Poverty & Income Inequality
How do we balance the assistance we give the poor but do not discourage work? The labor markets which determine how much workers are paid do not take into consideration how much a family really requires to pay for all expenses like health care, clothes, food, housing, and transportation. The labor markets actually create inequalities of income and as a result create issues leading to poverty. Poverty is measured by the U.S. Census Bureau as a direct result of the Office of Management and Budget 's (OMB) Statistical Policy Directive 14. The Census Bureau uses thresholds that vary by size and composition of families to determine levels of poverty. To sum it up, if a families total income is less than the set
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There are some economists who advocate for a national poverty line and still other economists who think that the poverty line should be adjusted for the twenty-first century, due to the various government assistance programs whose value are not currently taken into consideration when determining the poverty line. In addition to the poverty line we must consider the implications that the safety net programs and the poverty trap set for those that fall below the poverty live.
Poverty Trap and Safety Net Programs
Another way to balance assistance and not discourage work is to consider the poverty trap and the governmental safety net programs available to assist those below the poverty line. The poverty trap is found when a group within a society are provided with the basic necessities of living such as food, housing, healthcare, and income to name a few. This assistance becomes problematic when the people have reduced incentive to work due to the benefits of the assistance programs. When a person can have more disposable income when they do not work because the amount of assistance is reduced equally by the amount of money gained by working. Some of the more common safety net programs, in the U.S., are TANF (Temporary Assistance for Needy Families), EITC (Earned Income Tax Credit), SNAP (Supplemental Nutrition Assistance Program), and Medicaid, all of which are designed to help bring people above
People generally enjoy working and being productive members of society. The positive effects of the Welfare Reform Act is moving to eventually end poverty in America and promote economic growth. According to the 2005 report measuring welfare dependents “Poverty in 2003 remains much lower than in 1996, the year of passage of the Personal Responsibility and Work Opportunity Reconciliation Act. The official poverty rate for 2003 was 12.5 percent, compared to 13.7 percent in 1996.” ( Gil Crouse, Susan Hauan, Julia Isaacs, Kendall Swenson and Lisa Trivits, 2005 ) States that design welfare-to-work policies that emphasized getting recipients into jobs by shifting to “work-first” welfare systems can modify program rules to allow more earned income,
Although many citizens typically make enough to live and support a family, there are still cases where individuals lack the financial support needed to administer aid to their household. A few factors that hinder members of the workforce are job availability, child care necessities, transportation, and educational requirements. For example, there are people that want to work, but after expenses are paid for transportation, childcare, etc. there is very little left
The view that the rich get richer and the poor get poorer has been heard repeatedly in reference to America’s income inequality. Though ironic, it comes as no surprise that America, a continent that easily trumps other countries in terms of wealth would be affected by the issue of poverty at such high levels. While much has said regarding the poverty levels, many economists, educators and scholars feel that the income inequality in America may be the reason why it is difficult to live and maintain a middle class lifestyle or to rise out of poverty into the middle class in the current economic state. With this in mind, the only way America, has a chance of lessening or eliminating poverty altogether is by understanding how it exists.
“Poverty is the worst form of violence.” Mahatma Gandhi’s words still ring true in today’s society. Poverty is nothing to sweep under the rug or put on the back burner. While many statistics state that poverty is decreasing, other sources state the opposite. Poverty is a hot topic in the U.S., foreign countries, and speaks true about many genders, ethnic groups, and children.
One of the United States most effective tools is The Earned Income Tax Credit which encourages work and improvement of family poverty (Center for American Progress, 2016). In the year of 2014 Earned Income Tax Credit helped more than 6.2 million Americans in the fight against poverty (Center for American Progress, 2016). A disadvantage to the Earned Income Tax Credit, is experienced in workers whose income is relatively low without qualifying children (Center for American Progress, 2016). In these
For most of America’s history, farmers, entrepreneurs or shop owners could live their entire lives without getting any assistance from the federal government except maybe mail. But those days are long gone. In 2012 the total number of Americans on government assistance or welfare reached 4,3000,000. Many of which are 4th or 5th generation Welfare recipients. For whatever the reason, we have become a culture of dependency in which poverty is a trap. Long-term recipients loose job skills, work habits as well as work contacts. For this reason the government should require recipients to work as much as they can. It could be called “workfare” and could help recipients increase potential long-term earnings.
In the United States alone, the amount of people in poverty is 14.5%. That equates to 45.3 million people in 2013. In a country like America, one of the world’s superpowers, it’s embarrassing to admit. But the main issue is to fix issues like these with the minimum wage and welfare. The minimum wage applies to workers who got a job whether because they were in school or because they had not gone to college and had no other option. Most of the country lives off as minimum wage workers as only 1% of the world’s population has a college degree. Minimum wage needs to be adjusted to modern inflation. But the minimum wage allegedly does not affect poverty at all says a large demographic and does not need to be adjusted. The minimum wage makes up a lot of the country and should be adjusted or modified to today’s standard of living.
