Define Poverty Rate

According to the financial glossary on CNN.com, the poverty rate is defined as "The percent of the population living below the poverty line." The poverty line is the amount of money deemed necessary for a family (which could be defined as just one person) to live. That poverty line is determined by the federal government.

The Census Bureau says that the poverty rate in the United States in 2009 was determined to be 14.3 percent, meaning that 43.6 million people were poor, or fell belong the established poverty line.

The Poverty Line

The poverty line is intrinsically tied to the poverty rate. Here's a few examples of what the poverty line has been deemed to be for 2011. These figures are for all of the states except Alaska and Hawaii.

• One person family: $10,890
• Two person family: $14,710
• Three person family $18,530
• Four person family: $22,350

The numbers continue in a similar pattern up to eight people. After that, the Department of Health and Human Services says to add on $3,820 for each additional person. The numbers are slightly higher in both Alaska and Hawaii.

These figures are appropriate for some parts of the country. However, in areas such as New York City or San Francisco, it would be financially impossible for an individual to make $10,890 and support him or herself appropriately. Therefore, a major issue involving poverty, the poverty line, and the poverty rate is that these statistics do not take into account higher costs of living.