Census Bureau: Alabama remains one of nation's poorest

From the AP:

MONTGOMERY, Ala. (AP) — Despite low unemployment and a relatively strong economy, Alabama remains one of the poorest states in the country.

U.S. Census estimates released Tuesday show that 750,000 people, or 16.7 percent of those residing in Alabama, live below the poverty level. Only Mississippi, Louisiana and the District of Columbia have a higher percentage of people living below poverty, according to the census estimates. ...

The Census figure show the poverty rate in Alabama has remained mostly stagnant in recent years. It was 16.9 percent last year, 15.0 percent in 2003 and 14.6 percent in 2002. The poverty figures, however, have improved over the past 25 years. In 1981, 24.1 percent of Alabama residents were living below the poverty line.

As I have mentioned before (see here and here), these statistics are somewhat misleading. They are based on a nationwide poverty threshold, and do not account for state-to-state variation in the cost of living. Thus, the reported poverty rate in states like Alabama, where the cost of living is much lower than it is in many other states, tends to be inflated.

A recent study by the Pacific Policy Institute of California showed that when housing costs are factored in, Alabama's poverty ranking drops significantly. In the 2002-2004 period, Alabama ranked 7th poorest in the nation according to the Census statistics, but dropped to 14th when housing costs were factored in. (That's not including D.C.) That's still not necessarily good, but it's something to keep in mind when you hear statistics like these.