Calculating Poverty


This past winter Powerball fever struck America.   In February three winners shared a jackpot of $1.58 billion.    Luck, and the ability to beat the odds helped a great deal, the odds of winning the Powerball are 1 in 292 million.

Come on you know you did it.  You must have imagined what you would do with billions of dollars.    Big House.  Fancy car.  Trips?  Perhaps you wanted to give it all to charity?

While we dream about winning it big, how much time do you spend thinking about poverty?    Unfortunately, for a large portion of our population, many of us are closer to poverty than we are to being part of the 1%.  What about you…how easily close are you to poverty?   Some of the work has been done for us.

Sociologists Thomas Hirschl of Cornell University and Mark Rank of Washington University have calculated how likely you are to become poor based solely on your age, education, race and marital status.  Their calculator predicts probabilities for 5, 10 and 15 years in the future.

It should be noted the research and the calculator are companion pieces to a book “Chasing the American Dream” the duo have written.

According to the book’s website the authors….”provide a new and innovative look into a curious dynamic — the tension between the promise of economic opportunities and rewards and the amount of turmoil that Americans encounter in their quest for those rewards.”

The researchers (and their calculator) are calculating the risk of being not just poverty, but also near poverty.  Poverty they define as income that’s up to 50% above the official poverty level.  (Example: In 2015 the federal povery  line for a family of four was $24,000).

In 2014, the overall poverty rate was 14.8 percent, representing 46.7 million people, or about one in every seven Americans.   Census data has shown that certain characteristics tend to increase the likelihood of experiencing poverty. Among the most important are education, marital status, race, and age. Those with less education, not married, nonwhite, and who are younger tend to be at a higher risk of poverty.

Hirschl and Rank looked at 40 years of income data for 5,000 households and personally interviewed dozens of Americans for their book.   By using this definition of poverty, more than half of all adults in the United States experience poverty at some point.  The risk can be as high as 76% for some Americans and as low as 5 percent for others. Education and marriage can change a person’s odds significantly.

Thomas Hirschl , one of the authors of the book (and the study), said in an interview “Americans are optimistic and hopeful, which is good.  However, a lot of the time we tend to erase bad experiences, and we’re not accounting for the worst-case scenario that has yet to come.”

For more on the Poverty Risk Calculator visit: