Section 3 Poverty
Preview
Objectives
After studying this section you will be able to:
- Define who is poor, according to government standards.
- Describe the causes of poverty.
- Analyze the distribution of income in the United States.
- Summarize government policies intended to combat poverty.
Section Focus
Despite the tremendous success of our nation's economy, millions of Americans remain poor. The government develops public policies and programs to try to combat poverty.
Key Terms
- poverty threshold
- poverty rate
- income distribution
- food stamps
- Lorenz Curve
- enterprise zone
- block grant
- workfare
What image comes to mind when you think of poverty? You might associate poverty with a homeless person on a city street or a poorly clothed child in a small rural house. Despite the success of the American economy, many Americans lack sufficient food, clothing, and shelter. In this section you'll read about the nature and causes of poverty, the distribution of income in the United States, and government programs designed to combat poverty.
The Poor
As you have read, the United States Bureau of the Census conducts extensive surveys to gather data about the American people. Then its economists analyze the data and organize it to reveal important characteristics, such as how many families and households live in poverty. The Census Bureau defines a family as a group of two or more people related by birth, marriage, or adoption who live in the same housing unit. A household is all people who live in the same housing unit, regardless of how they are related.
The Poverty Threshold
According to the government, a poor family is one whose total income is less than the amount required to satisfy the family's minimum needs. The Census Bureau determines the income level, known as the poverty threshold, needed to meet those minimum needs. The poverty threshold is the income level below which income is insufficient to support a family or household.
The poverty threshold, or poverty line, varies with the size of the family. For example, in 2004, the poverty threshold for a single parent under age 65 with one child was $12,490. For a family of four with two children, it was $18,850. If a family's total income is below the poverty threshold, everyone in the family is counted as poor.
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Figure 13.8 Poverty Rate, 1964–2002
Source: U.S. Census Bureau
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