OMAHA, Neb. (AP) — A new U.S. Census report shows that Iowa and several other Midwest and Plains states have the lowest poverty rates when cost of living is factored into the calculation.
Iowa had the lowest poverty rate at 8.6 percent, according to the report, which was released Wednesday. It was followed by North Dakota and Wyoming, both at 9.2 percent, Minnesota at 9.7 percent and Nebraska at 9.8 percent with the lowest rates in the nation.
The national rate under the new measure, which is designed to provide a better picture of the problem, is 16 percent instead of 15.1 percent on the traditional poverty rate. Overall, it shows 49.7 million poor people in the United States in 2012, up from the traditional formula count of 46.5 million.
The states with the highest poverty levels have high housing costs and large numbers of immigrants: California is No. 1 with a 23.8 percent poverty rate, followed by Washington D.C. at 22.7 percent.
The new measure won't replace the old numbers, which are used to allocate federal aid to states and determine eligibility for programs like Medicaid. But many researchers say it's more accurate because it accounts for living expenses, food stamps and tax credits. The Obama administration began publishing the new rate two years ago.
Most of the low-rate states already looked pretty good under the traditional rate. For instance, Iowa ranks sixth with a 10.5 percent poverty rate under the old method, but moved up to first with an 8.6 percent rate when cost of living was factored in.
If the new poverty standard was adopted by Congress, payments to aid programs would increase overall but there could be significant differences in how much each state receives.
There are some significant differences in the way states rank under the traditional poverty rate and the new measure because of the cost-of-living factor, said David Drozd, research coordinator at the Center for Public Affairs Research at the University of Nebraska Omaha.
"What strikes me is just how different a lot of the rankings were," Drozd said.
Near the top of the list, North Dakota jumped from 13th lowest on the traditional poverty measure to second under the new measure, as its poverty rate declined from 11.5 percent to 9.2 percent. South Dakota improved from 24th on the old measure to 8th as its poverty rate improved to 10.6 percent from 13.6 percent.
New Jersey saw the biggest drop when it fell from seventh to 36th as its poverty rate changed from 10.7 percent to 15.5 percent. West Virginia recorded the biggest gain, moving from 40th to 20th because its poverty rate fell from 17.2 percent to 12.9 percent.