Poverty in the United States

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Poverty is defined as the state of one who lacks a usual or socially acceptable amount of money or material possessions.[1] According to the U.S. Census Bureau data released Tuesday September 13th, 2011, the nation's poverty rate rose to 15.1% (46.2 million) in 2010,[2] up from 14.3% (approximately 43.6 million) in 2009 and to its highest level since 1993. In 2008, 13.2% (39.8 million) Americans lived in relative poverty. [3] The government's definition of poverty is not tied to an absolute value of how much an individual or family can afford, but is tied to a relative level based on total income received. For example, the poverty level for 2011 was set at $22,350 (total yearly income) (RM5,600 per month salary) for a family of four.[4] Most Americans (58.5%) will spend at least one year below the poverty line at some point between ages 25 and 75.[5] There remains some controversy over whether the official poverty threshold over- or understates poverty. The most common measure of poverty in the United States is the "poverty threshold" set by the U.S. government. This measure recognizes poverty as a lack of those goods and services commonly taken for granted by members of mainstream society.[6] The official threshold is adjusted for inflation using the consumer price index. Relative poverty describes how income relates to the median income, and does not imply that the person is lacking anything. In general the United States has some of the highest relative poverty rates among industrialized countries.[7] According to a 2008 report released by the Carsey Institute at the University of New Hampshire, on average, rates of poverty are persistently higher in rural and inner city parts of the country as compared to suburban areas.[8][9] The number of people in the U.S. who are in poverty is increasing to record levels with the ranks of working-age poor approaching 1960s levels that led to the national war on poverty.[10]

1 Measures of poverty  
1.1 Two official measures of poverty 1.2 Recent poverty rate and guidelines

1.3 Numbers in other countries 1.2 Understating poverty 4.4 Relative measures of poverty 1.5 The income distribution and relative poverty 2 Poverty and demographics 2.2 Poverty and race 2. Two official measures of poverty Percent and number below the poverty threshold.1 Poverty and family status 2.1 By race/ethnicity and family status 2. [11] .          1.3 Overstating poverty      5 Fighting poverty 6 See also 7 References 8 Further reading 9 External links Measures of poverty Measures of poverty can be either absolute or relative.1 Concerns regarding accuracy 4.3 Poverty and age 3 Food security 4 Factors in poverty    4.

it chose an absolute measure. When the Johnson administration declared "war on poverty" in 1964. which are generally used for statistical purposes—for example. race. shelter and clothing needed to preserve health. Her work appeared at an opportune moment. sex of the family head.[13] The Department of Agriculture found that families of three or more persons spent about one third of their after-tax income on food. For these families. planning. to determine whether a person or family is eligible for assistance through various federal programs. The measure gave a range of income cutoffs. it made it possible to objectively answer whether the U. government was "winning" this war. poverty thresholds were set at three times the cost of the . The newly formed United States Office of Economic Opportunity adopted the lower of the Orshansky poverty thresholds for statistical. and farm or non-farm residence.The poverty rate for selected age groups. The "absolute poverty line" is the threshold below which families or individuals are considered to be lacking the resources to meet the basic needs for healthy living. Orshansky's article was published later in the same year that Johnson declared war on poverty. adjusted for factors such as family size. Since her measure was absolute (i. The "Orshansky Poverty Thresholds" form the basis for the current measure of poverty in the U. having insufficient income to provide the food. Those under the age of 18 are most likely to fall below There are two basic versions of the federal poverty measure: the poverty thresholds (which are the primary version) and the poverty guidelines. The Census Bureau issues the poverty thresholds.e. and other social. and budgetary purposes in May 1965.S. did not depend on other events).S.. The economy food plan (the least costly of four nutritionally adequate food plans designed by the Department of Agriculture) was at the core of this definition of poverty. and demographic characteristics. Mollie Orshansky was an economist working for the Social Security Administration (SSA). number of children under 18 years old. or thresholds. The Bureau of the Budget (now the Office of Management and Budget) adopted Orshansky's definition for statistical use in all Executive departments. The Department of Health and Human Services issues the poverty guidelines for administrative purposes—for instance. to estimate the number of people in poverty nationwide each year and classify them by type of residence. the United States Government has defined poverty in absolute terms.[12] Since the 1960s. economic.

