U.S. poverty rate falls again, to lowest on record

“The U.S. ​poverty rate edged down to the lowest on record ‌in 2025, while median household income hit a record high, the Census Bureau said on Tuesday. There were 34.5 million people in poverty ​in 2025,” Reuters reports.

“The decline marked the second ​consecutive annual drop in the poverty rate and brought ⁠it to its lowest level since the bureau began tracking ​the measure…The poverty rate — the percentage of people living in poverty — dipped 0.5 percentage point to 10.2% last year, the ​bureau said. The supplemental measure of poverty, which takes into ​account non-cash government benefits and taxes, was at 13.1%, and the median household ‌income ⁠increased 2.6% to $87,460.  In 2025, a family with two adults and two children was classified as in poverty if their annual income was less than $32,649, the bureau said. The official poverty rate ​for children fell ​to a ⁠historic low of 13.4% in 2025.”

“Most people in the United States had health insurance for some ​or all of 2025, the bureau said, but ​26.7 ⁠million people, or 7.9% of the population, did not have health coverage at any time…the ​uninsured rate remained near historic lows.”

Even many people below the poverty line aren’t actually living in poverty, because they receive welfare that isn’t taken into account in classifying them as poor. “Roughly 90 percent of the $1.2 trillion the federal government spent on major welfare programs in fiscal year 2025 fell entirely outside what the OPM counts as income,” note economist Romina Boccia and Tyler Turman. “The OPM overstates poverty by not counting most welfare benefits, such as noncash assistance and refundable tax credits, as income.” “Housing subsidies” people receive are ignored in labeling them as poor, as are “refundable tax credits from programs like the Earned Income Tax Credit (EITC) and Child Tax Credit .” Also ignored are “Supplemental Nutrition Assistance Program (SNAP), school meals, Head Start, the Obamacare subsidies,” and Medicaid. Few people below the poverty line go hungry, and most households below the poverty line have air conditioning, cable TV, an automobile, and non-crowded housing that is in good repair.

Poverty could be cut further by getting rid of occupational licensing restrictions that keep some people from working. Excessive occupational licensing drives up the rate of theft and property crimes by increasing joblessness among people with criminal records. (It doesn’t seem to have any effect on the violent crime rate. Violent crime is not caused by poverty, and poverty is not even the cause of most property crimes).

Back in the 1950s, most states didn’t require hairstylists or hair braiders to get a license before they could cut people’s hair. Just 4 percent of Americans needed a license to work in 1950. Now, 30 percent of Americans need a occupational license to work.

As economist Chris Edwards of the Cato Institute notes, “The increase in mandatory licensing has reduced workforce mobility and created barriers to work and advancement. The barriers particularly harm young people starting their careers, people with low incomes, people switching occupations, people moving between states, veterans or military spouses, and people with a criminal record.”

It is dumb for states to require hairstylists to attend beauty school, rather than just getting on-the-job training. Hairstylists don’t need hundreds of hours of training at a beauty school to do their jobs properly. But states require that anyway, as a condition for hairstylists being allowed to work.

As the Institute for Justices notes, Studies tend to find that licensing requirements increase costs to consumers while not improving the quality of services. Licensing board are often rackets focused on stifling competition rather than protecting consumers.

Three states mandate useless “inclusivity” training for cosmetologists, making it more costly to be a cosmetologist while teaching them useless DEI buzzwords.

The harm from excessive occupational licensing regulations is so obvious that it has been noted by the administrations of Donald Trump, Kamala Harris, Barack Obama, and Joe Biden, all of which recognized the need to cut back on occupational-licensing restrictions. “During the Obama administration, the Department of Labor and the White House Council of Economic Advisers published a lengthy report on licensing laws, and called for states to take action to remove unnecessary barriers to work. ‘Licensing restrictions cost millions of jobs nationwide and raise consumer expenses by over one hundred billion dollars,’ it concluded.”

The Trump administration also recognized the harm of occupational licensing, saying that “the cost and complexity of licensing creates an economic barrier for Americans seeking a job” and “a barrier for Americans that move from state to state.”

Kamala Harris also called for cutting back on occupational-licensing regulations in her 2024 presidential campaign.

Matt Yglesias describes how “beauty schools are ripping off their students. Terrible licensing rules deserve some of the blame.” He cites a New York Times article “about beauty schools that leave their students drowning in debt rather than opening up” job opportunities, thanks to “occupational licensing” rules.

As Yglesias points out, mandatory-school-attendance requirements for barbers and hair-stylists make no sense. Indeed, such attendance requirements make no sense even for occupations where public safety is at issue and some form of licensing may thus be justified (comically, defenders of beauty-school attendance mandates depict hair-styling as being a dangerous occupation where licensing is needed due to the presence of chemicals in hair treatments). As he notes, it makes more sense to require competency to be shown

purely through certification. In other words: You need to be able to pass the test. In that world, a beauty school can stay in business if and only if it offers a cost-effective training regime. Beauty schools would need to compete with efforts at self-instruction or with apprenticeship arrangements of various kinds. Instead, by requiring the 1,000 hours of training, the state licensing board creates a cozy business for the beauty schools. They become for-profit gatekeepers to economic opportunity. And their incentive structure isn’t to focus on effective education—the quality of the teaching is irrelevant to the business model. It’s to focus on maximizing the amount of money extracted from the students.

Many occupations that are now licensed do not need to be licensed to protect anyone. And the few that do, tend to have excessive requirements for getting a license:

“Licensing is a barrier to entry for all Americans looking for work in certain professions, but it’s particularly pernicious for those on the lower end of the economic ladder. For example, getting a license to cut hair can require more than a year of expensive schooling in some states, while becoming an interior designer in places like Florida requires more than 2,000 days (yes, days!) of training. There’s little evidence that licensing those professions does much of anything to protect public health and safety.

“Once you have a license, you might be stuck in the state where you earned it. A 2015 study by the Brookings Institution found that licensed workers were less likely to migrate between states, but not necessarily because people are happy in those places. Instead, researchers say workers feel locked in place because most state-issued professional licenses are not transferable, so moving out-of-state means you’d be out of business unless you can obtain a new license in your new home.”