When you finish this chapter, you should: Describe how poverty is measured, summarize the demographics of poverty in the United States, and show how the percentage of the population that is poor has changed through the last 40 years; enumerate the significant problems associated with the federal government’s official poverty rate; list and describe the myriad programs that exist for the poor;. | Chapter 26 Poverty and Welfare Chapter Outline MEASURING POVERTY PROGRAMS FOR THE POOR INCENTIVES, DISINCENTIVES MYTHS AND TRUTHS WELFARE REFORM Welfare “Relief” programs to help the poor began in the 1930s during the Great Depression. Many programs were created and others greatly expanded in the 1960s and 1970s. What is Poverty? Is it an absolute concept that is the same across the world or Is it a relative concept that depends on the incomes of others in the area? Can we say an American is poor if they have a living standard that is higher than the average person in the rest or the world? A poor person today has a higher living standard than an average person had 100 years ago. Does that mean that today’s poor person is not really poor? Measuring Poverty Poverty Line: that level of income sufficient to provide a family with a minimally adequate standard of living The poverty line was originally established in the 1960s. Surveys indicated that poor families of four spent an average . | Chapter 26 Poverty and Welfare Chapter Outline MEASURING POVERTY PROGRAMS FOR THE POOR INCENTIVES, DISINCENTIVES MYTHS AND TRUTHS WELFARE REFORM Welfare “Relief” programs to help the poor began in the 1930s during the Great Depression. Many programs were created and others greatly expanded in the 1960s and 1970s. What is Poverty? Is it an absolute concept that is the same across the world or Is it a relative concept that depends on the incomes of others in the area? Can we say an American is poor if they have a living standard that is higher than the average person in the rest or the world? A poor person today has a higher living standard than an average person had 100 years ago. Does that mean that today’s poor person is not really poor? Measuring Poverty Poverty Line: that level of income sufficient to provide a family with a minimally adequate standard of living The poverty line was originally established in the 1960s. Surveys indicated that poor families of four spent an average of one-third of their income on food. A survey established the cost of a minimally adequate diet and that figure was multiplied by 3 to get the poverty line. Similar surveys established the poverty line for other family sizes. The figure is updated annually for inflation using the CPI. Poverty Lines 1999 Family of 4 the poverty line is $17,029 3 the poverty line is $13,290 2 the poverty line is $10,869 1 the poverty line is $8,501 Measuring Poverty (continued) Poverty Rate: the percentage of people in households whose incomes were under the poverty line. In 1999 it was Poverty Gap: the amount of money that would have to be transferred to households below the poverty line to get them out of poverty. In 1999 it was $62 billion. Who’s Poor Those under the poverty line are disproportionately Women A poverty rate 3 points higher than that of men Children a poverty rate twice that of adults Minorities a poverty rate 3 times higher than that or whites High School Dropouts a poverty rate