990 $37.350 $27.940 $25.160 $21.270 Each additional person adds $3.060 $43.720 $30. Recent poverty rate and guidelines United States Department of Health and Human Services (HHS) figures for poverty in 2011[4] Persons in Family Unit 48 Contiguous States and D.280 $38." [13] Apart from these changes.780 $4. The largest family size category became "nine persons or more.880 8 $37. Alaska Hawaii 1 $10. the U.C.170 $32.710 5 $26.630 $47.380 $16.710 $18.500 $34.320 4 $22. further changes were made to the poverty definition. In 1981.530 $23.810 $42.930 3 $18. Separate thresholds for "farm" and "femalehouseholder" families were eliminated. Farm thresholds were raised from 70 to 85% of the non-farm levels.890 $13.490 7 $33.S.544 2 $14.100 6 $29. Different procedures were used for calculating poverty thresholds for two-person households and persons living alone. Annual updates of the SSA poverty thresholds were based on price changes in the economy food plan.economy food plan.390 .820 $4. Two changes were made to the poverty definition in 1969. government's approach to measuring poverty has remained static for the past forty years.600 $12. Thresholds for non-farm families were tied to annual changes in theConsumer Price Index (CPI) rather than changes in the cost of the economy food plan.

but this is not adjusted for cost of living and social benefits. despite the fact that France and US have about the same threshold in terms of dollars amount for poverty. If the poverty line in 1999 was less than 42.64% of the median income[citation needed]. Therefore. a family at the poverty line had an income that was 42. each country then has its own definition and threshold of what it means to be poor.[15] For comparison. cost of living and health benefits may differ (with universal health insurance coverage for poor people in France).[14] The Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. "relative poverty" is defined as an income below 60% of the national median equalized disposable income after social transfers for a comparable household. with 12. greater in number but not percentage than the officially poor in Indonesia.1 million people. Relative measures of poverty Another way of looking at poverty is in relative terms. In the EU and for the OECD. The Census Bureau provides an explanation of the difference between poverty thresholds and guidelines. Absolute income may be used but does not reflect the actual number of poor. of a total of 309 million) is comparable to the one in France. the 2011 HHS poverty guideline for a family of 4 is $22. "Relative poverty" can be defined as having significantly less access to income and wealth than other members of society.350. In . then relative poverty would have increased.[13] The 2010 figure for a family of 4 with no children under 18 years of age is $22. the relative poverty rate is a measure of income inequality. but data for earlier years is available as HTML web pages.[17][18]The poverty level in the United States. it might be better to use the Human Poverty Index (HPI).162.[19][20] Number of poor are hard to compare across countries. In 1959. which depend on relative income and cost of living in each country. which has a far lower Human Development Index and the next largest population after the United States.The poverty guideline figures are NOT the figures the Census Bureau uses to calculate the number of poor persons. The figures that the Census Bureau uses are the poverty thresholds. the relative poverty rate will reflect such growing income inequality and increase. Conversely. while the figure for a family of 4 with 2 children under 18 is $22.541.[16] Numbers in other countries The official number of poor in the United States in 2008 is about 39.1 million people in poverty. As of 2011-02-03. where 14% of the population live with less than 880 euros per month. For instance. When the standard of living among those in more financially advantageous positions rises while that of those considered poor stagnates. with low income people coming to have less wealth and income if wealthier people's wealth is reduced by a larger percentage than theirs. In general. Human Development Index (HDI) or other global measure to compare quality of living in different countries.64% of the median income. Among developed countries.65% (39. the poverty rate can decrease. data for 2010 is only available as an XLS file (Microsoft Excel format).

