In this article, we will be navigating through the poverty situation in the US, the disparity in state-level poverty, while covering the 25 states with the highest poverty rates in the country. If you wish to skip our detailed analysis, you can move directly to the 5 States with the Highest Poverty Rates in the US.
Poverty Across the US: An Analysis
On September 12, the US Census Bureau reported an overview of national poverty in the latest fiscal year, 2022. The commonly used poverty measure to analyze well-being is official poverty which classifies families and individuals as in poverty if their pretax money income falls below a threshold adjusted by family composition. The official US poverty rate in 2022 was 11.5%, with 37.9 million people in poverty. This rate increased for the Whites and non-Hispanic Whites while it declined for the Black population in 2022.
The Supplemental Poverty Measure for the country takes into account the resources from government programs, tax credits to low-income families, and the geographic variations to calculate poverty thresholds. This measure also went up by 4.6% year-over-year in 2022. It significantly increased among the children in the country. Furthermore, the most important anti-poverty program was social security as it moved 28.9 million people out of the supplemental poverty. On the other hand, refundable tax credits alleviated 6.4 million people out of supplemental poverty.
Certain other factors influenced by poverty include educational attainment and work experience. This is evident from the fact that the poverty rate for those without a high school diploma was at least five-and-a-half times higher than for those with at least a bachelor’s degree. In fact, the poverty rates were the lowest among those who held a bachelor’s degree in 2022. The poverty rate among those who did not work was almost 16 times higher than the rate for full-time, year-round workers. Full-time employees had the lowest poverty rates among other work groups in 2022. You can also take a look at some of the least developed states in the US.
A Wealthy and Progressing US: A Different Story
The poverty rates being high in some states can be explained by the economic conditions under which these states are deprived of ample employment opportunities for the residents or a climate that favors businesses to flourish. As several states drown in the rising burden of deprivation and poverty, others lead their way in technology and innovation. Some of the major companies successfully positioned in low-poverty states include Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Johnson & Johnson (NYSE:JNJ).
The popular e-commerce giant, Amazon.com, Inc. (NASDAQ:AMZN), has recently set up its second headquarters in Arlington, Virginia. Virginia has one of the lowest poverty rates in the US. Furthermore, the company’s choice of Virginia was a validation of the state’s high-quality education system, talented workforce, and innovation culture. On November 9, Amazon.com, Inc. (NASDAQ:AMZN) reported that the headquarters in Virginia feature a 2.5-acre park that is currently open to the public. Amazon officially opened the Metropolitan Park as the first phase of its Virginia-based headquarters in June. This park is inspired by the United States Botanic Garden in Washington, D.C. This park features 11 unique plants, art installations, and design elements.
Washington serves as one of the leading states in terms of productivity. It hosts numerous multinationals including Microsoft Corporation (NASDAQ:MSFT). The tech leader continues to drive innovation across the industry. On October 31, Microsoft Corporation (NASDAQ:MSFT) reported that it has entered into a partnership with Siemens. The first development in this regard is Siemens Industrial Copilot, an AI-powered jointly developed assistant which focuses on improving human-machine collaboration in manufacturing. This will also allow engineers to boost code development, increase innovation, and tackle skilled labor shortages. The partnering firms plan to extend generative AI to other sectors such as infrastructure, transportation, and healthcare. Teamcenter for Microsoft Teams is a new app that will be using generative AI to enable collaboration across teams and will be available from December, 2023.
Johnson & Johnson (NYSE:JNJ) is an American multinational pharmaceutical, and medical technologies corporation. It is headquartered in New Jersey which has a significantly lower poverty rate than the majority of the US states. Johnson & Johnson MedTech continues to improve the surgical experience by offering transformative technologies across all types of surgery. On November 7, Johnson & Johnson (NYSE:JNJ) reported that its OTTAVA robotic surgical system will be submitted for an investigational device exemption application to the U.S. Food & Drug Administration in 2024 to initiate clinical trials. This general surgery robot has a unique design that improves the workflow in the OR, increases safety, and enables 360-degree patient access.
Now that we have taken a look at the disparity in poverty situation across the US, we can move to the 25 states with the highest poverty rates in the US.
25 States with the Highest Poverty Rates in the US
Our Methodology:
In order to compile a list of the 25 states with the highest poverty in the US, we sourced data from the US Census Bureau. We proceeded by choosing the poverty rate as our metric. The poverty rate refers to the percentage of the population below the poverty level. The most recent official data available regarding poverty rates is from 2021.
Finally, we ranked the 25 states with the highest poverty rates in the US in ascending order of their poverty rates.
25 States with the Highest Poverty Rates in the US
25. Illinois
Poverty Rate: 12.1%
Corruption in Illinois has led to many state residents being impoverished apart from reducing economic activity. The low-income families continue to face affordability issues due to rising poverty. Illinois ranks as one of the 25 states with the highest poverty rates in the US.
24. Oregon
Poverty Rate: 12.2%
Oregon is one of the poorest states in the US. The limited diversity of industries and low wages fuel poverty growth. Oregon has been struggling with poverty for several years and experienced a poverty rate of 12.2% in 2021.
