Alaska poverty rate jumps to 11.2 percent in 2014

New census data shows that poverty has increased in Alaska, but it may not be as simple as the numbers make it look.

Alaska’s statewide poverty rate climbed in 2014 to 11.2 percent, a 1.3 percent increase from 2013, according to the U.S. Census Bureau’s 2014 American Community Survey data. It was the only state that saw both an increase in the number of people living in poverty and the percentage.

Alaska has its own poverty guidelines, which have a slightly higher limit than in the Lower 48 and Hawaii. A person is judged to be below the poverty guideline if they make less than $14,720 per year. For a family of four, that is $30,320, according to the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Planning and Evaluation. This has increased slightly over the years and is designed to compensate for the high cost of living in Alaska.

However, so has the percentage of people living in poverty in Alaska. In 2010, approximately 9.5 percent of Alaskans fell below that income limit. That number had climbed to 9.6 percent by 2012 and jumped to 9.9 percent in 2013.

Yet the raw data from the census may not be the whole truth, according to Caroline Schultz, an economist in the Alaska Department of Labor’s Research and Analysis section.

Statewide poverty in Alaska is a different picture than in many other states, she said. Individuals living in poverty in Anchorage have a very different situation than those living in subsistence communities in rural Alaska, but they are measured by the same standards in the American Community Survey, she said. This presents a different picture than in a state like New Jersey, which is largely urban and can be measured similarly statewide.

“Poverty in Alaska is kind of a weird concept,” Schutlz said. “When you think about rural Alaska, it’s very different to think about poverty. Maybe it’s not even normal (there) to have a monetary income.”

To illustrate, Alaska has one of the lower poverty rates nationally — Mississippi, the highest, has a poverty rate of 21.5 percent, followed by New Mexico at 21.3 percent. However, in areas like the northwest census district of the Wade Hampton Census Area, the poverty rate was 31.4 percent in 2013. The Nome Census Area followed at 27.7 percent, both nearly double than the national average of 15.8 percent in 2013.

To say that Alaska’s poverty rate is below the national average contrasts with the fact that many people in the state live below the poverty standards. Part of the problem in data determination is that the populations of these areas are very small compared to an urban area like Anchorage, so they come out as high percentages in the census areas but do not have much effect on the statewide reading. Providing an accurate picture of poverty in Alaska may require a different approach, Schultz said.

Eddie Hunsinger, the state demographer in the Alaska Department of Labor, said the data is only based on 2-4 percent of Alaskan households.

The year-over-year data has significant margins of error, and nearly a quarter of the data is “imputed,” meaning that it is judged by similar data from real individuals, according to Schultz. This is one way to produce data much faster but accounts for a large margin of error. Most of the state demographers do not take the year-by-year data into account, waiting instead for the longer five-year statistics, she said.

“The American Community Survey poverty thresholds do not take geographic differences in cost-of-living into account, so that is certainly an additional factor to consider when comparing different areas within the state and between states,” Hunsinger said in an email.

The other indicators of the economy in Alaska would disagree with a significant uptick in poverty. Fewer unemployment benefits claims were filed, the oil industry did well and unemployment decreased between 2013 and 2014, Schultz said.

“The ACS, the one-year data, has pretty big margins of error,” Schultz said. “The data is based on a pretty small sample in Alaska.”


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