[21] is caused by distributional effects rather than real differences in well-being among EU-countries and the USA.S concept is best comparable to "strict poverty". Although the paradigm of relative poverty is most valuable.5 for each additional household member older than 14 years and 0. A research paper from the OECD calculates the relative poverty rate for the United States at 16% for 50% median of disposable income and nearly 24% for 60% of median disposable income [21] (OECD average: 11% for 50% median. Relying on income disparity to determine who is impoverished can be misleading.167 PPP) or 23. In Europe.955 per person for goods and services (other than taxes). the so-called standardization of income in both approaches is very similar. the official relative poverty line for a single adult person in 2003 was 938 euros per month (11. The disparity of expenditures is much less than the disparity of income. crucial variables of both poverty definitions are more similar than often thought.[citation needed] The reason why relative poverty measurement causes high poverty levels in the US. the modified OECD equivalence scale is used. as demonstrated by Förster. The Bureau of Labor Statistics data suggests that consumer spending varies much less than income. The actual Orchinsky poverty line for single person households in the US ($9645 in 2004) is very comparable to the relative poverty line in many Western-European countries (Belgium 2004: €9315). the second quintile spent $14.S. $12. 0. 11. while price levels are also similar. which takes the combined value of 1 for the head of household. First.640 euros ($26. In 2008. for example. According to Eurostat the percentage of people in Germany living at risk of poverty (relative poverty) in 2004 was 16% (official national rate 13.382 PPP.256 euros/year. Generally the percentage for "relative poverty" is much higher than the quota for "strict poverty". the ―poorest‖ one fifth of Americans households spent on average $12.688 euros/year. which is based on a defined basket of goods. The U. while the ―richest‖ fifth spent $26. this comparison of poverty lines show that the higher prevalence of relative poverty levels in the . from which the poverty line is derived. Furthermore. 16% for 60% median). West Germany 974 euros/month. for the most prevalent household types both standardization methods show to be very similar. measure.5% in 2003).857 PPP).3 for children. equivalence scales are used to standardize household income to the level of a single person household. $12. To make incomes comparable among households of different sizes. Additional definitions for poverty in Germany are "poverty" (50% median) and "strict poverty" (40% median. When compared to the US Census poverty lines. The median household income is much higher in the US than in Europe due to the wealth of the middle classes in the US. By European standards the official (relative) poverty rate in the United States would be significantly higher than it is by the U.8 euros per month ($2.695. the poverty threshold in Western-European countries is not always higher than the Orshansky threshold for a single person family.644. national rate 1.Germany. the third $16. the fourth $19.004 PPP) per year.168. [22] The income distribution and relative poverty Although the relative approach theoretically differs largely from the Orshansky definition. For a family of four with two children below 14 years the poverty line was 1969.255.9% in 2003).

1% of all persons living alone. Although data regarding race and poverty are more extensively published and cross tabulated the family status correlation is by far the strongest.8% lived in poverty. In addition to family status.US are not an indicator of a more severe poverty problem but an indicator of larger inequalities between rich middle classes and the low-income households. in 2007 5. it is characterized by relatively large income inequality but also high levels of prosperity of the middle classes.4% of white persons. Poverty and demographics Camden.[23] By race/ethnicity and family status Among married families: 5.[25] and 14. Poverty and family status According to the US Census. It is therefore not correct to state that the US income distribution is characterized by a large proportion of households in poverty.[23] This number varied by ethnicity with 5. Pennsylvania. The 2007 poverty threshold for a three member family is 17.070.3% of black persons. New Jersey is one of the poorest cities in the United States. Poverty in Chester.[24] 8. race/ethnicity and age also correlate with high poverty rates in the United States.8% of all people in married families lived in poverty.6% of all persons in single parent households [23]and 19. . [23] as did 26.9% of Hispanic persons (of any nationality) [26] living in poverty.

