What is Poverty?• Subpar conditions compared to neighborhood, region, or country

• Definition is subject to change

• Ex: A person who earned $2000 a year in 1900 might have been considered “well off”. Same earnings but in the later 20th century would have been considered poverty- stricken.

Poverty in the USThe United States defines poverty through a ratio issued each year by the Census Bureau.

1Developed in the mid 1960’s. There has been no major changes since its initial development. It is updated annually to account for inflation.

1.Data from the US Department of Agriculture and fraction of income spent on food used to calculate the ratio.

Calculating Poverty Ratio

Criticism on Methods of Measure

-Criticized for excluding several factors that affect economic well-being and not being updated.

-National Academy of Sciences offered a different method of measurement. This measurement tends to show a higher level of overall poverty.

-Differences in measurements are usually less than 1%.

Poverty Definition Fluctuations

Poverty In a Family of Four

Per Year: $23,050Per Month: $1,921Per Day: $69.00Per Family Member: $17.00

Historical Real Median Household Income for the United StatesDate US2011 $50,5022010 $51,6252009 $52,6602008 $54,3492007 $55,0392006 $54,0472005 $53,274

Per year: $50,502Per Month: $4,208Per Day: $175Per Family Member:$44.00

Los Angeles-Long Beach, CA HUD Metro FMR Area (CA)Two Parents, Two Children Item CostMonthly Housing $1300Monthly Food $643Monthly Child Care $1025Monthly Transportation $401Monthly Health Care $312Monthly Other Necessities     $467Monthly Taxes $359Monthly Total $4506Annual Total $54078

Budget for a Family of 4

(According to the Economic Policy Institute)

Medicaid: provides health coverage for low-income children and adults, More than 58 million people rely on Medicaid services today

(SNAP): Supplemental Nutrition Assistance Program is the nation’s most important anti-hunger program.  In 2012, it helped almost 47 million low-income Americans to afford a nutritionally adequate diet in a typical month.

The Gap between Median Income and Poverty line for a family of four

Affected: Children• Nearly 1 in 10 children (9.8 percent) lived below half of the poverty line in 2011.

• Representing 16.4 million kids living in poverty during 2011.

• Children living at poverty rate is 16.4 million or 22%

Child Poverty Rate in Selected Developed Nations

Raise Federal Minimum Wage

• Increasing the federal minimum wage to $10.10 by July 1, 2015, would raise the wages of about 30 million workers, who would

receive over $51 billion in additional wages.

• Across the phase-in period of the minimum-wage increase, GDP would increase by roughly $32.6 billion, resulting in the creation of approximately 140,000 net new jobs (and 284,000 job years) over

that period.

Democrats vs. Republicans• Each party has a different belief system on how to

deal with poverty.• Democrats and Republicans’ ideas about what

policies they believe will be the most effective in fighting poverty.

Democratic Party• The Democratic Party is currently the largest political party

in the United States.• Has historically represented farmers, laborers, labor

unions, and religious and ethnic minorities.• The party began supporting welfare spending programs

that targeted the poor in the 1930s.

Republican Party• The Republican Party is the second largest political party in the United States.

• Do not believe in financial government aid.• Government should not get involved with business.

Role of the State• Republicans:

– Attribute most of poverty to poor decisions made by people.– Believe government programs like welfare hinder economic progress.– Believe in minimal state involvement. – Generally believe that the government’s role in society is to maintain order, enforce

social contracts, and maintain national security.– Tend to think the government should not try and solve poverty. – Ultimately, the market will solve the problem.

• Democrats: – Government should take a more activist role in the market.– Blaming capitalism. – Government does have the power to fight poverty because it can eliminate inequality

and  exploitation.

Current Policies on Poverty• Currently, Republicans are not doing much to help the poverty level in

the U.S. decrease.• Paul Ryan, (R-WI), proposed a plan creating budget cuts that will

overwhelmingly aim at low-income Americans.• President Obama recently addressed the situation by stating:

– Protect poor and vulnerable people as deficits are reduced.– Raise new tax revenue in a manner proportional to the capacity of the people to

contribute.– Protect tax policies such as the earned income tax credit and the child tax credit that

help reduce poverty.– Slow the growth of health care costs and find bipartisan solutions for the common

good.

