Some states are having difficulty shaking off high poverty rates, a new study suggests.
Between 1989 and 2019, 19.4 million people lived in areas of persistent poverty, according to a report by the US Census Bureau. Persistent poverty can be defined as an area that has consistently had poverty rates at 20% or above for a long duration, typically 30 years.
According to Craig Benson, co-author of the report and survey statistician at the US Census Bureau, there are several economic variables that correlate with high poverty rates.
"One of them is income," Benson told Yahoo Finance. "In areas where median income is high, we often see lower amounts of poverty, and the reverse is true as well, where income is low relative to other areas, poverty tends to be higher."
For example, a low-income state like Mississippi — where the median income for an individual is the lowest in the country at $47,446 — also has the highest rate of persistent poverty at 24.4%. This is followed by New Mexico (21.3%), Louisiana (20.9%), Kentucky (17.5%), and Texas (14.6%).
Notably, all states with persistent poverty above 14% are located in the South. Native Americans (24.3%), Black Americans (19.5%), and Hispanic/Latinos (17.1%) are most likely to live below the federal poverty threshold among all ethnic groups, as of 2021.
"Some Southern states have historically disenfranchised lower-income populations and created policies that have prevented people in poverty from achieving economic self-sufficiency," Jaime Rush, senior attorney at the Southern Poverty Law Center (SPLC), told Yahoo Finance. "Some of these policies intentionally targeted Black and Brown communities, and others disproportionately affected these communities."
In Mississippi, 31.1% of Black Americans live in poverty — the third-highest rate for the racial group behind just Iowa and Louisiana.
According to Rush, the mishandling of federal funds has widened income inequality in Mississippi. For instance, the Temporary Assistance for Needy Families (TANF) is a program that helps states provide monthly cash to low-income families, but the state placed restrictive measures on it, which resulted in a decrease in program participation.
Furthermore, a recent audit revealed that between 2016 and 2019, the Mississippi Department of Human Services "misspent more than $77 million in welfare money that was supposed to help some of the poorest people in the US," according to the Associated Press.
How Medicaid helps
States with high rates of persistent poverty also tend to be states with high rates of uninsured individuals.
For example, Texas — with a 14.6% persistent poverty rate — has the highest rate of uninsured citizens in the US at 18%.
“Poverty is a strong driver and predictor of poor health outcomes," Dr. Omar Escontrías, senior vice president of Equity, Research & Programs at the National Health Council, told Yahoo Finance. "Research indicates that those living below the poverty level face insurmountable barriers to access to care. Indirectly, diagnoses of chronic diseases can go unnoticed or misdiagnosed."
Poorer areas are more likely to have inefficient transportation, which becomes an obstacle for residents needing to travel for healthcare, according to the National Health Council. Similarly, the pandemic revealed that nearly half of low-income communities across the country had no ICU beds available, further underscoring the disproportionate impact of the coronavirus on these communities.
Consequently, this impacts life expectancy: Adults whose income falls in the top 1% are expected to live 10.1 to 14.6 years longer than those earning in the bottom 1%, according to the Department of Health and Human Services.
"Research has shown that people living in high poverty areas experience barriers to well-being whether they are poor or not," Benson said. "Many of these areas have a hard time breaking out of the cycle of poverty."
While the national uninsured rate declined to 8.6%, there are still roughly 27.2 million Americans without health coverage.
Typically, those below the poverty threshold are able to qualify for Medicaid, a program that provides healthcare coverage to approximately 86.1 million low-income adults, children, pregnant women, elderly adults, and people with disabilities.
Between 2010 and 2015, the rate of uninsured adults decreased to 18.8% in Medicaid expansion states, while average out-of-pocket spending decreased to $972.
However, there are still 10 states that have not adopted the Medicaid expansion. These states also have some of the highest persistent poverty rates in the US.
"Medicaid expansion could be one solution to the financial crisis that many rural hospitals are facing and prevent additional hospital closures in underserved communities," SPLC's Rush said. "Lack of access to safe and affordable food, water, housing, and medical care are all causes of persistent poverty. Lack of quality educational opportunities, employment, and lack of political power are also causes of persistent poverty. Without these indivisible, interdependent, and interrelated human rights, you cannot achieve an adequate standard of living."
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Tanya is a data reporter for Yahoo Finance. Follow her on Twitter. @tanyakaushal00.