Among single parent families: 26.7% of all people 19-64.6% lived in poverty.[23] This number varied by ethnicity with 18% of white persons [27] 27.1% of the general population lived in poverty: [29] 9. New Mexico.1% of all Asian persons 26. About half of those living in poverty are non-Hispanic white (19. Non-Hispanic white children comprised 57% of all poor rural children.[30] Poverty and age The US Census declared that in 2010 15. The study claims that in 11 states.[31] The non-profit advocacy group Feeding America has released a study (May 2009) based on 20052007 data from the U.The study was paid by ConAgra Foods.9% of all non-Hispanic white persons 12.1% of the general population lived in poverty: 22% of all people under age 18 13. South Carolina. Ohio. Census Bureau and the Agriculture Department. Kentucky. more than 20 percent of children under 5 are allegedly at risk of going hungry.[24] 40% of black persons.[23] This number varied by ethnicity with 30% of white persons.[25] and 30% of Hispanic persons (of any nationality) [26] living in poverty. and 9% of all people ages 65 and older[29] The Organization for Economic Co-operation and Development (OECD) uses a different measure for poverty and declared in 2008 that child poverty in the US is 20% and poverty among the elderly is 23%.9% of black persons [26] and 27% of Hispanic persons (of any nationality) [28] living in poverty Poverty and race The US Census declared that in 2010 15.[29] but poverty rates are much higher for blacks and Hispanics.6% of all Hispanic persons (of any nationality) 27. Among unrelated individuals living alone: 19.[32] .6 million in 2010).Texas. Louisiana. Tennessee.5 million children under the age of 5 are at risk of hunger in the United States.1% lived in poverty. Kansas. a large food company. Idaho and Arkansas.4% of all black persons.S. followed by North Carolina. which claims that 3. which has the highest rate.

to enough food for an active.[38] The poverty rate is 9.5% for individuals who were employed full time. the poverty rate was 21.083 for household headed by individuals 35-44.1% in single parent family headed by mother. eighty-five percent of American households were food secure throughout the entire year.3% to 3. the median earnings of household headed by individuals with less than a 9th grade education was $20. [42]The .1% for native born blacks suggesting race alone does not explain income disparity. Asian families have higher incomes than all other ethnic groups.[33] In 2008. Specifically.805 while households headed by high school graduates received $40. the 2005 median income of Asian families was $68. and families headed by individuals with professional degrees earned $100.11% of black women aged 30–44 without a high school diploma had a working spouse. The remaining households were food insecure at least some time during that year. and 47. at all times. the poverty rate for naturalized blacks is 11.[35]  In 1991.3% of children in two-parent families were likely to live in poverty.[39][copyright violation?] The poverty rate for native born and naturalized whites is identical (9.188 for household headed by individuals age 25-34 and $61. [41]  The relationship between tax rates and poverty is disputed. suggests high tax rates are inversely correlated with poverty rates. healthy life for all of the household members.7% in 2001 to 11. In 2007.605.[37] Although the reasons are unclear.[34] Factors in poverty There are numerous factors related to poverty in the United States.000.9% for black married couples and only 30% of black children are born to married couples (see Marriage below). 8.1% in 2002. A study comparing high tax Scandinavian countries with the U.[35]  In many cases poverty is caused by job loss. On the other hand. Not all minorities have low incomes. but only 2.124.  Income has a high correlation with educational levels. but increased to $50.750.5%. 19. however.8% compared to 25. For example. The prevalence of food insecurity rose from 10. work experience and additional education may be factors.6%).Food security Eighty-nine percent of the American households were food secure throughout the entire year of 2002.[40] Asians.456. report discrimination occurrences more frequently than blacks.  Income levels vary along racial/ethnic lines: 21% of all children in the United States live in poverty. the median 2009 income for households headed by individuals age 15-24 was only $30.5% for individuals who were unemployed. In 2007. about 46% of black children and 40% of Latino children live in poverty.[36]  Income levels vary with age. In 2007. meaning that they had access.6% of children lived with father in single parent family.957 compared to the median income of white families of $59. and the prevalence of food insecurity with hunger rose from 3. households headed holders of bachelor’s degree earned $77. For example. S. 31% of Asians reported employment discrimination compared to 26% of blacks in 2005.