23. Indiana
Poverty Rate: 12.2%
Indiana is a victim of high poverty and rising wage gaps. Some of the poorest cities in Indiana include Gary, Muncie, Marion, and Terre Haute. In 2021, the state recorded a poverty rate of 12.2% thereby ranking as another US state with high poverty.
22. South Dakota
Poverty Rate: 12.3%
The poverty rate was 2.3% in South Dakota as recorded in 2021. The state is home to some of the poorest counties including Todd County, Mellette County, Jackson County, and Ziebach County. The poor population in South Dakota also tends to pay a higher income in state and local taxes. Hence, South Dakota one of the states with the highest poverty rates in the US.
21. California
Poverty Rate: 12.3%
California suffers from high poverty as the poverty rate within the state was as high as 12.3% in 2021. Los Angeles and San Diego have a higher share of the population living under the poverty line. Adult poverty is also high among Californians.
20. Missouri
Poverty Rate: 12.7%
In 2021, the poverty rate in Missouri was 12.7%. Within the state, Cape Girardeau has high poverty as well as joblessness. Hence, Missouri is one of the 25 US states with the highest poverty rates.
19. Arizona
Poverty Rate: 12.8%
The poverty rate in Arizona was 12.8% as recorded in 2021. This makes it one of the US states with a high poverty rate. While the child poverty rate has declined recently, poverty across the adult population still tends to be high in Arizona.
18. Michigan
Poverty Rate: 13.1%
Michigan is one of the top states with the highest poverty rates in the US. The state experienced a poverty rate of 13.1% in 2021. Many households in the state struggle to afford basic necessities such as food, housing, and healthcare.
17. Florida
Poverty Rate: 13.1%
The cost of living is high in Florida which has pushed many under the poverty line. In 2021, the state witnessed a poverty rate of 13.1% which made it one of the 25 states with the highest poverty in the US. A significant child population in Florida suffers from poverty.
16. Ohio
Poverty Rate: 13.4%
In 2021, Ohio recorded a poverty rate of 13.4% thereby ranking as one of the US states with the highest poverty. This rate is higher than the US average poverty. Cuyahoga County also suffers from high poverty.
15. North Carolina
Poverty Rate: 13.4%
North Carolina is one of the 25 states with the highest poverty rates in the US. Poverty is especially high among children, Black, Latinx, and Native Americans. A disproportionate distribution of wealth further increases state poverty.
14. Tennessee
Poverty Rate: 13.6%
Tennessee ranks as one of the poorest states in the US. In 2021, the state recorded a poverty rate of 13.6% which is comparatively high. A major child population suffers from poverty in Tennessee. The crime rates are also high in the state.
13. New York
Poverty Rate: 13.9%
In 2021, New York witnessed a poverty rate of 13.9% thereby becoming another one of the US states with a high poverty rate. Food insecurity, housing instability, and income inequality are high in the state. Unemployment rates are high among people of color and low income.
12. Georgia
Poverty Rate: 14%
Poor education, inadequate living standards, and a lack of access to health are various factors that symbolize poverty in Georgia. In 2021, the poverty rate in Georgia was 14% which made it one of the 25 states with the highest poverty rates in the US.
11. Nevada
Poverty Rate: 14.1%
The poverty rate in Nevada was as high as 14.1% in 2021. Other than having a high unemployment rate, the state ranks low in both education and healthcare. Hence, Nevada has a high poverty rate among other states in the US.
10. Texas
Poverty Rate: 14.2%
Texas ranks as another state with a high poverty rate. In 2021, the poverty rate in Texas was as high as 14.2%. Black and Hispanic people experience higher poverty than the rest of the population. Uninsured rates are also high in the state.
9. South Carolina
Poverty Rate: 14.6%
The population of South Carolina largely suffers from financial insufficiency as well as a lack of access to high-quality K-12 education, postsecondary education, and employment opportunities. The poverty rate of 14.6% in South Carolina as recorded in 2021 makes the state another one of the US states with high poverty.
8. Oklahoma
Poverty Rate: 15.6%
Oklahoma also makes it to the list of the 25 states with the highest poverty rates in the US. In 2021, the state recorded a poverty rate of 15.6%. Poverty persists in Oklahoma as the state residents experience low median household incomes, high unemployment rates, and a lack of quality education.
7. Alabama
Poverty Rate: 16.1%
Alabama is another one of the US states with a high poverty level as evident from its poverty rate of 16.1% as recorded in 2021. The state holds the poorest counties with low median household incomes. A majority of children in Alabama live in poverty. A large proportion of people living in poverty in Alabama are found in the River Region.
6. Arkansas
Poverty Rate: 16.3%
Arkansas suffers from low income, poor infrastructure, high unemployment, low levels of education, and lack of adequate healthcare. The state had a poverty rate of 16.3% in 2021 which makes it one of the states with the highest poverty rates in the US.
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Disclosure: None. 25 States with the Highest Poverty Rates in the US is originally published on Insider Monkey.