Poverty in the United StatesAs America is the wealthiest and most bountiful nation in the world, it is no surprise that many Americans think of hunger and poverty occurring only in developing countries. While most Americans have encountered someone suffering from hunger and poverty in the United States, few of us may have actually realized it. The face of hunger and poverty in the United States is quite different from the images we often see in developing nations. Rather than outright starvation or homelessness, the face of hunger is a child who is malnourished because her parents do not earn enough to buy healthy food and sometimes has to skip meals. The face of a poor person in the United States is a single parent who works full time, but still can’t afford to pay for food, rent, child care, medical bills, and the costs of transportation to work. It is ironic that hunger and poverty still persist in the world’s wealthiest nation. In September 2009, the U.S. Census Bureau released 2008 data on poverty, incomes and health insurance coverage. According to the Census press release, real median household income in the United States fell 3.6 percent between 2007 and 2008, from $52,163 to $50,303. The Census data (and other sources) reveal trends in who lives in poverty in the U.S.: Poverty
Health Insurance
Other Data Sources
Racial and Ethnic Discrepancies
Women
What is the official U.S. government measure of poverty?All statistical measures of poverty are based on the poverty thresholds, the original version of the federal poverty measure. Poverty thresholds were originally created in 1963-1964, based on U.S. Department of Agriculture (USDA) data on the cost of basic foods, “food budgets designed for families under economic stress,” and the percent of income that low-income families spent on food. In the early 1960s, low-income families spent about 1/3 of their income on food, so, in a nut shell, the threshold was set at three times the cost of the USDA Thrifty Food Plan. The thresholds are updated annually for inflation by the Office of Management and Budget using the Consumer Price Index. The final weighted average 2008 thresholds were $14,051 for a family of two, $17,163 for a family of three and $22,025 for a family of four. See the Census Bureau page: http://www.census.gov/hhes/www/poverty/povdef.html The Department of Health and Human Services issues a simplified measure of poverty called the poverty guidelines. These are used for administrative purposes, such as determining eligibility for government programs.
Guidelines for Alaska and Hawaii are somewhat higher. What is wrong with the poverty guidelines?Many critics say that the guidelines don’t reflect the costs that families actually have to cover. For example, food takes a smaller proportion of family outlays than it did in the early 1960s, while housing takes a larger share than it used to. Legislators and government agencies are aware of the problems with the threshold, and so eligibility for programs is often set at some level above the poverty guidelines. For example, eligibility for Medicaid may be set at 133 percent of poverty. Shawn Fremstad of Center for Economic and Policy Research suggests, “A new measure should meet two fundamental criteria. First, it should represent the minimum income a family needs to ‘get along’ or ‘make ends meet’ at a basic level. Second, while retaining a focus on income deprivation, it should encompass other forms of deprivation, including hunger, substandard housing, and lack of health insurance. In doing so, it would cut across the various conceptual and issue ‘silos’ that characterize anti-poverty policy and advocacy.” See: http://spotlightonpoverty.org/ExclusiveCommentary.aspx?id=10ba8b9a-303c-4cdf-9d84-ce4cbeea6378 Darrick Hamilton and William Darity, Jr., writing in The American Prospect, September 2009, say that poverty measurement should consider a family’s assets as well as its income, recognizing the extent of the racial wealth gap. They say that shifting from an income-based to a wealth-based test for transfer programs can be an effective non-race-based way to reduce racial inequality. Reid Cramer of New America Foundation wrote in 2003 that considering assets would more realistically capture the dynamic and complex relationship between economic well-being and household resources over time. |
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