Iowa, Nebraska and other states in the hardworking Midwest have always boasted some of the lowest poverty rates in the country.
But under a new Census Bureau poverty calculation that for the first time takes into account cost-of-living differences among the states, the Midwest looks even better.
Iowa ranks No. 1 for lowest poverty under the new measure released Wednesday — five spots better than it ranked under the latest official poverty measure, which didn't adjust for cost-of-living differences.
Other Midwest neighbors round out the top five: North Dakota, Wyoming, Minnesota and Nebraska. Nebraska's rank improves four places, compared with the official measure.
“It's a positive story for Nebraska and Iowa,'' said David Drozd, a demographer for the University of Nebraska at Omaha's Center for Public Affairs Research. “The Midwest comes out a lot better under this measure.''
Drozd said it's probably not a coincidence that the five states with the least poverty in the new rankings also have some of the nation's lowest unemployment rates and highest percentages of population participating in the work force. It shows the correlation between jobs and keeping families out of poverty, he said.
The new supplemental poverty rates from the Census Bureau don't replace the traditional “official'' measures, which were released earlier this year. But they address one of the main criticisms of the official measure: its failure to take into account the significant cost-of-living differences that exist across the country.
A family of four living in a house without a mortgage in rural North Dakota or South Dakota can live above the poverty line with an income of about $18,000. But that same family living in a home with a mortgage in San Jose, Calif., would need to make $35,500 to live above the poverty line. The official measure sets the poverty threshold at just over $23,000, no matter where the family lives.
The supplemental measure also takes into account family expenses like income and payroll taxes, out-of-pocket health care costs and child care expenses, which go beyond the food, clothing and housing costs that make up the bulk of the official poverty measure. The supplemental calculation also factors in some types of income left out previously, including the earned income tax credits that boost income for some low-income wage earners.
The three states that have the lowest poverty under the traditional measure — New Hampshire, Connecticut and Maryland — fall to seventh, 18th and 23rd under the new measure. New Jersey takes the biggest plunge in the alternative poverty rankings, falling from seventh to 36th.
“These shifts are really attention-grabbing,'' Drozd said.
Conversely, the states usually considered the poorest — Louisiana and Mississippi — don't look quite as bad. Louisiana improves five spots while Mississippi improves 11, no longer even ranking among the top 10 poorest. West Virginia improves 20 spots.
Under the new measure, California now ranks as the poorest state in the country. For the period from 2010 to 2012, California's poverty rate is calculated at 23.8 percent. That compares with 8.6 percent in Iowa, 9.8 percent in Nebraska and 16 percent nationwide.
|Cost-of-living adjusted poverty rates|
|Poverty||Rank under||Change in|
|rate in %||traditional||ranking|
|1. Iowa||8.6||6 5||5|
|2. North Dakota||9.2||13||11|
|7. New Hampshire||10.2||1||-6|
|8. South Dakota||10.6||24||16|
|United States||16||n/a n/a||n/a|
|44. New York||18.1||37||-7|
|50. District of Columbia||22.7||48||-2|
|Sources:||UNO Center for Public Affairs Research,|
|U.S. Census Bureau|