The United States of America has long been considered a nation in which anyone, no matter their status, can work hard enough to make all their financial dreams come true. It’s called the American Dream, but many argue that this dream is all but gone.
The US has always had low, middle, and high-income earners and offered assistance to low-income earners living below the poverty line. But now, even the so-called middle-income earners can’t afford to live in America, and experts say the system and the federal poverty line are absolute “garbage.”
What Is the Federal Poverty Line in the United States?
In the 1960s, Mollie Orshansky famously developed what the world now calls the “poverty line” when she created a formula that could determine whether or not a family could afford to survive on a specific salary.
Later that decade, the US government applied the formula to its residents to determine who couldn’t pay their bills without government assistance. Over the past six decades, the federal poverty line has been adjusted every year to account for inflation, salary, and the cost of living, but many are arguing that the modifications are no longer an accurate sign of who in America is living in poverty.
The Federal Poverty Line 2024
The US Census Bureau calculates the federal poverty line every year, and as of 2024, it has reported that “poverty” applies to single Americans making less than $15,060 per year and families of four making less than $31,200.
However, many experts argue that this math is wildly incorrect. While only 8.3% of Americans make less than $15,000 per year, 36% of Americans have reported that they are struggling to pay their bills.
One Connecticut Family Makes $95,000 But Can’t Afford Necessities
One example of this reality comes from the personal story of a Connecticut family that makes $95,000 per year but still can barely afford anything more than the bare necessities.
The Daley family lives in Windsor, Connecticut. Samantha works as a high school administrative assistant, her husband is a machinist at an aerospace engineering firm, and together, they bring home $95,000 a year.
Their Income Barely Covers Expenses
The Daleys told the Wall Street Journal that their joint incomes barely cover their monthly expenses, such as rent, utilities, groceries, and gas.
In fact, they could hardly afford a recent $500 emergency visit when their son got into an accident, as they have virtually no savings.
The Daleys Have Applied for Government Assistance
As both parents work full time, every summer they need to find care for their two children, which is incredibly expensive. Therefore, the Daleys applied for child care assistance last summer under the Conneticut’s Care 4 Kids program.
However, they were denied multiple times as, together, they make more than the maximum income requirement for the program.
The Federal Poverty Line Has Some Serious Flaws
The story of the Daleys and their struggles certainly sheds light on the many flaws within the calculations for the federal poverty line.
First and foremost, many people argue that the math is just plain wrong. No one can live in the US while making $20,000 or even $30,000 a year, let alone a family of four. Additionally, there are many who say creating a nationwide poverty line is irresponsible and inaccurate because the cost of living varies so much from state to state.
United Way of Connecticut Has Its Own Calculations
In fact, in Windsor, Connecticut, where the Dayles live, housing costs are 24% more and the price of utilities are 30% higher than the national average.
United Way of Connecticut, an organization which fights for the “health, education, and financial stability of every person,” did the math themselves. According to their calculations, a Connecticut family needs $126,000 to make ends meet, not $31,000 as the federal government proclaimed.
“The Federal Poverty Line Is Garbage”
As the president of United Way of Connecticut, Lisa Tepper Bates, told the Journal, “The federal poverty line is garbage.”
Tepper Bates continued, “We wonder why there’s so much anger in public discourse today, and it’s in part because of the stress people feel to just keep themselves and their families afloat. People feel like the system is not serving them.”
Many Americans in Need Aren’t Qualifying for Assistance
The problem with these disparities is that, like the Daleys, many Americans are making above the poverty level, and therefore, aren’t being offered government assistance when they desperately need to it get by.
Programs like Supplemental Nutrition Assistance Program (SNAP), Children’s Health Insurance Program (CHIP), and Medicaid all use the federal poverty line to decide who gets help and who doesn’t.
The Cost of Living in America Has Skyrocketed
One of the biggest issues among American citizens in 2024 is that, while their salaries have remained the same, their cost of living has skyrocketed. From rent to mortgage rates, utility bills, gas, clothing, and especially groceries, life is more expensive than ever before.
According to data collected by the Federal Reserve Bank of St. Louis, the consumer price index in the US has risen by 35.9% since 2017. Which means that Americans are paying nearly 40% more for the same goods and services as they used to, but they’re certainly not making 40% more money.
Millions of Americans Can No Longer Afford to Live in the USA
As of June 2024, millions of Americans are struggling to pay their bills, living paycheck to paycheck, and skipping any purchase that may be considered superfluous, but they still don’t qualify for government assistance.
As Theo Bonet, a United Way contact specialist explained, “It’s heart-wrenching to have to say to someone who’s struggling, ‘I’m sorry, you’re not eligible.” But that’s all she can and will be able to say when desperate Americans call for help until the system changes.
