Why Poverty Thresholds Fall Short of Telling the Whole Story

The U.S. Census Bureau’s recent release of updated poverty thresholds has sparked important discussions around income, need, and economic well-being. While these thresholds are a useful benchmark for understanding poverty, they paint an incomplete picture of the financial struggles many families and individuals face. At Metopio, we believe that data can help shed light on these gaps and guide solutions that truly address the needs of our communities. 

The poverty thresholds provide a basic income level—adjusted for family size and composition—below which people are considered to be living in poverty. For example, in 2024, the threshold for a family of four is around $30,000. However, this metric fails to account for the significant variations in cost of living across the country, the changing nature of expenses, and the economic realities of those working but struggling to make ends meet.  

Working but Still Struggling 

Many working families earn more than the poverty threshold but still cannot afford the basics: housing, childcare, food, healthcare, and transportation.  For example, the Department of Labor reports that 76% of counties experienced an increase in cost over the past five years resulting in almost 1/5th of a family’s income going to childcare. Some reports show the average rise in cost at 32% since 2019, meaning a substantial jump in price for any parent seeking childcare services.  

This is where alternative data sources, such as United Way’s ALICE (Asset Limited, Income Constrained, Employed) framework, provide invaluable insights. ALICE highlights the population living above the poverty line yet below a survival budget—essentially, those who are employed but stretched too thin. In 2023, the ALICE report revealed that nearly 51 million U.S. households fall into this category, which is far larger than the population officially counted as living in poverty. 

Housing Affordability: A Major Stressor 

Another dimension that poverty thresholds overlook is housing affordability. According to the National Low Income Housing Coalition, there is not a single state in the U.S. where a minimum-wage worker can afford a modest two-bedroom apartment without spending more than 30% of their income. The “Housing Wage” – the hourly wage needed to afford a modest rental home – far exceeds both the minimum wage and the income level captured by the poverty line in most areas. In many counties, a household is required to work 3 or 4 minimum wage jobs to afford a two-bedroom apartment. This disconnect leaves millions of families in precarious housing situations, often just one emergency away from eviction.