 The study did not explore potential solutions to poverty, such as education; we recently demonstrated that almost 200,000 U.S. deaths could be averted each year if all adults had the life expectancy of those who attended college.51 Finally, these analyses are anchored to the poverty threshold, a metric with known limitations. As noted earlier, the Orshansky formula incorporates outdated assumptions about living expenses. Food now accounts
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for approximately one sixth of family budgets,52 and the formula ignores modern-day expenses such as child care and higher costs for housing and transportation. The threshold makes no adjustment for geographic variation in the cost of living. In communities such as Washington DC and San Francisco, the average rental for a one-bedroom apartment exceeds the entire poverty threshold for an individual or couple.53,54 Although these factors suggest that the federal poverty threshold underestimates the prevalence of poverty, the exclusion of some income categories in the Orshanksy formula might serve to inate the poverty rate. For example, the formula excludes cash and noncash transfers received by the poor, such as public assistance (e.g., government insurance, food stamps, housing aid, tax credits), tax benets, and gains from stock holdings. Experimental alternative poverty measures that have been suggested to correct for the deciencies in the Orshansky formula include some that generate higher prevalence estimates for poverty (e.g., measures proposed by the National Academy of Sciences) and some that generate lower estimates (e.g., measures considered by the USCB).5558 Others advocate the use of relative, rather than absolute, measures of poverty.5,59 These considerations speak to the imprecision of the ofcial poverty threshold in quantifying the true poverty ratefor 2003, when the ofcial poverty rate was 12.5%, the estimated poverty rate from experimental measures ranged from 7.4% to 14.5%57 but this imprecision bears little on the temporal trends reported here because the magnitude of the variation has held constant over time. From 1987 to 2003, alternative measures that yield lower estimates for the poverty rate followed the same slope as did the ofcial measure.57 The exclusion of cash and noncash assistance from the ofcial measure could conceivably act as a confounding variable in our key ndingthat the growth of severe poverty was greater than for moderate poverty had the severely poor received more of such assistance. There is little evidence of such a difference, however. For example, in 2004, the severely poor (I/P ratio of less than 0.5) and the moderately poor (I/P ratio of 0.5 to 1.0) differed little in their receipt of cash or noncash transfers (93% vs 95%, respectively)60 or Medicaid (76% vs 75%, respectively).61 Differences noted for some forms of aid, such as food stamps (56% vs 47%, respectively),62 were unlikely to account for the dramatic differences in the growth of moderate and severe poverty observed in this study. The risk of slipping into severe poverty is not shared equally across the population. This study found that African Americans and Hispanics face a greater risk than do whites or Asians. In 2004, African Americans accounted for 9% of those with an I/P ratio of greater than 2.0,27 but they constituted an increasing proportion of those with progressively lower incomes (16%,
Month 2006

