September 21, 2023
Last week, the Census Bureau released data on poverty in the U.S. for 2022. We learned that, from 2021 to 2022, the Supplemental Poverty Measure (SPM) increased by 60 percent overall and more than doubled among children. This significant increase in poverty is likely due to the end of pandemic-era programs and is one of many indicators that hunger is also on the rise.
Comparing Poverty Measures in 2022
Two measures are used to assess poverty in the U.S.: the Official Poverty Measure (OPM) and the Supplemental Poverty Measure (SPM). The OPM compares a family’s income to predetermined thresholds, but has recognized shortcomings in understanding the degree to which families actually experience economic well-being. As a result, the SPM was developed in 2011.
The SPM improves upon the OPM by setting poverty thresholds based on a more realistic accounting of spending demands, adjusting for the cost of living, adding social program benefits, and subtracting income taxes, child care, and medical or work-related expenses. The SPM is increasingly used because it is a measure of poverty that better reflects the degree of economic hardship people actually experience.
Historically, these differences between the OPM and SPM have resulted in the SPM generating greater rates of poverty than the OPM, meaning that the financial needs from spending demands and cost of living were not sufficiently balanced out by tax credits and government assistance programs. However, in 2020 and 2021, the SPM dipped below the OPM for the first time since the SPM was created. This flip indicated that millions of people were pulled out of poverty by pandemic-era social programs (e.g., expanded unemployment insurance, expanded child tax credit, stimulus payments, expanded nutrition assistance benefits).
Unfortunately, in 2022 the SPM once again surpassed the OPM. In 2022, the OPM remained virtually the same compared to 2021, at 11.5 percent of people. However, the SPM increased from 25.6 million people in 2021 (7.2 percent) to 40.9 million in 2022 (12.4 percent). The increase among children more than doubled, from 5.2 percent to 12.4 percent. There were also increases in the SPM among every age, racial and ethnic group, and geographic region.
Relationship Between Poverty and Hunger
Poverty and hunger exacerbate each other in a feedback cycle. Food is often one of the first expenses to be cut when households are faced with financial hardship, leading to increased rates of food insecurity. At the same time, food insecurity leads to difficulty focusing or to poor health outcomes, both of which can make it difficult to maintain employment or do well in school or college. This strain on employment and education, in turn, worsens future financial stability and well-being. There are many other root causes of hunger that contribute to this detrimental feedback loop.
It is important to remember that households above the poverty level, whether it is measured using the OPM or SPM, also struggle with food insecurity depending on competing financial demands. Recent research has found that the associations between these root causes and food insecurity are stronger among individuals with incomes twice the poverty level compared to those at the poverty level. These findings suggest that increasing access to various government assistance programs is crucial for alleviating stress from the competing costs of medical care, housing, and food.
Other Data Pointing to Increases in Hunger
Research has demonstrated that the SPM is better correlated with experiences of food insecurity among children and older adults. Therefore, since the SPM increased by 60 percent from 2021 to 2022, it is expected that food insecurity may also have increased from 2021 to 2022 (the Census’ annual report on Food Insecurity in the United States will be released October 25).
Other data show that hunger has been increasing. FRAC continues to track “food insufficiency” (often or sometimes not having enough to eat) from the monthly Census Household Pulse data. While not directly comparable to the annual food insecurity measure, the Pulse data does indicate that rates of hunger have been increasing since July 2021.
These increases are likely due to the expiration of government programs and inflation in the cost of food. While the rate of inflation has slowed, the total impact of inflation has been unprecedented on household budgets. Since January 2022, the prices of all goods have risen 18 percent, while the price of food at the grocery store specifically has risen 24 percent. In comparison, for the three-year period prior to the pandemic, January 2017 to January 2020, the price of all goods only rose 6 percent, and the price of food at the grocery store rose 3 percent. [1]
A recent report by the Urban Institute found that survey respondents reported an increase in food insecurity from 2021 to 2022, and a larger share of respondents reported that their grocery costs increased a lot compared to any other expense (e.g., gasoline, utilities, rent, child care, health insurance). The primary coping strategy for weathering the higher price of food reported by respondents was to reduce the amount of food purchased and/or not buy the kinds of foods they wanted.
Poverty and Hunger Are a Policy Choice
The increase in the SPM compared to the OPM in 2022 demonstrates that poverty is a deliberate policy choice. FRAC released a statement with a number of policy recommendations to strengthen the federal nutrition programs, including protecting and strengthening the Supplemental Nutrition Assistance Program in the 2023 Farm Bill, enacting Healthy School Meals for All in more states, and modernizing the Special Supplemental Nutrition Program for Women, Infants, and Children, in addition to making the expanded Child Tax Credit, which was proven to reduce hunger and largely responsible for the decline in child poverty in 2021, permanent and more inclusive.
[1] Source: FRAC calculations using Consumer Price Index data from the Bureau of Labor Statistics, compiled by the St. Louis Federal Reserve. Data sourced from https://fred.stlouisfed.org/categories/32415.
