Poverty

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Definitions of poverty range from narrow economic to broader social terms; poverty is the state of having little or no money and few or no material possessions. More broadly poverty refers to a level of material deprivation that is greater than subsistence living. Even more generally poverty has been described as a condition of not having the means to address basic human needs such as clean water, nutrition, health care, education, clothing and shelter. Regardless of the definition, poor individuals suffer physically, emotionally and socially.

The poor are not a single homogenous group. They include people without jobs who live far below or just below the federal poverty line. The poor also includes people with jobs, known as the working poor. In hard economic times, more and more working and middle-class people fall into poverty for the first time. Today some refer to this group as the new poor.

1.

Who's Poor? Drawing on the data in the readings from Unit VII-A (Who’s Poor), identify the main groups of people who live in poverty. Please update data from the US Census; include some current data and historical trends.

The poverty rate represents an average over the entire population and does not really tell us who is well-off and who is worse off. Blacks and Hispanics have poverty rates that greatly exceed the average. The poverty rate for all blacks and Hispanics remained near 30 percent during the 1980s and mid-1990s. Thereafter it began to fall. In 2000, the rate for blacks dropped to 22.1 percent and for Hispanics to 21.2 percent— the lowest rate for both groups since the United States began measuring poverty. By 2010, however, the poverty rate for both groups had risen to around 27 percent.

The Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC), from which the official poverty statistics are drawn, implemented a new question in 2003 to collect information on race, allowing individuals to report one or more races. There is no way of knowing how people who reported more than one race would have reported their race under the old question. Those who defined themselves as black only or as black and some other race had the highest poverty rates—27.4 percent. Among those of Hispanic origin, who can be of any race, the poverty rate was 26.6 percent. The poverty rate for Asians was 12.1 percent. Whites not of Hispanic origin had a poverty rate of 9.9 percent in 2010.

The existing official measure of poverty has been widely criticized. Under the procedures by which the official poverty rate is calculated, only cash income is counted in determining whether a family is poor; cash welfare programs count, but benefits from noncash programs, such as food assistance, medical care, social services, education and training, and housing are not included. Taxes paid, such as Social Security payroll taxes, and tax credits, such as the Earned Income Tax Credit, are also excluded from poverty calculations. Because government spending on means-tested noncash benefits and tax credits has increased more rapidly than spending on means-tested cash benefits over the years, ignoring noncash benefits is an increasingly serious omission if we want a broad picture of the impact of government programs on poverty.

In 1995 a panel of the National Academy of Sciences (NAS) published an influential report on revising the poverty measure (Measuring Poverty: A New Approach, edited by Constance F. Citro and Robert T. Michael). Over the years, the Census Bureau has calculated alternative poverty rates using various experimental adjustments to the official poverty rate. It has, for example, expanded the definition of income to take into account some noncash income, including government benefits.

In March 2010, the federal government released information on a proposed Supplemental Poverty Measure (SPM) to offer a more complete picture of the depth and demographics of poverty, as well as the effects of public...
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