Poverty vs. The Economy
Poverty is a lack of goods and services necessary to maintain a minimal adequate standard of living. The definition of the term adequate varies, however, with the general standard of living in a society and with public attitudes toward deprivation. No university accepted definition of basic needs exists because poverty is a relative concept. In poorer countries it means living at the brink of subsistence, while in our country few improvised families confront starvation, although many suffer from undernourishment. A key issue in the area of poverty is inequality. Inequality has been a problem in all societies. No society distributes income evenly. Despite all the conceptual and technical problems of measurement, the government has devised a widely cited poverty index that reflects the different consumption requirements of families depending on their size and composition, on the sex and age of the family head, and on weather they live in rural or urban areas. Based on past surveys, the designers of the poverty index determined that families of three or more person spend approximately one-third of their income on food. Thus, the poverty level for these families was, therefore, set at three times the cost of the economy food plan. For smaller families and persons living alone, the cost of the economy food plan was multiplied by higher factors in order to compensate for the larger fixed expenses of smaller households. The poverty thresholds are updated every year to reflect changes in the consumer price index but overall rises in standard of living. (levington, page 147) Another issue is that the poverty index has several flaws. First, it does not allow for regional variations in the cost of living or for higher costs in the central city areas, where many of the poor are concentrated. Second, the flood costs for the budget were designed for temporary or emergence use and are thus inadequate for a perment diet because they provide only the barest subsistence. Finally, the government statistics fall to take into consideration nonmonetary benefits and assets in determining the number of poor. If these were counted, the numbers in the official poverty ranks would be reduced. The growing gap between the poverty level and median family income demonstrates the inaccuracy of adjusting a poverty level for price increase but not for rising living standard and productivity gains. Alternative definitions and concepts also have a major impact on the poverty estimates that if transfer payments or income support programs such as social security are not counted, then about twenty percent of all American families lived in poverty during 1988, Government income transfers are, however, included in the official poverty index, and this fact reduced the relative number of destitute Americans. If in-kind programs such as Medicaid, subsidized housing, and food stamps were also included, then the percentage in poverty might have been further reduced, (Fitchen, page 97)
Another issue is that some particular groups are more likely to experience poverty than others. For instance, blacks are three times as likely to be poor as whites. Families headed by women are nearly five times more likely to be poor than other families. Families where the head has no more than eight years of schooling are nearly five times as likely to be poor compared to families headed by college educated person. Minority and female headed units are not only more likely to be poor but less likely to escape from poverty. The poor face multiple impediments to self-sufficiency, including joblessness, less than a high school education, and dependence on welfare.
Their are four different major groups of poor people. They are the elderly, children, employed working-age adults, and unemployed working-age adults. Each of these groups has different problems that are addressed by...
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