Poverty and Economic Inequality Chapter 8. Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal Copyright 2007, Brooks/Cole,

Poverty and Economic Inequality

Chapter 8

Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth SegalCopyright 2007, Brooks/Cole, a division of Thomson Higher Education

Defining Poverty

• Measures of poverty

– Absolute – uses a fixed, predetermined amount below which people are defined as poor

– Relative – uses societal standards to assess the minimum needed for a reasonable living situation, and anything less than that standard is considered poor

Which is easier to use? An Absolute or Relative measure

Values and beliefs make it difficult to agree on what is necessary and what is not, so it

is easier to use an absolute measure


2005 Poverty Guidelines

• 1 person $9,570

• 2 people $12,830

• 3 people $16,090

• 4 people $19,350

• For each additional person, add $3,260


Poverty Statistics

• 37 million people were poor in 2004

• That represents more than one out of every eight people (12.7%)

• 17.8% of children lived in poverty, more than one out of every six children

• 10.4% of people over 65 years of age lived in poverty


Poverty over the decades for all people

• During the 1960s, 17% lived in poverty

• 1970s - 12%

• 1980s - 14%

• 1990s - 14%


Poverty over the decades for children

• During the 1960s, 21% were in poverty

• 1970s - 16%

• 1980s - 20%

• 1990s - 21%


Family structure makes a difference

• Married couple families have a poverty rate of 5.3%

• Single female-headed households have a rate of 26.5%

• Single male-headed households have a rate of 12.1%

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Rate

Married

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Individuals are poorer than families

• Unrelated individuals 9.6 million

• Rate 20.4%

• Families 7.2 million

• Rate 9.6 %


Poverty and Race

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Individual

WhiteBlackLatino

• Poverty varies greatly by race in this country

• White – 8.0%• African American – 24.1%• Latino - 21.8%


Distribution of Household Income in 2004

• Highest 20% 50.1 %• Fourth 20% 23.2 %• Third 20% 14.7 %• Second 20% 8.7 %• Lowest 20% 3.4 %


Share of Income by Households

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Lowest 2nd 3rd 4th Highest

Income


Income changes over time

• From 1993 to 1997, the top 1% of earners saw their income grow 41.4%

• During the same years, the bottom 90% of earners saw their income grow 4.6%


• Those top 1% earned, on average, $517,713 in 1997

• The rest earned, on average, $23,815


Work and poverty

• Those who worked in 2002 had a lower poverty rate, 5.9% compared to 21% for those who did not work

• 38% of those people in poverty worked, of whom almost a third worked full-time


Antipoverty Policies and Programs

• Temporary Assistance for Needy Families (TANF)

– Temporary cash public assistance– Replaced AFDC in 1996– Lifetime limit of 5 years, with no more than 2

year periods of consecutive receipt of benefits– Strict work requirements


Success of TANF?

• From 1996-2003, number of TANF recipients dropped from a 12.3 million recipients to 5 million recipients

• While many left and found work, the vast majority were in jobs that paid $7-8 per hour

• 2/3’s of those who left TANF and work do not have employer-sponsored health insurance


Other Cash Assistance Programs

• Supplemental Security Income (SSI)– Cash assistance for low-income people 65 years and

older and people with disabilities

• Earned Income Tax Credit– Federal income tax credit program for families with

full-time year-round workers whose incomes are low enough to qualify for a credit through the tax process

• Minimum Wage– An economic policy that sets the lowest wage

employers can pay, $5.15 in 2006


In-kind Benefits

• Food Stamps– Credit for purchase of food items

• Supplemental Food Program for Women, Infants, and Children (WIC)– Food and nutrition supplements for young

children

• Public Housing– Reduced rent dwellings or vouchers


Conflicting Values and Beliefs

• Undeserving versus Deserving poor people

• Personal failure versus system failure

• Self-sufficiency versus social support

• Helping those we know versus those who are strangers

• Sympathy versus empathy

Documents

Poverty and Economic Inequality Chapter 8. Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal Copyright 2007, Brooks/Cole,