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US Census Bureau
September 26, 2003

2002 Income and Poverty Statistics


Poverty, Income See Slight Changes; Child Poverty Rate Unchanged, Census Bureau Reports

The nation's official poverty rate rose from 11.7 percent in 2001 to 
12.1 percent in 2002 and median household money income declined 1.1 
percent in real terms from 2001 to $42,409 in 2002, according to reports 
released today by the U.S. Census Bureau. Median earnings increased 1.8 
percent for women who worked full-time, year-round and 1.4 percent for 
similar men, and the child poverty rate remained unchanged in spite of the 
recession.

"Alternative measures of income and poverty, which consider taxes and 
the value of noncash benefits, present a more mixed picture of the 
nation's economic situation," said Daniel Weinberg, chief of the Census 
Bureau's Housing and Household Economic Statistics Division.

Three of four alternative income definitions show no change in median
household income and one -- money income less taxes -- showed a real 0.8 
percent decline. All four show a reduction in income inequality.

In contrast to the official poverty measure, all six alternative poverty
measures developed by the Census Bureau in response to recommendations by
the National Academy of Sciences show no change in poverty rates between
2001 and 2002. Also presented are nine additional alternative sets of
estimates, each of which shows an increase in poverty rates between 2001
and 2002.

The alternative estimates, which deduct taxes from money income and add
the value of various noncash benefits (food stamps, school lunches,
housing subsidies, health programs and return on home equity), are
intended to provide a more complete measure of economic well-being than
the official income and poverty concepts, which are based solely on the
amount of money people or households receive during the calendar year.

The reports, Poverty in the United States: 2002 and Income in the 
United States: 2002, were released on the Internet. Accompanying them was
Supplemental Measures of Material Well- Being: Expenditures, Consumption, 
which presents a description of some possible next steps in the 
Census Bureau's decades-long investigation into the measurement of poverty.

Poverty Overview

- According to the official poverty measure, about 1.7 million more
people were in poverty in 2002 than in 2001 34.6 million versus 
32.9 million. These estimates reflect the effect of the recession, 
which began in March 2001 and ended in November of the same year.

- Five of the six alternative poverty measures developed in response to
the National Academy of Sciences recommendations show no significant 
change in the number of people in poverty between 2001 and 2002; the 
sixth shows the number in poverty rose by 1.0 million. Each of
the nine additional alternative measures show an increase in the number 
of people in poverty, ranging from 1.2 million to 1.4 million. 

- Both sets of alternative measures illustrate how estimates of the
poverty rate are sensitive to the method used. In comparison to the 
official estimate of 12.1 percent, all six of the NAS-based measures 
show somewhat higher poverty rates. On the other hand, nine other
alternative poverty measures based on alternative definitions of income 
show substantially lower rates of poverty, with the lowest estimate 
being 7.5 percent.

[an error occurred while processing this directive] - The poverty rate and number of families in poverty increased from 6.8
million in 2001 (or 9.2 percent of all families) to 7.2 million (or 
9.6 percent) in 2002.

- The poverty rates for children, those age 65 and over, non-Hispanic
whites, Asians, Hispanics, female-householder families, those in 
central cities or outside metropolitan areas and people in the 
Northeast, South and West did not change between 2001 and 2002.

- The number of people in severe poverty increased from 13.4 million in
2001 to 14.1 million in 2002, and the number just above the poverty 
threshold, 12.5 million, did not change.

- As defined by the Office of Management and Budget and updated for
inflation using the Consumer Price Index, the average poverty 
threshold for a family of four in 2002 was $18,392 in annual income; 
compared with $14,348 for a family of three; $11,756 for a family
of two; and $9,183 for unrelated individuals.

Race and Hispanic Origin

- The Current Population Survey used a new questionnaire in 2003 to
collect race information, asking individuals to report one or more 
races. Therefore, 2001 single-race figures are compared with two or 
more different figures for 2002, based on those who reported only one
race, and those who reported one or more races. (See U.S. Census Bureau 
Guidance on the Presentation and Comparison of Race and Hispanic-Origin 
Data.) 

- Among people who reported the single race of black in 2002, 24.1
percent were in poverty, higher than the 22.7 percent for those who 
reported black in 2001. The corresponding figure for those reporting 
black regardless of whether they reported any other races in 2002 was 
23.9 percent.

- The official measure shows poverty rates did not change for
non-Hispanic single race whites (8.0 percent), Asians (ranging from 
10.0 percent to 10.3 percent, depending on the four race definitions, 
not statistically different from each other) or Hispanics, who may be 
of any race (21.8 percent).

