The United States, in many ways, is a country that can serve as a model for others. In addition to being the most powerful political force in the world, the U.S. also leads by economic standards and can be proud of its economy, which is still the largest in the world. In terms of nominal GDP for the current year 2025, America is the richest country globally, with a gross domestic product of $30 trillion. It is followed by China with $19.5 trillion, Germany with $4.9 trillion, and Japan with $4.3 trillion. While the economic achievements of the U.S. should be acknowledged—America as a nation is still the wealthiest—there is also another side to the story.

The Impoverishment of the American People

Despite its immense wealth, the United States is marked by widespread poverty, though it is a subject rarely discussed or well known. The United Nations Educational, Scientific and Cultural Organization (UNESCO) defines poor people as those who lack sufficient income to meet their basic life needs such as food, clothing, and shelter. Unfortunately, this group is growing in the U.S. The problem of poverty is no longer reserved for poor Third World countries or highly populated nations like China, India, or Brazil. Unemployment, low-wage jobs that cannot support a decent life, long-term loans, mortgages, and evictions are part of everyday American life.

Income inequality began to grow in the 1980s and eventually reached even the traditional pillars of the American economy—those with higher education, entrepreneurs, capital markets, industrial sectors, and management. Many small business owners are barely surviving, and new large companies are not being established often. After the outbreak of the 2008 global financial crisis, poverty became even more entrenched in the U.S., with a similar trend occurring following the 2020 pandemic-driven recession. While the U.S. economy has seen some improvement in recent years, the phenomenon of poverty is far from being resolved.

37 Million Poor

The poverty threshold is determined by the federal government. According to the latest available data from the U.S. Census Bureau, the poverty rate in America was 11.1% in 2023—a 0.4% decrease compared to 2022. The current poverty rate is roughly equal to the rate before the War on Terror began—in 2000, it stood at 11.3%. More than 37 million Americans lived in poverty in 2023, a figure roughly equal to the population of Ukraine. An additional 29.9% of the population—or 93.6 million people—lived on the brink of poverty. As many as 5.3% of the population—or 17.3 million people—lived in extreme poverty, with incomes less than half of the official poverty line. In 2024, 47 million Americans faced malnutrition and did not consume enough daily calories due to lack of money. Poverty in the U.S. remains a significant socio-economic challenge despite occasional improvements. Inflation and high housing costs continue to make it difficult for many families to escape poverty and lead normal lives.

Who Are the Poor?

Official poverty rates vary depending on household size, income, and age. The poverty line for a family of four is $25,701. Naturally, poverty does not affect all demographic groups equally. The most affected groups are minimum wage workers, seasonal laborers, retirees, and individuals with disabilities. Among the most vulnerable are people with disabilities, of whom one-quarter (25.7%) live in poverty, and retirees with a poverty rate of 9.7%. This is morally troubling for the U.S., as these groups are among the most vulnerable in every sense.

Poverty also affects genders differently. In 2018, 12.9% of women and 10.6% of men lived in poverty. Women are still often paid less for the same jobs and are more likely to work in lower-paid sectors and have greater caregiving responsibilities.

Poverty rates vary significantly among different racial and ethnic groups. Native Americans and Alaska Natives are the most affected ethnic groups, with about 25% living in poverty. About 20% of Black and 17% of Hispanic populations live in poverty. In comparison, only 8.6% of White (non-Hispanic) and Asian populations live below the poverty line. These disparities result from a complex mix of historical circumstances, racial discrimination, and limited access to education. Native Americans, Blacks, and Hispanics have a harder time finding employment if they come from poor families and cannot afford quality education. On the other hand, White and Asian populations generally have better access to education and job opportunities—though, of course, many White and Asian Americans also do not experience the “benefits” of the American Dream.

Poor Children

Children have been one of the most affected groups by poverty in the U.S. between 1990 and 2022. Child poverty peaked in 1993, when as many as 22.7% of children lived in poverty. From 2000 to 2010, the child poverty rate increased every year. However, it dropped to 15% in 2022. Despite the decline, child poverty remains a serious issue with long-term consequences for health and future employment prospects. In practice, this means that out of every 100 children, about 15 live in poverty—or about every 6th or 7th child. Children from poor families often have limited access to quality healthcare and education, further deepening social inequalities.

Author: Matija Šerić

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