Last week, Scioto Analysis released our updated Ohio Poverty Measure, which is our project to estimate the extent of poverty in the state of Ohio. One of the key inputs in our model is the value of income people receive from public benefits.
Because our model estimates benefits as a part of people’s incomes, there are two important differences compared to the Official Poverty Measure. First, our poverty lines are generally higher than the official poverty lines. This is because the official poverty line is primarily based on food costs, which are now a lower portion of people’s actual spending than the mix of goods used to determine poverty thresholds for the Ohio Poverty Measure.
Second, the incomes we compare against the poverty lines are often higher than those used in official poverty calculations. This is because the benefits we account for are often larger than the additional costs (e.g. medical expenses) we account for.
Because of these adjustments, our model better explains how many people in Ohio have sufficient resources to get by. It also gives us an idea of how much our social safety net is assisting in helping people get by.
Because of the safety net, we estimate that Ohio’s poverty rate is 8.7%, as opposed to the 12.1% poverty rate reported by the Official Poverty Measure.*
This result is supported by data from Brookings, which found that after adjusting for cost of living Ohio has one of the most generous state safety nets. Ohio is right in the middle in terms of nominal generosity, but because the Midwest is more affordable on average those safety net dollars get stretched further.
Looking at our data, if we remove the safety net completely in Ohio (state and federal), we find that the poverty rate jumps all the way from 8.7% to 20.5%. This means that in a world without social security, SNAP benefits, housing assistance, or any other public benefit, one out of every five people would not have enough to get by.
Looking at the geographic breakdown of this impact, we see that while poverty rates are higher across the state, they are significantly higher in areas that already struggled with poverty. Urban city centers and rural Appalachian counties had poverty rates of about 15% ~ 20% when including public benefits. Those can jump all the way up to over 40% if we take that money away.
In the wealthiest parts of the state, poverty rates went from about 5% to over 10% if public benefits were removed from income. Although these people probably relied much less on benefits like SNAP or housing assistance, many of them still benefited from Social Security, which is by far the largest public benefit program nationally.
Looking at some of the largest counties in Ohio, we can visually see that poverty rates almost doubled after removing benefits from the calculations. The biggest difference is in Appalachian Athens, Gallia, and Meigs Counties, which had higher poverty rates with benefits than the more urban counties.
This experiment shows just how important Ohio’s safety net is. Whether it be because of disability, old age, local job market conditions, or need to spend time caring for family members, many people don’t draw enough income from wages alone to support their families.Because of these programs like social security, SNAP, and housing assistance, many people are nonetheless able to put a roof over their heads and food on the table. Public benefits are far more than just a political talking point, they are one of the most important tools the public sector has for making sure people are able to get by.