How Many People Are Really Poor?

The official statistics on poverty are notoriously bad, because they undercount income of people on the bottom of the income ladder.

Correcting for unreported income lowers the rate from an official estimate of 11.4% to 5.3%

A much better way to measure poverty is to focus on how much consumption takes place in poor household.

The official child poverty rate in 2022 was 22%. Correcting for actual household consumption, the rate falls to around 7%

False Claim:  Many politicians, media outlets and academics have claimed that poverty of children doubled in 2022 because of the expiration of the 2021 temporary changes to the Child Tax Credit (CTC). In fact, the expiration probably contributed to about a 15% increase in child poverty.

The baseline CTC (not the one that was temporarily expanded) lowers the national poverty rate by only 5.6%

Source: University of Chicago professor Bruce Meyer before the House Ways and Means Committee.


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