Market Failure Poverty and Income Inequality

The current poverty rate in America is 13.5 percent (US Census Bureau). That measures out to roughly 43.1 million Americans. What exactly is poverty? Poverty means not having enough money to meet basic needs including food, clothing and shelter. However, poverty is so much more than just not having enough money. Poverty is not having access to a doctor or medications you may need, poverty is not having access to a good education. Poverty can be the people who are barely able to pay for food and shelter and simply can’t afford other expenses such as car repairs, field trips with their children and any other extracurricular activity.

Increased income inequality is shown to increase the poverty rate. This is shown as more income moves apart from lower income brackets to upper income brackets. The Economic Policy Institute estimated that increased income inequality has increased 5.5 percent in from the year 1979 to 2007. This increase in poverty is reflected directly from income inequality as the bottom laborers in a business are working harder and gaining less, as the top workers, the CEO’s, and other executives are spending less time working, and more time counting their money. Income deprivation has been the largest driver of change in poverty rate, much above other factors such as economic growth, education, and race.

The U.S. is among the richest countries in the world today, yet millions of people in America still live below the poverty level. The number of Americans living in poverty is increasing day by day as well as the number of children. Poverty in America has become a great threat to children’s wellbeing as they are affected emotionally, socially, and even in their school performance (Wood 720). Poverty in America is mainly caused by lack of jobs. Many people who live in poverty in the United States is due to lack of jobs and getting jobs with minimum wage. Another cause of poverty is due to the rise in the cost of living. Poverty exists in America despite the fact that is among the richest nations in the world.

1. According to the U.S. Census Bureau, in 2012, there were 46.5 million Americans in living poverty and the official U.S. poverty rate was 15.0 percent. (U.S. Census Bureau)

As of the 2016 census, approximately 323.1 million people reside in the United States of America. 14.5% of those Americans living in poverty, meaning that 45.3 million Americans are affected by poverty, an immense increase from 8 million in 2008. 97.3 million people who occupy the U.S are considered low income and 41 million people struggle with hunger in the United States. 1 in every 2 people are considered poor or receive low income. Poverty is not equal among various demographics, for instance, in 2015, 12% of men lived in poverty in the USA, and 14.8% of women lived in poverty and among non-citizens the poverty rate is 22.8%.

Poverty is a big problem in the United States. According to Charles Zastrow, “in 2012 over forty-six million people, about fifteen percent of our population was living below the poverty line” (p. 117). In other words, there were a great amount of people living below the poverty line the poverty line. The poverty line is the minimum level of income needed for secured needs of life according to the government. Poverty causes malnutrition, homelessness, School dropout’s drug abuse, and much more.

Poverty is not only an individual problem, but a societal problem. Harrell R. Rodgers wrote an article, “Why are People Poor in America?” Rodgers gives two categories of theories that are used when cultural /behavioral or structural/economic. Behavior/culture theorists look at the behavior, culture and values of the poor as the reason for poverty. While structural /ecIn western culture statistics are an excessively used tool in describing social issues. Numbers help explain a situation, but in excesses, can dehumanize a population. A serious social issue that suffers from desensitization is poverty. Poverty, as it is defined by Webster, is the state or condition of having little or no money, goods, or means of supporting; the condition of being poor. The condition of poverty plagues many American families. According to the Census bureau, 15.1 percent of the United States population falls below the poverty threshold. 15.1 percent does not draw the same effect as the actual 46.6 million individuals living in those circumstances. In the United States, poverty has become a growing problem. There are 15 million more people living in poverty today than in the year 2000 (U.S. Bureau of the Census 2013). The poverty threshold, developed by Molly Orshansky, is a tool used to help indicate how many Americans are in poverty. According to the census, 46.6 million of America’s total population makes less than the poverty threshold for a family of four. The condition of being

“Poverty is about not having enough money to meet basic needs including food, clothing and shelter” (“What is Poverty,” 2016). In the United States, there are 45 million Americans are living in poverty (“45 Million Americans,” 2014). In order to determine if one is living in poverty, the United States Census Bureau has established a poverty line that they then measure, according to the individual’s income and their family size (“Poverty Thresholds,” 2016; “Poorest Cities in America,” 2016). Since the recession in 2008, many states have seen a rise of families living in poverty. Poverty is a vicious cycle and has devastating effects on young children.

