Life on $2 a Day: US Extreme Poverty on the Rise

A fast-growing group of people in the United States, households with children, are living on $2.00 or less per person per day. This shocking condition in a wealthy country such as the US is formally labeled “extreme poverty” by a World Bank metric that gauges poverty “based on the standards of the world’s poorest countries.” Since poor Americans live in a rich country, they have traditionally been excluded from this official estimate of dire poverty in the world.

In a study for the National Poverty Center, H. Luke Shaefer of the University of Michigan and Kathryn Edin of Harvard University applied the World Bank metric to the US for the first time to show that in mid-2011 and based on cash income, about 1.65 million households, with 3.5 million children, lived in extreme poverty. Since the official poverty level is considered to be $17.00 per person per day, this extent of extreme poverty implies that millions of Americans are subsisting on less than 12 percent of the poverty-line income. Contrary to popular perceptions, the authors further found, based on a measure of cash income, that about one half of the extremely poor heads of households were white and almost one half were married. Children have suffered most: between 1996 and 2011, their numbers in extreme poverty increased by 156 percent.