In a land of dollars: Deep poverty and its consequences

America is a rich country. But it contains lots of people surviving on incomes more common in developing countries. In this memo, we explore the consequences of being on the very bottom rung of the income ladder on families’ daily life, as well as the long-term life chances of their children.

Extreme poverty, deep poverty

In 2011, over 1.5 million families were living in “extreme” poverty, with $2 or less in cash income per person per day, according to a recent study by Luke Shaefer and Kathryn Edin. Many more—over six percent of the US population, including 7.1 million children— live in “deep” poverty, defined as having a household cash income under half the federal poverty threshold. In 2015, the threshold for being in deep poverty is an annual cash income of less than $5,885 for an individual, $7,965 for a single-parent with one child, or $12,125 for a married couple with two kids. For context, the median household income in the US in 2013 was nearly $52,000.