Trend:Rich Richer

Poor Poorer• The riches come out of recession becoming richer

• although some decrease in value of assets, the rich’s livelihood is not affected

• provided with good investment entry points when market is depressed

• While the poor, who are impacted the most by recessions, come out poorer.

• impact on them could mean loss of home and/or job: livelihood threatened.

• decrease in tax revenue directly affects welfare programs fundings

• not benefited from the depressed market since they had little to no capital to invest.

Historical Numbers and Rates

steady increase from steady increase from 80s onwards, despite 80s onwards, despite peace and international peace and international economic growth in this economic growth in this period, marked with period, marked with “feats” such as Ronald “feats” such as Ronald Reagan’s revival of Reagan’s revival of private sector, and Bill private sector, and Bill Clinton’s budget surplus. Clinton’s budget surplus.

downward slope amid downward slope amid war efforts in Vietnam war efforts in Vietnam and the onset of Arms and the onset of Arms Race and Space War Race and Space War with the USSR. with the USSR. Government was more Government was more focused on social focused on social welfare during this welfare during this period too.period too.

Coming out of the recession, Americans “share” their pie....

This is This is where most where most of us fit in, of us fit in,

now now imagine the imagine the

poor.....poor.....

The Trend is Clear, but do you really know how bad it

is ?we think the rich makes about 100x of what the poor makes

Reality is....

of the nation’s wealth goes to

the7% shared among...

the 1% took home 24% of the nation’s wealth in 1976; now do you see the trend?

SourcesWaldron, Travis. "Two-Thirds Of House GOP's Budget Cuts Come From Programs For Low-Income Americans | ThinkProgress." ThinkProgress. N.p., n.d. Web. 15 Apr. 2013. <http://thinkprogress.org/economy/2013/03/18/1735811/gop-budget-low-income-cuts/?mobile=nc>.

"Obama address hits on social policy issues faith-based groups advocate - Bread for the World: Have Faith. End Hunger.." Homepage - Bread for the World: Have Faith. End Hunger.. N.p., n.d. Web. 15 Apr. 2013. <http://www.bread.org/media/coverage/news/obama-address-hits-on-social.html>.

Merritt, Hillary. "The poverty debate: Democrats and Republicans on how to solve poverty - Atlanta Poverty | Examiner.com." Welcome to Examiner.com | Examiner.com. N.p., n.d. Web. 15 Apr. 2013. <http://www.examiner.com/article/the-poverty-debate-democrats-and-republicans-on-how-to-solve-poverty>.

"Democratic Party Facts." MoneyMatters101.com. N.p., n.d. Web. 15 Apr. 2013. <http://www.moneymatters101.com/politics/demfacs.asp>.

Chart Book:SNAP Helps Struggling Families Put Food On The Table. Center on Budget and Policy Priorities. Web. 15 April. 2013. http://cbpp.org/cms/?a=view&id=3744/

U.S. Department of Agriculture (Snap Program);US, Census Bureau estimates of Individual below 130% of poverty).

2013 Federal Poverty Guidelines. Families USA The Voice for Health Care Consumers. http://familiesusa.org/resources/tools-for-advocates/guides/federal-poverty-guidelines-html

Economic Outlook, Analysis and forecast. Better Policies For Better Lives. 16 April. 2013. http://Oecd.org/economy/

The Economic Policy Institute. Working Economics. April 14. 2013. http://epi.org/blog/census-poverty-date-fiscal-debate/

Official U.S. Poverty Rate remains high, middle class Income declines. University of Washington. April 14. 2013. http://Washington.edu/news/2012/09/12/official-u-s-poverty-rate-remains-high-middle-class-incomes-decline

Planet America. What America buys. April 14. 2013. http://npr.org/blogs/money/2012/04/05/149997097/what-americans-buy>

U.S. Department of State. Congressional Services Reports. April 14.2013. http://fpc.state.gov/c18185.htm>

United States Census Bureau. April 14.2013. http://census.gov/hhes/www/poverty/data/threshld/index.html>

income disparity potentially a cause for financial crisis.http://www.nytimes.com/2010/08/22/weekinreview/22story.html?_r=0

 distribution of wealth http://www.nytimes.com/2012/03/26/opinion/the-rich-get-even-richer.html

trends of income inequality http://moneymorning.com/2013/03/06/the-frightening-picture-of-u-s-income-inequality/

http://www.npc.umich.edu/poverty/#3

http://www.census.gov/hhes/www/poverty/about/overview/measure.html