2017 State of Working Massachusetts

When wages are low, so are incomes. When incomes are too low, people may end up in poverty. Massachusetts has one of the highest median incomes in the nation, and in the past year, median household income grew 5.8 percent.1 Over the past several decades, however, wages and incomes have been stagnant or declining for most families, leaving a large number of children and families in poverty.2

Today, there are about 687,000 people in Massachusetts who live below the federal poverty line (an income of about $24,900 per year for a family of four). This is 10.4 percent, or slightly more than one out of every ten people in Massachusetts, while nationally the poverty rate is 14.0 percent, or about one in seven.3


line graph: Poverty rates have only just started to decline despite years of economic recovery

The national poverty rate shows a statistically significant decline between 2015 and 2016, and has, in fact, for the past few years. In Massachusetts, 2016 (the most recent year for which data are available) is the first year since the Great Recession that the decline in the poverty rate has been statistically significant.

The poverty rate for children is higher than the total poverty rate, at 19.5 percent nationally and 13.6 percent in Massachusetts. This is close to one out of every five children nationally living in poverty, and more than one in eight in Massachusetts—close to 185,000 children. The impacts of poverty on children can be significant, particularly when poverty is persistent throughout their childhood, or when children live in poorly resourced neighborhoods with concentrated poverty.4


line graph: Child poverty remains above pre-recession levels

Although the official poverty measure provides important information about economic well-being, the measure has limitations. It does not account for the actual costs of basic living expenses, and it does not account for a variety of non-cash and tax benefits. The original definition of poverty came from the Social Security Administration in 1964 based on an assumption that families spent a third of their income on food. The cost of a very basic food diet for different size families was then tripled, in order to estimate the poverty threshold. These same basic thresholds are still used today, updated annually to adjust for inflation, and computed on a national basis.5

Today, food no longer represents one-third of a typical family’s costs, and there have been a number of non-cash benefits developed since 1964 that are significant for low-income households which are not counted in a family’s income under the official poverty measure.

Recognizing these limitations, the U.S. Census Bureau created the Supplemental Poverty Measure (SPM) as a more accurate way to measure poverty. This measure calculates the poverty threshold differently, by estimating household costs for covering a variety of basic needs, such as the costs of food, clothing, shelter, and utilities. The SPM calculates income in a different way, because it includes the value of non-cash public benefits such as SNAP (formerly known as “food stamps”) and housing assistance, and the value of tax credits such as the Earned Income Tax Credit (EITC). The SPM also deducts the costs of child care for working parents or out-of-pocket medical expenses. Finally, the SPM adjusts for differences in the cost of living in different parts of the country.6

Unlike in some other parts of the country, the poverty rate in Massachusetts as measured by the Supplemental Poverty Measure is higher than the official poverty rate. Massachusetts, specifically eastern Massachusetts, has one of the highest poverty thresholds as calculated for the SPM, meaning a person would need to have a higher income in Massachusetts to not be counted as poor.7 The SPM poverty threshold is higher in Massachusetts in large part because of the state’s high housing costs.8

The calculation of the Supplemental Poverty Measure allows for an analysis of the impact of a variety of non-cash and other benefits on poverty. Approximately 920,000 people in Massachusetts have been lifted over the poverty threshold by programs such as SNAP, Social Security, or tax credit programs (as calculated by this measure.)9

Poverty does not mean non-working. In today’s economy, many jobs don’t pay enough to cover the basics. Some people need to work at more than one job, or work many extra hours at a single job. In 2015, close to two thirds (63 percent) of Massachusetts working-age adults living below the official poverty line who do not have disabilities worked either full- or part-time at some point in the year. Most of these adults worked at least twenty hours a week for more than half of the year, yet were still living under the poverty line.10


bar graph: Almost two-thirds of non-disabled adults in families with incomes below the poverty line work full or part-time

Federal and state policies that target poverty, boost wages and labor standards, and expand opportunities for low- and moderate-income families can and do have a large, positive effect. These policies improve the lives of millions of people throughout the Commonwealth and help lay the groundwork for a stronger, more prosperous economic future for all Massachusetts residents.

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1Jeremy Thompson, “MA Poverty Down, Incomes Up Substantially in 2016,” Mass. Budget and Policy Center, September 14, 2017, http://massbudget.org/report_window.php?loc=MA-Poverty-Down,-Incomes-Up-Substantially-in-2016.html.

2See “Wages & Income” section of this paper for more complete discussion.

3Unless otherwise specified, all of the poverty data in this section from American Community Survey, 2016 1-year Estimates, “Poverty Status in the Past 12 Months”, available at American FactFinder. Poverty thresholds from U.S. Census Bureau.

4See, for example, Lisa Gennetian, Jens Ludwig, Thomas McDade, and Lisa Sanbonmatsu, “Why Concentrated Poverty Matters,” Stanford Center on Poverty & Inequality, Spring 2013, pp. 12-13 available at https://inequality.stanford.edu/sites/default/files/media/_media/pdf/pathways/spring_2013/Pathways_Spring_2013_Gennetian_Ludwig_McDade_Sanbonmatsu.pdf.

5See U.S. Census Bureau, Measuring America: Poverty: The History of a Measure, January 2014, https://www.census.gov/library/visualizations/2014/demo/poverty_measure-history.html.

6“How the U.S. Census Bureau Measures Poverty,” https://www.census.gov/library/visualizations/2017/demo/poverty_measure-how.html.

7U.S. Census Bureau, “SPM Thresholds by Metro Area: 2016,” https://www2.census.gov/programs-surveys/demo/tables/p60/261/pov-threshold-2016.xlsx.

8Liana Fox, “The Supplemental Poverty Measure: 2016,” U.S. Census Bureau, Revised September 2017, p.8.

9Center on Budget and Policy Priorities analysis of 2009-2012 Census Bureau data from the March U.S. Census Bureau Current Population Survey and SPM public use files.

10Center on Budget and Policy Priorities analysis of 2015 U.S. Census Bureau data from the American Community Survey public use microdata.