If federal and state programs would look at the amount individuals, who may only make a smidge above the cut of line, have after taxes are taken out, they would be able to see just how bad off these people really are in comparison to those who were able to get on the programs and are living albeit easier lives. Like the solution idea provided by Isaacson, if the U.S. were to turn the welfare system into a basic income type program, not only would they be providing assistance to lower class individuals and families and allotting them the means to escape the entrapment of the lower class, but they would also be saving the U.S. some money too. Even having something as simple as a basic minimum wage that is not based on the cost of living, which varies between person to person, and allows for citizens to live comfortably enough that they don’t have to worry about getting more than one job to support the bills and debts they must pay off. This is just a thought, but could be beneficial and is a means for lower class to climb up the social status
Based on the poverty threshold, or the smallest annual salary required to live as determined by the government, more than forty million people in America live in poverty (“UC Davis Center for Poverty Research”). That’s forty million people who make less money than the bare minimum required to support themselves or their family. Of those forty million, nineteen and a half million make less than fifty percent of the bare minimum they need to support themselves (“UC Davis Center for Poverty Research”). The only reason many of these people or families can support a stable life is thanks to many government welfare programs. Worst yet is
Income inequality is growing in the United States, and the problem is much worse than most people believe. For children, growing up poor hinders brain development and leads to poorer performance in schools, according to a study published this week in JAMA Pediatrics.
In the book, Poverty and Inequality, it is noted that many people look at the economy and poverty status in the 60s to gauge how to solve poverty today (1997). The sixties saw the longest and strongest economic growth in US history. The unemployment rates went from twenty two percent to thirteen percent. The economy grew 4.3 % every year. This leads many economic analyses to tie the bustling economy with the declining poverty level. The eighties saw two short recessions before the second longest and strongest growth in US history. The unemployment rate went from just over ten percent to just over eight percent. It is important to note that the poverty rate only fell slightly during this period. By 1990, the poverty rate
In his lecture, Dr. Wright offered three kinds of structural proposals for inequality and poverty that included an interesting concept called Basic Income Grants. With this concept, he believed every citizen deserve to be provide with a basic income that will help them live above the poverty line. In addition, those who are in this program aren’t required to follow any sort of work requirements in order to have more freedom during their work hour. This sort of program will certainly help to reduce the amount of people who are living below the poverty line currently, because there is no longer the ‘’pick-and-choose’’ system. Everyone will have an equal chance of having access to the program, without worrying about unfair advantages. While Basic
Poverty for centuries has been a very severe issue that has troubled many nations while impeding economic developments and progress. Poverty stricken countries are majorly concentrated in the continents of Africa and Asia. Continents like the Americas and Europe have globally been recognized as been wealthier yet still many parts of these ostensible countries face massive cases of poverty. Most at times, countries with high populations owing to high birth rates face the most cases of poverty. The definition of poverty can be boundless in the sense that poverty entails so many subsections as it sometimes gets complicated to group everything under one umbrella. Society tends to focus more on the tangible aspects of poverty because many people associate poverty with lacking money and it makes sense because poverty in terms of lacking money is a major problem affecting almost every country in the world. Even though it is debatable that poverty can be physical, intellectual, spiritual and even emotional, it is best to talk about the lack of money and economic developments in this essay. With reference to the oxford English Dictionary, poverty is state of being extremely poor and the state of being inferior in quality or insufficient in amount. Reflecting on this definition given, I deduced that malnutrition and hunger can define poverty. In the light of this, I think poverty is lacking a comfortable place of shelter, being ill and not having access to a better
Poverty has been evident since The Great Depression in the 1930’s. Since then, there has been an attempt to lower poverty level, though only a 2.5% decrease has been seen since 1965. It is argued that we do not need another war on poverty since nothing has seemed to help, but this is an issue that affects everyone. As Mark Bittman stated in his article “Why We’re Fasting” “This is a moral issue; the budget is a moral document.” Poverty can be improved if more emphasis is added to helping individuals or families out of poverty, instead of assisting them through their lives, by improving existing laws or implementing new laws centering around the idea of a fixed income.
Many Americans believe that America has one of the most powerful economies that is involved in the global market and the best average living standards. Since the creation of the United States it has been known as the land of endless opportunities, regardless of social or economic classes. Under this philosophy, all citizens should have equal rights and given equal opportunity to progress in the workforce. However many Americans are living full lives and do not have financial obstacles to get over. Even so, millions of Americans are still faced with poor living conditions and struggle with providing for their families basic needs. Whether Americans believe poverty and inequality exist in America exists or not, the authors in three different articles:” Culture of Success” by Brink Lindsey, “A Great Time to Be Alive?” by Matt Yglesias, and “Born Poor and Smart” by Angela Locke, and “The War Against the Poor Instead of Programs to End Poverty”by Herbert J. Gans, shared ideas on how to help fix the problems of the impoverished community and address the cause of the problem. The four articles also explain different biases that the impoverish have to endure everyday.