it is possible that advocates for the different sides of this debate are basing their arguments on different ways of measuring poverty. but does have the nation's highest property taxes. both native and foreign born. According to Michael.poverty rate. both Switzerland and New Hampshire have a very high household income and other measures to levy or offset the lack of taxation.It is true however that in those instances. however. thus the accuracy of the current poverty threshold guidelines is subject to debate and considerable concern. New Hampshire has the lowest poverty rate of any state in the U. For example. yet there are some who also believe it is overstated." The panel was chaired by Robert Michael. income would include." The panel proposed a model based on disposable income: “ According to the panel's recommended measure. It is often claimed that poverty is understated. the official U. the value of non-cash benefits such as food stamps. and has very low taxes (46th among all states). including child care.. are also living in poverty themselves. poverty measure. namely those without a high school diploma. S. such as income taxes. In 1995. For example. the National Research Council's Committee on National Statistics convened a panel on measuring poverty. child-support payments. poverty measure "has not kept pace with far-reaching changes in society and the economy. is low in some low tax countries such as Switzerland. school lunches and public housing that can be used to satisfy basic needs. A comparison of poverty rates between states reveals that some low tax states have low poverty rates. The new measure also would subtract from gross income certain expenses that cannot be used for these basic needs. health-insurance premiums and work-related expenses.[44]  The conservative Heritage Foundation speculates that illegal immigration increases job competition among low wage earners. there have been a number of concerns raised about the official U. in addition to money received.[45] Much of the debate about poverty focuses on statistical measures of poverty and the clash between advocates and opponents of welfare programs and government regulation of the free market. former Dean of the Harris School of the University of Chicago.[43] New Hampshire has no state income tax or sales tax. Since measures can be either absolute or relative.S. Additionally many first generation immigrants.[46] ” . medical costs.S. The findings of the panel were that "the official poverty measure in the United States is flawed and does not adequately inform policy-makers or the public about who is poor and who is not poor. Concerns regarding accuracy In recent years. Switzerland has Universal Healthcare and a free system of education for children as young as four years old.

. or even a mixer in their kitchen. who devised the original goods basket and methodology to measure poverty. meaning that there are more households living in actual poverty than there are households below the poverty threshold. where the low-pay industry of agriculture is the largest sector in the economy and the majority of the population lacks a college education the median home price was determined to be $723. the basket of goods used to determine what constitutes being deprived of a socially acceptable miniumum standard of living has not been updated since 1955. a political scientist at the University of Arizona: “ The official poverty line today is essentially what it takes in today's dollars.. ” The issue of understating poverty is especially pressing in states with both a high cost of living and a high poverty rate such as California where the median home price in May 2006 was determined to be $564. The official poverty line has thus been allowed to fall substantially below a socially decent minimum.790.[47] A recent NPR report states that as much as 30% of Americans have trouble making ends meet and other advocates have made supporting claims that the rate of actual poverty in the US is far higher than that calculated by using the poverty threshold. and no possibility of home ownership. Mollie Orshansky. to purchase the same poverty-line level of living that was appropriate to a half century ago. the poverty line lost all connection over time with current consumption patterns of the average family. requiring an upper middle class income which only roughly 20% of all households in the county boast. In the Monterey area. updating their cost using the Consumer Price Index.430.S.[48][49] Such fluctuations in local markets are however not considered in the Federal poverty threshold and thus leave many who live in poverty-like conditions out of the total number of households classified as poor. or a car. San Jose or Los Angeles being higher than the state average. for that year furnished the basic data for the formula for the very first poverty measure. i. is at roughly 170% of the official poverty threshold. even though its intention was to measure such a minimum.Understating poverty Many sociologists and government officials have argued that poverty in the United States is understated. the point where a person is excluded from the nation's prevailing consumption patterns.[6] According to John Schwarzt. it is almost impossible for not just the poor but also lower middle class worker to afford decent housing[citation needed]. Updated thereafter only for inflation. finding that the actual poverty threshold. the current poverty line only takes goods into account that were common more than 50 years ago. used by the U. in 1955. Quite a few families then didn't have their own private telephone. government.e. adjusted for inflation.[47] While the poverty threshold is updated for inflation every year. As a result. updated the goods basket in 2000.[48] With half of all homes being priced above the half million dollar mark and prices in urban areas such as San Francisco. in 1963-65. .

