Poverty in the U.S.
The poorest 10% of U.S. households report an average of $6,916 per year in pre-tax income. How much per year do they consume in goods and services?
Correct Answer
In 2021, the poorest 10% of U.S. households directly spent an average of $30,433 on goods and services, despite reporting an average of $6,916 in pre-tax income. This $30,433 figure accounts only for direct purchases, including those made with the proceeds of government benefits like cash welfare and food stamps. However, it excludes goods and services received but not directly purchased by households, such as Medicaid, Medicare, childcare, housing subsidies, school lunches, and employer-provided health insurance. When these are included, the poorest 10% of U.S. households consume about $60,000 of goods and services per year. Adjusted for purchasing power so an apple in one country is counted the same as an apple in another, the poorest fifth of U.S. households consume more goods and services than middle-income households in the majority of European nations.
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