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. The latest Census Poverty and Health Insurance Data released September 13, 2011, paints a grim and sober picture in numbers about poverty in America along with important insights into what has worked to reduce the some of the impact. Of course these numbers do not speak about those working and near the poverty line or the impact on feelings of hope and dignity. About 46.2 million Americans (15.1 percent) lived below the poverty line ($22,050 for a family of four) in 2010 and the poverty rate for children under 5 in the U.S. is 25.9 percent. The percentage of Americans in poverty in 2010 was the highest since 1993 and the poverty rate has increased by 2.6 percent since 2007. 6.7 percent of all people, or 20.5 million, had income below half of their poverty threshold, up from 6.3 percent in 2009. Median household income, after factoring in inflation, was lower in 2010 than in 1997. The Census data offered some good news (and proof of what we knew already): the Earned Income Tax Credit (EITC) lifted 5.4 million and SNAP (formerly the Food Stamp program) 3.9 million people above the poverty line in 2010 under the Census' alternative computation. In addition, the Census found that 49.9 million Americans (16.3 percent) were without health insurance coverage in 2010. Again, the Census data shows that safety net programs for children work: as private insurance coverage for children dropped by 800,000, Medicaid and the Children's Health Insurance Program (CHIP) covered 700,000 more kids in 2010. For more on the latest Census data, see the Coalition on Human Needs' Poverty Day 2011 page for analyses from many organizations and other resources. On September 7, the U.S. Department of Agriculture released its annual report about food security in the U.S. In 2010, 17.2 million U.S. households were designated food insecure, meaning that last year they had difficulty putting food on the table. Over six million more households were food insecure in 2010 than in 2000. And in August, the Annie E. Casey Foundation (AECF) released its KIDS COUNT Data Book, which is designed to measure the well-being of America's children over time (this book covers the years 2000-2009). AECF looked at ten different measures, such as infant mortality, teen birth rates, child poverty, and unemployment in the household, to assess child well-being. The report concludes that the recent recession has made things much harder for many children living in America, resulting in stagnation of overall child well-being since 2000. While there have been decreases in some areas like teen drop-out rates and teen death rates, those gains have been offset by increases in child poverty, unemployment among parents, and children in single-parent households. For example, the child poverty rate has increased 18 percent since 2000, all but wiping out any gains made in the late 1990s (between 1994 and 2000, child poverty dropped 30 percent). This means that 2.4 million more children were living in poverty in 2009 than in 2000. In addition, 31 percent of children live in households where NO parent has full-time, year-round work. When it comes to child well-being, we are clearly going in the wrong direction. 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 2009 thresholds were $13,991 for a family of two, $17,098 for a family of three and $21,954 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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