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  • Marcus J. Hopkins

How We Define "Low-Income" is Desperately Skewed

Updated: Jun 7


Poverty in Appalachia: An average of 27.1% of Appalachians earn below 150% of the Federal Poverty Level (FPL), compared to the national average of 20.3% Poverty are highest in Kentucky (36.9%) and Mississippi’s (32.3%) Appalachian counties Residents living in rural counties are disproportionately more likely to live in poverty
An average of 27.1% of Appalachian residents earn below 150% of the FPL, compared to the national average of 20.3%.

By: Marcus J. Hopkins

June 5th, 2024


I was reading an article, this past weekend, about how the "digital divide" is not so much about whether or not people have technology or access to broadband, but about whether or not people are or are not engaging with and can understand digital health information. In that article, one line really caught my eye:


"Although this group was very low-income, with an average annual income at $35,000, nearly all had access to the internet (94.5 percent)" (Heath, 2023).


This prompted me to reach out APPLI Board Member, Matthew Cox, Ph.D., Founder & CEO of Greenlink Analytics, a 501(c)(3) non-profit organization based in Atlanta, GA, that works in the green energy space and conducted detailed research, analysis, and reporting on energy policy and outcomes.


Dr. Cox reminded me that an average annual income of $35,000 actually would be considered "low-income" in almost every state in the U.S. This led us to an interesting discussion about how we evaluate income levels in the United States.


In general, households of four that earn $31,200 - $52,200 are generally considered to be "low-income." This measure is based on a percentage of the Federal Poverty Level (FPL) which is issued by the U.S. Department of Health and Human Services (HHS) each year and sets the income thresholds that allow people to qualify for assistance programs.


Looking at Table 1, we can see that, by the FPL standards, $35,000/year objectively is considered to be a "very low income" for a household of four.


Table 1 - Maximum Income by Percentage of the Federal Poverty Level, 2024

​Percentage of FPL

Maximum Income for a Single-Person Household

Maximum Income

for a Family of Four

100%

$15,060.00

$31,200.00

138%

$20,782.80

$43,056.00

150%

$22,590.00

$46,800.00

200%

$30,120.00

$62,400.00

300%

$45,180.00

$93,600.00

400%

$60,240.00

$124,800.00

500%

$75,300.00

$156,000.00

Note: Retrieved from HealthCare [dot] gov, 2024.


But, this measure troubles me, because it really gets at one of the truly unfair realities of the American healthcare and social services systems: the way we measure poverty in the United States is desperately in need of a fundamental redesign.


For the vast majority of Persons Living with HIV/AIDS (PLWHA) in the United States, "low-income" is a descriptor that is almost intrinsically wedded with HIV status.


Of the 1.2 million PLWHA in the United States:


  • Approximately 50% will experience a housing crisis in their lifetime;

  • 54% rely on at least one part of the Ryan White HIV/AIDS Program to pay for medical services and treatment;

  • 43% rely on state Medicaid programs for healthcare coverage (in all but 10 states that have no expanded their Medicaid programs under the Affordable Care Act, all but four of which are located in the South);

  • Just 40% have private healthcare coverage (Dawson, Kates, & Roberts, 2023).


These data are particularly concerning for Lesbian, Gay, Bisexual, Transgender, and Queer (LGBTQ+) living in Appalachian states and counties, where poverty rates tend to be higher than the national average.

Nationally, a little more than 1 out of every 5 residents (20.3%) earns below 150% of the FPL. Comparatively, residents in 357 of Appalachia's 431 counties and independent Virginia cities (82.8%) earn below 150% of the FPL (U.S. Census Bureau, 2024).


When we look at how the FPL is determined, the U.S. Department of Health and Human Services releases an annual report that "...shows the cost needed by the average person per year to cover basic necessities such as food, utilities, and accommodation," adjusting it each year for inflation (Hayes, 2023).


This, of course, doesn't actually tell us very much, and it's a process that is in desperate need of both transparency and reform.


There are some very important questions that , for all intents and purposes, appear to be left out of the HHS FPL formula:


  1. We know that 91.7% of households own at least one vehicle (Valentine, 2024). Transportation is a vital "cost of living" that is necessary for people to travel to and from work, school, and healthcare services, particularly in rural parts of the country. Is the cost of vehicle ownership, including maintenance, repairs, and fuel, taken into account?

  2. We know that more than 1 out of every 3 households rent their homes (Kilroy & Smith, 2024). We also know that rents have been steadily rising since 2021 (Gardner, 2024). How, exactly, is HHS accounting for housing costs?

  3. We know that healthcare costs continue to rise, with U.S. healthcare spending increasing 4.1% in 2022 (Centers of Medicare and Medicaid Services, 2023). Why is the cost of healthcare not being taken into account as a cost of living?

This is not, of course, an exhaustive list of questions, nor is it one filled with questions that have easy answers.


We are currently in a point in American life where every aspect of our lives is more expensive; where education is starting to feel out of reach; where feeding our families has become more expensive than at any point in nearly a century; where affording medications and medical care is forcing us to delay or skip treatment altogether; where the cost of keeping the lights on and our houses at a livable temperature contnues to increase along with the obscene profits energy companies reap.


And so, we must ask:


"Is it time that we stop pretending that the FPL is any kind of real measure of poverty, or does it, like so many other measures, need to be reexamined and revised to meet real-world circumstances?" I think it's time.

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