The prevalence of poverty in the United States is of increasing concern to many in government and makers of public policy. According to a humanitarian organization, Poverty USA (2014), there were 47 million poor people in 2014, which translates to a rate of 15%. This rate is around 2.3 points higher than in 2007 or 2008 (U.S. Census Bureau).
Poverty does not affect all equally. The poverty threshold as defined by federal government is $24,000.00 for a family of four people. People who are affected by poverty include those who earn minimum wage and still find it difficult to live well, seniors who are retired and get fixed income or even wage earners who are suddenly unemployed.
These people are prevalent in cities and rural areas. In terms of demographics, 13% of men and 16% of women lived in poverty in 2014, with 6% married, 16% single parent with no wife and 31% single parent with no husband. One more factor to consider is that poverty rate for people with a disability was 29%. This translates to more than 4 million disabled people living in poverty.
In case of women and minorities the situation is worse. The poverty rate in blacks and Hispanic communities was above 20% with women finding it difficult to earn a living. In case of elderly women the poverty rate was double that as compared to men above 75 or older (White, G., 2015). According to Poverty in America, in spite of investments in infrastructure and capital expenditures, the development patterns over the last 40 years are not even. There is increasing income disparity and this has increased with the liberalization and globalization of the American economy. Around 25% of counties had low per-capita incomes with high unemployment and increasing dependence on government funds, which points to economic concerns.
According to Peter Edelman (Poverty in America: Why Can’t We End It? 2012.), there are basically two problems of poverty, one is low wage work and the other is almost no work. In many parts of the country these two factors overlap.
Many people in America keep going in and out of poverty; some do not have work continuously, while others are very poor and stay that way from one generation to the next. Today, more than 103 million people or almost 25% of the population are poor as defined by government.
More than 20 million of these are in very deep poverty with income less than $9,000 for a family of three. Six million of these are only surviving on food stamps. This goes to prove President Reagan’s statement right; that America waged a war on poverty but poverty won. Edelman believes that the public policies have been quite successful.
The Social Security Act of 1935 and activity in the 1960s have helped improve many of the poverty and economic indicators. Medicaid and Children’s Health Insurance Program has helped many low income families improve their lives. Food stamps have helped in curbing starvation and food related poverty.
Income Tax Credits and Child Tax Credits helped raise the incomes of low wage workers. Pell Grants have helped millions of students to get a decent college education. The Supplemental Security Income program has helped the elderly and disabled to earn better. In addition, other initiatives like Head Start, housing vouchers, child care, legal services and so on, have helped people improve their living conditions.
More than 16 million people have been added to Medicaid through the Affordable Care Act with billions being invested in improving education and the lives of the very poor through the Recovery Act. With all these efforts, the government saved around 40 million people from falling into poverty in the year 2010.
However, the level or rate of poverty has remained quite unchanged since 1970 and is much worse today. The lowest rate was seen in 1973 at 11.1%, which has risen sharply over the years. There are many contributory factors which have helped the poverty rate remain stable. One is the trend in family composition, followed by lack of industrialized jobs vanishing to other countries and the advent of automation in manufacturing.
With technology and automation, the economy did grow but the benefits of the economy did not reach the bottom of the pyramid. Jobs which were sent abroad and lost were replaced by other type of jobs, but paid lower wages. Average wages went up only 7% from 1973 to 2011. Almost 50% of the jobs today pay less than $33,000 per year, with almost 25% paying less than the poverty line income.
One main factor is also the changing family size and lifestyles. Many single mother homes are unable to support a family. This type of family composition has risen from 12.8% in 1970 to 26.2% in 2010 overall and by 37.1% and 52.8% for African Americans, respectively. Consequently around 49% of children living in such homes are poor.
Deep poverty has more than doubled since the year 1976. This is mainly due to the curtailing of cash assistance for families with children and the reduction of Welfare from 14 million to 4.2 million. With the enactment of the Temporary Assistance for Needy Families law, less than 20% of the families with poor children receive TANF. This proportion has decreased from 68% to 27% today.
Despite all these efforts, there is an urgent need to understand how to tackle this issue in the future. The critical aspect in this is the creation of new jobs. The best way to curtail poverty is to provide employment, economic growth and prosperity. Policies which help in creating a vital union, higher minimum wage, health care, child care and cost of housing can bring about equality in incomes to some extent and help people get some income.
But problems abound. The structure and type of jobs are changing. There are many low-wage jobs today and there is an increase of wages with high end jobs in China, India and other emerging economies. There is no visible increase in the wages for many American jobs. This needs to be the key focus area to ensure that Americans get a good paycheck.
Although TANF has been enacted, there are more than 20 million citizens at the bottom of the pyramid, and these benefits do not help get people to half the poverty line, with a majority not receiving any benefits or food stamps at all.
The safety net for the poorest children has been destroyed, especially for single mother families, with one in four children in deep poverty.
Children – from pre-natal care to early childhood to education should be the prime focus area. Poverty is also increasing pressures on the criminal justice system, raising many concerns in the area of civil rights. Another problem is the geographic location of poor people. Inner cities, Appalachia, the Mississippi Delta or Indian Reservations see a high concentration of poor. These have been neglected over the past 4 decades.
Another factor which we should keep in mind is race and gender. Whites form the majority of the people suffering from poverty. Though poverty rates are also high in African Americans, Latinos and American Indians, the wealth disparity is higher. Many of the policies to increase income levels tend to favor the whites than minorities (Edelman, P. 2012)
One of the ways to change things for the better is to make the rich pay a higher share to run the country - increase minimum wages, provide health care and education. More tax breaks are being given to people at the top of the pyramid. This needs to change. The wealth and incomes of the top 1% of the people is growing to the detriment of the other 99%. Money is helping them gain power and power is helping them earn more money.
Historically, it has been seen that such disparities have led to massive unrest and progressive change. Younger generations are more liberal and do not trust power in the institutions. The politics of honesty has to take shape and win. People with lower incomes will vote for candidates whose ideologies resonate with the people.
People will make this change happen. People can decide and vote for candidates who support the poor. Once people use their power, history will write a new chapter in America.
Edelman, P., Poverty in America: Why Can’t We End It? New York Times. Web.
3 May 2016.
Edelman, P., The State of Poverty in America. The American Prospect. Web.
3 May 2016.
Poverty in America, Poverty in America Today. Poverty in America.org. Web.
3 May 2016.
Poverty U.S.A., Poverty Facts. Poverty USA.org. Web.
3 May 2016.
U.S. Census Bureau, Poverty. U.S. Census 2014. Web.
3 May 2016.
White, G. B., America’s Poverty Problem Hasn’t Changed. The Atlantic. Web.
3 May 2016.