The census can be defined as the scientific method of collecting data as records for the government or state use for the proper control of public properties. However, what completely alters the whole process is its highly comparative analytical stance adopted which inserts in elements of difference. The census is a crucial political instrument for good governance in the proper administration and organization of data collection of the population. It functions as a tool of differentiation and recognition in its attempt of grouping and segmenting the population/citizens. Therefore,

In 2010, about 46.2 million people were considered poor. The nation’s poverty rate rose to 15.1 percent, whereas in 2009, 14.3 percent of people in America were living in poverty (Censky, 2011). That is an increase of 2.6 million people in 2010. In the United States, the federal poverty line – an absolute measure of annual income – is frequently used to determine who is categorized as poor (Ferris & Stein, 2008, 2010). Currently the government defines the poverty line as an income of $11,139 for an individual and $22,314 for a family of four (Censky, 2011). In sociology, poverty can be defined using two terms – relative deprivation and absolute deprivation. Relative deprivation is a comparison between people and social class. With

The U.S Census Bureau stated in 2012, that “the median household income was $51,000” (www.CongressionalDigest.com 12). The nation’s poverty rate in 2012, was fifteen percent which stands for 46.5 million people living at or below the poverty line (www.CongressionalDigest.com 12). Household income over the past five years has declined since 2007 by 8.3 percent (www.CongressionalDigest.com 12). Women who worked full time and year round, earned 77% of that of men working full time (www.CongressionalDigest.com 12). “In 2012, 6.3% of married couple families, 30.9% of families with a female house holder, and 16.4% of families with a male house holder lived in poverty” (www.CongressionalDigest.com 13). According to the Office of Management and Budget, “using the consumer price index, the average income for poverty for a family of four was $23,492” (www.CongressionalDigest.com 13). In 2012, 21.8% of children under the age of eighteen lived in poverty, (16.1 million) (www.CongressionalDigest.com 13). “The U.S recession has pushed the number of poor children to the highest level since 1994” (Duncan, Kalil, and Ziol-Guest 28).

Poverty has been on a incline since the economic downturn in 2007. Poverty is defined as “the state of being inferior in quality or insufficient in amount”, but a more modern definition used today is “in state of being extremely poor”. According to “Poverty in the United States” a report done by Congressional Digest, the poverty line in 2012 was 15.0 percent, which represents 46.5 million people living at or below the poverty line, and was 2.7 points higher in this year than in 2007. The article also stated that in 2012, the family poverty rate and the number of families in poverty was 11.8 percent and 9.5 million and the median income for households was $51,017, which means many of these households have students who become eligible for free lunches. In Lindsey Layton’s article “Most Public

The poverty level in the U.S. is normally based on annual income figures. In 1995, a family was identified as poor if their income equaled $15,569. Adjustments, however, vary with inflation and family size. In short, by current U.S. standards, many poor people elsewhere in the world would be living near or in absolute poverty, surviving on just over $200-$500 per year (Funk & Wagnall 1).

Market Failure is due to an imbalance or a change in supply and demand of certain goods and services this, consequently, can lead to a shortage of products or an unnecessarily large inventory. Market failure can be caused by many different factors such as positive and negative externalities, imbalance of the price and quality of goods and services and also unrealistic projections for demand along with a plethora of other factors. The perfect market, is an efficient organisation that meets all the wants and desires of the public without any wastage of supplies and resources. However, there are many failures to the perfect market that cause it to be ineffective. This essay will highlight and explain the main causes of market failure, how they can be opposed and the effect market failure will have on society.

With that said, the United States Census Bureau published the official poverty level report of 2014 in which 46.7 million people are living below quality standard. This alarming fact of recorded data, has the number of poor people or people living in poverty ranked as one of the largest since the start of publishing poverty statistics. In 2014 the poverty rate was 14.8%, which was down from 15.1% recorded in 2010. Household cash income for families was “less than half of the poverty line, or about $10,000 a year for a family of four” (World Hunger Education Service, 2016). It represented 6.6% of all people and 44.6% of those in poverty.