Poverty rates in US states: Why are some states so poor and others so rich?
Poverty in the United States is determined by the federal poverty threshold. Every year, the US Census Bureau calculates how many Americans live in poverty. The chart below shows the poverty rates in the US states.
According to the US Census, the official poverty rate in 2017 was 12.3%. In other words, 39.7 million Americans live in poverty. More than half or 56% are women. Unfortunately, 32% of the poor are children. This is 12.8 million children under the age of 18. Another 12% or 4.7 million people are 65 years of age or older. 9% of people have a disability. Two-thirds or 67% are white, 42% live in the south, 23% live in the west, and 19% live in the Midwest. Almost all or 83% were born in the United States. Only 11% are not citizens.
Even those who have jobs do not get rid of the protection of poverty. Of those living in poverty, 6% work full-time and work all year round. 14% of people are part-time all year round. Another 35% of people work only part of the year. Despite the success of the anti-poverty war, not many of these low-income earners have received benefits. TANF is an interim assistance program for poor families. In December 2017, the service population was 3.3 million. This is less than 10% of the poor. Among them, it serves 2.5 million children. Less than 20% of children need it.
Why are some states so poor?
Not surprisingly, these states have the lowest income in the United States. One reason is that the region has long relied on agriculture. It has textile and apparel manufacturers located near cotton fields. But over time, foreign countries can make products cheaper. Their manufacturing costs are low enough to cover additional shipping costs. Therefore, China and India have accepted these high-paying jobs.
The advantage of living in these states is that they are the states with the lowest cost of living. The five cities with the lowest cost of living are Arkansas, Mississippi, Alabama, Kentucky, and West Virginia. You are restricted to rural areas, older areas in some cities, university towns, and states with lower cost of living. These areas tend to have lower living standards.
Why are some states so poor?
The state with high cost of living has a low level of poverty. The threshold for poverty is the national average. People with incomes below this level cannot live in these states.
The less impoverished states are located in the northeast. Six of the 10 richest states are close to a major city on the east coast of the United States. They benefit from having a world-class research university. Therefore, people with higher education live in those cities. There is a high correlation between education and income.
Four of these states have low poverty rates because they also have the best economies in the country. They are New Hampshire, Maryland, New Jersey and Hawaii. The four states have the fastest economic growth. They are Minnesota, Hawaii, Iowa, and New Hampshire. Economic growth helps reduce poverty.
Three of these states are close to a major city on the east coast of the United States. They are New Hampshire, Maryland and New Jersey. They benefit from having a world-class research university. Therefore, people with higher education live in those cities. There is a high correlation between education and income.
The minimum wage in the District of Columbia is $13.25 an hour. It is also the fourth richest city in the country. The state with high cost of living has a low level of poverty. The threshold for poverty is the national average. People with incomes below this level cannot live in these states.
Some states have a general guaranteed income. This should prevent them from having a high rate of poverty. Alaska has implemented a guaranteed income plan since 1982. The Alaska Permanent Foundation pays an average of $1,200 per resident per year from oil revenue. Almost three-quarters of the recipients use it for emergency situations.
In 2017, the Hawaii State Assembly passed a bill announcing that everyone has the right to basic financial security. It guides the government in developing a solution that may include guaranteed income.
In Oakland, California, the Seed Accelerator Y Portfolio will pay $1,000 to $2,000 per month for 100 homes. Stockton, Calif., is planning to implement a two-year pilot program in the fall of 2018. It will give 100 local families $500 a month. It wants to maintain family unity and stay away from payday lenders, pawnshops and gangs.