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Poverty in the United States

From Academic Kids

There is significant disagreement about poverty in the United States; particularly over how "poverty" ought to be defined. Using radically different definitions, two major groups of advocates have claimed variously (a) that the United States has eliminated poverty over the last century; or (b) that it has such a severe crisis of poverty that it ought to devote significantly more resources to the problem.

Much of the debate about poverty focuses on (a) statistical measures of poverty and (b) the clash between advocates and opponents of welfare programs and government regulation of the market. Measures of poverty can be either absolute or relative.

Contents

Measures of poverty

The official poverty measure


Since the 1960's, the United States Government has defined poverty in absolute terms. When the Johnson administration declared "war on poverty" in 1964, it chose an absolute measure. 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; having insufficient income to provide the food, shelter and clothing needed to preserve health.

The "Orshansky Poverty Thresholds" form the basis for the current measure of poverty in the U.S. Mollie Orshansky was an economist working for the Social Security Administration (SSA). Her work appeared at an opportune moment. The Johnson administration had declared "war on poverty" in early 1964. Orshansky's article was published later that year. Since her measure was absolute (i.e., did not depend on other events), it made "winning"; this war more likely. The newly formed United States Office of Economic Opportunity adopted the lower of the Orshansky poverty thresholds for statistical, planning and budgetary purposes in May 1965.

The Bureau of the Budget (now the Office of Management and Budget) adopted Orshansky's definition for statistical use in all Executive departments in 1965.

The measure gave a range of income cutoffs, or thresholds, adjusted for factors such as family size, sex of the family head, number of children under 18 years old, and farm or non-farm residence. 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.

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 poverty thresholds were set at three times the cost of the economy food plan. 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.

Two changes were made to the poverty definition in 1969. Thresholds for non-farm families were tied to annual changes in the Consumer Price Index (CPI) rather than changes in the cost of the economy food plan. Farm thresholds were raised from 70 to 85 percent of the non-farm levels.

In 1981, further changes were made to the poverty definition. Separate thresholds for "farm" and "female-householder" families were eliminated. The largest family size category became "nine persons or more."

Apart from these changes, the U.S. government's approach to measuring poverty has remained static for the past forty years.

Current poverty guidelines

2005 HHS Poverty Guidelines[1] (http://aspe.hhs.gov/poverty/05poverty.shtml:Cite_sources)

Persons in
Family Unit
48 Contiguous
States and D.C.
Alaska Hawaii
1 $ 9,570 $11,950 $11,010
2 12,830 16,030 14,760
3 16,090 20,110 18,510
4 19,350 24,190 22,260
5 22,610 28,270 26,010
6 25,870 32,350 29,760
7 29,130 36,430 33,510
8 32,390 40,510 37,260
For each additional
person, add
 3,260  4,080  3,750

SOURCEFederal Register, Vol. 70, No. 33, February 18, 2005, pp. 8373-8375.

Relative measures of poverty

Another way of looking at poverty is in relative terms. "Relative poverty" can be defined as having significantly less access to income and wealth than other members of society. In 1999, the income of a family at the poverty line was $17,020. This was 28.49 percent of the median income in the U.S. In 1959 a family at the poverty line had an income that was 42.64 percent of the medium income. Thus a poor family in 1999 had relatively less income than a poor family in 1959.

Current poverty rate

The official poverty rate in the U.S. in 2002 was 12.1 percent. This was up from 11.7 percent in 2001. This means that 34.6 million people were below the official poverty thresholds. This is 1.7 million more than the 32.9 million in poverty in 2001. The poverty rate for children remained constant at 16.7 percent between 2001 and 2002. However, the number of children in poverty increased to 12.1 million in 2002, up from 11.7 million in 2001.

Perceived flaws in U.S. poverty measure

In recent years, there have been a number of concerns raised concerning the official U.S. poverty measure. In 1995, the National Research Council's Committee on National Statistics convened a panel on measuring poverty in the U.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."

The panel was chaired by Robert Michael, former Dean of the Harris School of the University of Chicago. According to Michael, the official U.S. poverty measure "has not kept pace with far-reaching changes in society and the economy." The panel proposed a model based on disposable income:

According to the panel's recommended measure, income would include, in addition to money received, the value of noncash benefits such as food stamps, school lunches and public housing that can be used to satisfy basic needs. The new measure also would subtract from gross income certain expenses that cannot be used for these basic needs, such as income taxes, child-support payments, medical costs, health-insurance premiums and work-related expenses, including child care.

Food security

Eighty-nine percent of American households were food secure throughout the entire year 2002, meaning that they had access, at all times, to enough food for an active, healthy life for all household members. The remaining households were food insecure at least some time during that year. The prevalence of food insecurity rose from 10.7 percent in 2001 to 11.1 percent in 2002, and the prevalence of food insecurity with hunger rose from 3.3 percent to 3.5 percent. This report, based on data from the December 2002 food security survey, provides statistics on the food security of U.S. households, as well as on how much they spent for food and the extent to which food-insecure households participated in Federal and community food assistance programs.

Causes of poverty

There are numerous perceived direct and indirect causes of poverty in the United States. They include:

  • Unfavorable economic conditions
  • Mental Illness
  • Substance abuse
  • Poor education
  • Historic and ongoing racism: The gross disparities among impoverished people in the United States along racial lines has lead many to believe that historic and/or ongoing rascism is responsible for much of the poverty in the United States today.
  • Limited job opportunities appear to exist for some races and ethnic groups. This is reflected by the low-income nature of large sections of the economy, as divided along racial/ethnic lines:
  • McDonald's is the largest employer of African American youth.[2] (http://www.media.mcdonalds.com/secured/company/operator_assoc/nbmoa/history/index.html)
  • 21 percent of all children in the United States live in poverty, but 46 percent of African American children and 40 percent of Latino children live in poverty. (Center for the Future of Children, The Future of Children. Vo. 7, No 2, 1997).
  • Unstable home life - Such as abuse, or an absent parent.

More information

The Other America by Michael Harrington (ISBN 068482678X)

See also

Poorest places in the United States

External Links

References

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