by Kathryn Edin.6 million Americans deemed to be below the poverty level by the U. or a pair of stylish new sneakers for the son who might otherwise sell drugs to get them. clothing and medical care. if food stamps and public housing were successfully raising the standard of living for poverty stricken individuals. food. According to Edin. showed that the mothers spent more than their reported incomes because they could not "make ends meet" without such expenditures."[52] Moreover. they made up the difference through contributions from family members. In addition. or the Cable TV subscription for the kids home alone and you are afraid they will be out on the street if they are not watching TV. tend to own more appliances and larger houses than many middle-income Western Europeans. The measures are contingent on how we conceive of and define poverty. According to Edin: "No one avoided the unnecessary expenditures.S. government considers many citizens statistically impoverished despite their ability to sufficiently meet their basic needs. of the 43. According to a 2011 paper by poverty expert Robert Rector.S. a sociologist at the University of Pennsylvania. Swedish Libertarian think tank Timbro points out that lower-income households in the U. and church charity. Some critics assert that the official U. especially welfare benefits. .Overstating poverty Impoverished area near 125th Street in Harlem.S. the majority had adequate shelter.New York.[53] Some experts don't believe poverty can be accurately measured. the paper stated that those assessed to be below the poverty line in 2011 have a much higher quality of living than those who were identified by the census 40 years ago as being in poverty." said William "Sandy" Darity. [50] The federal poverty line also excludes income other than cash income. poverty definition is inconsistent with how it is defined by its own citizens and the rest of the world.[51] A 1993 study of low income single mothers titled Making Ends Meet. "There is no exact way of measuring poverty. such as the occasional trip to the Dairy Queen. Census Bureau in 2009. which was subsequently demolished for new commercial development.S. Thus. a professor of public policy and economics at Duke University. off-the-book jobs. then the poverty line figures would not shift since they do not consider the income equivalents of such entitlements. because the U. absent boyfriends.

immigrants. legislation." Advocates for the approach argue that traditional governmental poverty policies focus solely on supplementing the income of the poor. . allowing them to keep more of what they earn. These range in scope from neighborhood efforts to campaigns with a national focus. The Earned Income Tax Credit is viewed as the largest poverty reduction program in the United States." Fighting poverty See also: War on poverty and Welfare's effect on poverty There have been many governmental and nongovernmental efforts to reduce poverty and its effects. such as advocacy."Efforts to develop more refined measures have been dominated by researchers who intentionally want to provide estimates that reduce the magnitude of poverty. Efforts to alleviate poverty use a disparate set of methods. They target specific groups affected by poverty such as children. people who are autistic. and community organizing. social work. through programs such as Aid to Families with Dependent Children (AFDC) and Food Stamps. direct service or charity. or people who are homeless. Additionally. the Earned Income Tax Credit (EITC or EIC) is a credit for people who earn low-to-moderate incomes. This credit can reduce the taxes of working families and individuals. Recent debates have centered on the need for policies that focus on both "income poverty" and "asset poverty.education.

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