From EconWiki
Jump to: navigation, search

Poverty is the state of one who lacks a usual or socially acceptable amount of money or material possessions. [1]

Poverty and Inequality in the United States

Poverty levels are typically determined based on income and consumption levels. But evidence, and the voices of poor people themselves, have shown that poverty has many more dimensions. One of the biggest challenges that researchers, economists, and government branches face is identifying poverty. What defines poverty? This is a very important question that concerns policy implementation. In order for the government to best use their assets to improve societal standards, variables must be properly identified. Variable identification is critical to assure that the right target sector has been selected. Many different types of measuring sticks are used throughout the world to determine poverty levels in the world. Poverty means hunger, lack of medical treatment, and poor access to basic services, such as electricity and water supply. It means being unable to send children to school and often needing them to work instead. Poverty means a lack of assets—such as land or savings—and thus extreme vulnerability to shocks due to economic downturns, family illness or natural disasters. It means social exclusion, and a constant feeling of insecurity and stress based on an uncertain future.

Poverty in the United States still exists and has yet to be eradicated, however periods of strong economic growth have helped reduce poverty rates. The percentage of people living in poverty in 1959 stood at 22.4 percent, and by the year 1978 dropped as low as 11.4 percent. Since 1978 the percentage of people living in poverty hasn't fluctuated much. In 1998 the percentage of people in poverty was found to be close to the same as it stood at 12.7 percent. In that same year 26.1 percent of all African Americans lived in poverty, and it was even higher at one point (1979), where 31 percent of blacks were noted to be poor.

In 1997 the richest one-fifth of American families made up 47.2 percent of our country's overall income. On the other hand, the poorest one-fifth of people in our nation accounted for only 4.2 percent of our country's income, and even more so, the poorest 40 percent made up only 14 percent of our income.

Many Authors have chronicled the transitions of the American poor including Michael Harrington in his 1962 novel "The Other America". In this book he discusses the ways in which the one time majority that is the impoverished citizen has shifted into the forced silence of those trapped in the cycle of poverty. The lack of influence Harrington attributes to the fact that for the first time in the History of the United States legislators have the ability to ignore the poor and create a national persona in which America has "conquered" inequality and poverty. In this dream world social initiatives are now unneeded and outdated. The fallout from this new idea can be seen in the opinions of many men and women across the country that the few impoverished people in the country are that way because they are choosing to live off of the dole rather than get a job. The fact however could not be more opposite as many studies have shown that many Americans who fall below the poverty line are not that way because they are against work rather that they cannot find employment or are underemployed.

references "Poverty." Web. 24 Apr. 2012. <http://www.worldbank.org/bd.>.

Poverty Threshold

The poverty threshold (or poverty line) is the minimum level of income deemed necessary to achieve an adequate standard of living. [2] The poverty threshold is calculated based on the total cost of all essential resources consumed by the average person in a year. The amount spent on rent, the largest of the costs, is paid special attention to by economists. The poverty threshold is determined by size of household, the 2011 estimate establishes the poverty threshold for a single individual household at $11.491. A four person household is impoverished at a household income below $23,018 per year in 2011. This poverty threshold is established by the federal government and applies to the entire country, makes no distinctions for different cost of living between states and fails to reflect expenditures beyond the basket of food which yields its calculation.


  1. http://www.merriam-webster.com/dictionary/poverty
  2. "http://www.irp.wisc.edu/faqs/faq1.htm". Institute for Research on Poverty
Personal tools