Erie Vital Signs

Poverty and Self-Sufficiency : Poverty Rate by Employment Status

Recent Performance

This trend is mixed or inconclusive.

As might be expected, having a job greatly reduces a person's chances of being in poverty. In fact, in 2014 those with a job fell below the poverty line at only half the rate of the general population. Conversely, those who were unemployed experienced poverty at double the average rate, and four times the rate of those who were employed. Similar patterns occurred statewide and nationwide, as well as in virtually all of the thirteen peer areas.

Between 2013 and 2014, the poverty rate fell a bit for the unemployed in Erie, from 34.4% to 32.6%. But surprisingly, it rose for the employed from 7.5% to 7.7%. Five of Erie's peer areas also experienced poverty increases among the employed, as did the state of Pennsylvania. This implies that quite a few areas are seeing increases in the "working poor" despite the ongoing recovery. Patterns in wage rates and annual pay, both EVS indicators, may help explain this.

The Basics

This indicator measures the percentage of individuals in an area who are living below the poverty level, by employment status. In 2013, the U.S. Census Bureau’s definition of an individual in poverty was an individual under 65 making an annual income of less than $12,119, or an individual over 65 making an annual income of less than $11,173. For a family of four, the poverty threshold was $23,834.

Why is this important?

Measuring poverty is important because it helps a community determine the proportion of the population that does not have the minimum level of resources which are adequate to meet basic needs. The poverty rate is one important indicator of the economic well-being of residents in an area.

The Details

From the U.S. Census Bureau:
Poverty statistics presented in American Community Survey (ACS) reports and tables adhere to the standards specified by the Office of Management and Budget in Statistical Policy Directive 14. The Census Bureau uses a set of dollar value thresholds that vary by family size and composition to determine who is in poverty. Further, poverty thresholds for people living alone or with nonrelatives (unrelated individuals) and two-person families vary by age (under 65 years or 65 years and older).

If a family’s total income is less than the dollar value of the appropriate threshold, then that family and every individual in it are considered to be in poverty. Similarly, if an unrelated individual’s total income is less than the appropriate threshold, then that individual is considered to be in poverty. The poverty thresholds do not vary geographically. They are updated annually to allow for changes in the cost of living (inflation factor) using the Consumer Price Index (CPI).

Poverty status was determined for all people except institutionalized people, people in military group quarters, people in college dormitories, and unrelated individuals under 15 years old. These groups were excluded from the numerator and denominator when calculating poverty rates.

Since the ACS is a continuous survey, people respond throughout the year. Because the income items specify a period covering the last 12 months, the appropriate poverty thresholds are determined by multiplying the base-year poverty thresholds (1982) by the monthly inflation factor based on the 12 monthly CPIs and the base-year CPI.

The Nitty-Gritty Details

Subcategories

This EVS indicator has no subcategories.

Peer Areas

These variables include data on all 13 of the standard peer areas, along with U.S. and PA data.

Frequency

Annual

Source

U.S. Census Bureau, American Community Survey Data

Other Related Data

Latest Erie Data from the Economic Research Institute of Erie, at the Black School of Business at Penn State Behrend

Additional Studies and Research

Alemayehu Bishaw and Sharon Stern, Evaluation of Poverty Estimates: A Comparison of the American Community Survey and the Current Population Survey, Poverty and Health Statistics Branch, Housing and Household Economic Statistics Division, U.S. Census Bureau, June 15, 2006.

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