Age

- Under the official measure, children under 18 had a poverty rate of
16.7 percent in 2002, unchanged from 2001. The poverty rate for 
people 65 and older 10.4 percent in 2002 also did not change from 
2001. The rate for those ages 18 to 64 increased one-half a 
percentage point to 10.6 percent in 2002. (There was no statistical 
difference between the poverty rates for people 65 and over and 
people 18 to 64.)

Regions and States

- According to the official measure, the Midwest was the only region to
have an increase in its poverty rate between 2001 and 2002, from 9.4 
percent to 10.3 percent. The poverty rates in the Northeast (10.9 
percent), South (13.8 percent) and West (12.4 percent) did not 
change. The South has the highest poverty rate. (The poverty rates 
for the Midwest and the Northeast were not statistically different 
from one another.)

- The official poverty rates ranged from about 5.6 percent in New
Hampshire and Minnesota to about 18.0 percent in Arkansas, Mississippi, 
New Mexico, Louisiana, West Virginia and the District of Columbia, 
according to a three-year average (2000 to 2002). 

- Poverty rates remained unchanged in 41 states and the District of
Columbia, while they increased in Arkansas, Florida, Hawaii, 
Illinois, Maine, Michigan, Mississippi, South Carolina and Utah, 
based on comparisons of two sets of two-year averages, 2000-2001 and
2001-2002. 

Income 
Race and Hispanic Origin

- According to the money income measures, real median income did not
change for households with non-Hispanic householders who reported 
white as their only race ($46,900) or for households whose 
householder reported a single race of Asian ($52,626). Income 
declined for all other racial and ethnic groups.

- Income fell for households whose householder reported a single race
of black (a 3.0-percent decline to $29,026) and householders who 
reported only black or black and other races (a 2.5-percent decline 
to $29,177). Income also dropped for householders whose householder
reported only Asian or Asian and other races (4.0 percent to $52,285) 
and for Hispanic householders (2.9 percent to $33,103). 

- Using the four alternative measures, households with householders who
reported their race as Asian or native Hawaiian and other Pacific 
islander, regardless of whether they also reported other races, were 
the only ones to show a decline in real median household income 
between 2001 and 2002 under each of the alternative income measures.

Regions and States

- Under the money income measure, real median household income remained
statistically unchanged in three of the four regions between 2001 and 
2002. The exception was the Midwest, where income declined 2.0 percent. 
The South continued to have the lowest median household income of all 
four regions under this measure.

- Real median household income in Maryland, although not statistically
different from the median incomes for Alaska and Minnesota, was 
higher than the values for the remaining 47 states and the District 
of Columbia, using a three-year average (2000, 2001 and 2002). 
Conversely, median household income for West Virginia was lower than 
the incomes for the remaining 49 states and the District of Columbia.

- Real median household income rose in Oklahoma and declined in
Illinois, Michigan, Missouri, Ohio, Florida, Mississippi, North 
Carolina, Hawaii, Nevada, Oregon and the District of Columbia, based 
on comparisons of two-year-averaged medians (2000-2001 and 2001-2002).

Nativity

- Only households headed by a foreign-born noncitizen showed a decline
in income, of 3.9 percent.

Earnings and Per Capita Income

- The money income measure shows that real median earnings of women age
15 and older who worked full time, year-round increased to $30,203 
-- a 1.8 percent increase between 2001 and 2002. Men with similar 
work experience also saw their earnings increase 1.4 percent to $39,429. 
As a result, the ratio of female-to-male earnings for full-time, 
year-round workers was 77 cents for every dollar in 2002, which 
matches the all-time high reached in 2001.

- Under the money income measure, per capita income declined by 1.8
percent, in real terms, between 2001 and 2002, to $22,794, the first 
annual decline since 1991.

Income Inequality

- Using money income only, income inequality -- the gap between rich 
and poor -- showed no change when measured by the Gini index or 
household quintile shares.

- However, using the four alternative income definitions, income
inequality declined over the 2001-2002 period. The Gini index 
declined and the share of aggregate household income increased for 
households in the middle 60 percent of the income spectrum and 
declined for the highest 20 percent.

The estimates in the income and poverty reports are based on the 2001,
2002 and 2003 Current Population Survey's annual social and economic
supplement. As in all surveys, the data are subject to sampling
variability and other sources of error.

This document is not necessarily endorsed by the Almanac of Policy Issues. It is being preserved  in the Policy Archive for historic reasons.

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