22%, and 27%, respectively, of Americans with an I/P ratio of 1.0 to 2.0, 0.5 to 1.0, and less than 0.5). The burden of supporting a family in severe poverty falls disproportionately on minorities. In 2004, African Americans led the households of 9% of families in Tier III, but 19% of families in Tier II and 30% of families in Tier I. Hispanics led 10% of families in Tier III but 24% of families in Tiers I and II. The most troubling nding is that the risk of severe poverty is greater among children than among adults. Children aged less than 5 years face the greatest risk (Table 1). In 2004, one of three Americans with incomes less than 50% of the poverty thresholda total of 5.6 million peoplewas a child. The risks are enormous among minority children: Children account for 44% and 45%, respectively, of Hispanic and African Americans with I/P ratios less than 0.5.27 Families with children account for 48% of families in Tier III and 81% of families in Tier I (Table 2). The public health implications of increasing poverty are profound, given how strongly social class is linked with premature mortality, disease, and mental illness.1,63 67 The poor have greater exposure to risk factors, such as those caused by homelessness, substandard housing, and environmental pollutants.68,69 They experience greater rates of smoking, physical inactivity, and obesity,63,70 in part because impoverished neighborhoods are not conducive to healthy lifestyles (e.g., having built environments for walking71 and supermarkets that offer healthy food choices72); these communities are also targets for the promotion of cigarettes, alcoholic beverages, and fast foods.7375 The poor lack jobs that offer health insurance and cannot afford to purchase insurance themselves.76 Fully 31% of those below the poverty threshold are uninsured, and 23% report no usual source of care.63 Cost remains a barrier even among those eligible for Medicaid or indigent services, due to greater cost shifting to patients and out-of-pocket expenditures.7779 These barriers often impel the poor to forego care or to seek it episodically for acute problems, missing opportunities for prevention and allowing disease complications to intensify.80 The quality of care that they do receive is compromised by the fragmented infrastructure in underserved communities, where facilities and clinicians are often lacking in number, resources, and cultural sensitivity.81,82 For these various reasons, the poor on average receive inferior health care, have worse health status, and require greater use of resources.63,83,84 Emergency department visits and the length of hospital stays among the poor are more than twice those of the general population.63 These health effects result partly from inadequate income but also reect other interrelated characteristics of the poor, such as education, race, ethnicity, and environmental factors. Inadequate education, which often accompanies poverty, is a barrier to making wise
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personal health choices and to advancing to suitable jobs that provide higher earnings and health insurance. Health status and health care differ by race and ethnicity, even after adjustment for socioeconomic status.85,86 Given that the population in poverty is over-represented by immigrants, some might wonder whether the link between poverty and health is refuted by the healthy immigrant phenomenon, in which new immigrants enter the country in comparatively better health than their native-born counterparts or than immigrants who have lived in the United States for more than 10 years.87,88 This phenomenon may result in part from selection factors in the population who choose to emigrate and from conditions that cause deterioration in health as residents in the United States (e.g., acculturation, adoption of unhealthy behaviors, poor access to healthcare services). Exposure to poverty is likely to exacerbate these conditions and to accelerate the process by which the health of immigrants deteriorates. The adverse health experienced by those below the poverty threshold is amplied for severe poverty. The relationship between income and life expectancy climbs steeply at the extremes of poverty and plateaus at higher income levels.89 Health outcomes for the severely poor are worse than for those in moderate poverty.90,91 The rising prevalence of severe poverty, which is reported here, is therefore cause for concern. As the number of people in severe poverty increases, we would expect growth in the prevalence of chronic illness, more frequent and severe complications, and greater demands and costs for healthcare services. The number of uninsured will grow, further burdening public programs (e.g., Medicaid) and facilities for indigent care. Severe poverty also threatens the economy: The severely poor cannot contribute to a vibrant workforce, and their health needs require society to pay higher taxes or insurance premiums to offset treatment costs. Perhaps the most lasting consequences are for children, the age group that we found to be at greatest risk for severe poverty. Children are especially vulnerable to harm from severe poverty because of its inuences on perinatal outcomes, growth, nutrition, parenting, safety, development, emotional health, access to health care, adolescent pregnancy, cognition, and educational success.50,9294 Children exposed to severe poverty are at greater risk of experiencing unemployment, learning disabilities, mental illness, physical disease, substance abuse, and crime as adults.95103 They are also more likely to remain in poverty as adults,104 thereby perpetuating the cycle for their children.105,106 According to one report, only 6% of children who grow up in the lowest quintile of income attain the highest income quintile as adults (compared to 42% of those who grow up in the highest income quintile).104 In recent years, government policy for fostering upward mobility among the lower and middle classes has been to promote vibrant commerce as a vehicle for
8

job creation and to reduce outlays for social services to nance tax cuts and other incentives to grow the economy. The ndings reported here suggest that this policy has improved incomes for only a small proportion of the populationprimarily the most afuent classwhile poverty rates at the other end of the spectrum have increased. Millions of Americans, overrepresented by children and minorities, have entered conditions of extreme poverty. After 2000, Americans subsisting under these conditions grew as a class more than any other segment of the population. Potential solutions to poverty are formidable and politically difcult,6,7,107,108 but the rst step is to recognize the problem, which to date has received little exposure, and its implications for public health and society. Policymakers should consider our data in judging whether policies enacted in recent years have helped or hindered the public.
No nancial conict of interest was reported by the authors of this paper.

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Table 1. Number of families and unrelated individuals, by income decit/surplus, 1990 - 2004

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Table 1. Continued

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