US Poverty & Inequality

Income distribution

division of income among income groups

wealth

the value of assets owned

money income

the household income from any source (includes income transfers, before taxes)

income transfer

monetary (cash) transfer from the government to a household in which nothing is returned

in-kind transfer

transfers of goods or services from the government to a household with nothing back in exchange

What year did the U.S income distribution start become less equal

1981

absolute poverty

the experience of hardship by some objective criterion. Basically, lacking the necessities to survive. measured with poverty rate

Poverty line

the level/line of income which mandates that all households who have income below it are considered poor.

incidence of poverty

the distribution of poverty within the country

poverty rate

the percentage of a population with income below the poverty line

official poverty

poverty despite any government assistance

the implications of poverty

food insecurity, homelessness, lack of access to health care

the feminization of poverty

women bear the greatest burden or poverty

causes of poverty (7)

• 1. recession- a decline in a nations GDP which leads to increasing levels of unemployment

• 2. low labor productivity - occurs for unskilled workers who have little skills, experience, and education:(

• 3. structural changes in our economy (causes unemployment)

• 4. low wages - like a minimum wage of 5$/hour

• 5. personal factors that make it hard to work (mental/physically unwell, caring for family, no experience)

• 6. demographics and discrimination/racism

• 7. government budget cuts - cuts in assistance programs which end welfare.

3,

Government Solutions to Poverty: Macroeconomic Policy for national employment

Policy by the federal government to influence the overall economy

Government Solutions to Poverty: Micro policies to raise labor productivity

1. 1. investment in human capital - spending for people to be trained/educated

2. 2. microeconomic policy - policy addressing specific occupations or geographical pockets of unemployment and poverty within the economy.

Universal Entitlements

Payments or programs for eligible people

Miscellaneous Solutions

addressing problems like discrimination and low wages

Government programs: public assistance programs

programs that aid low-income people

government programs: social insurance programs

SIP- a government program funded by payroll taxes on employers, employees, or both

social security - federal program that provides income transfers to retired workers, survivors of deceased workers, and the disabled.

safety net - policies protecting people from poverty

Welfare: Aid to Families with Dependent Children (AFDC)

A former welfare program that provided cash assistance to eligible low-income families that have children. Some people are concerned that it reduces the incentive to work and depend on welfare,

Welfare: Temporary Assistance for Needy Families (TANF)

TANF is a block grant for state run assistance programs. Block grants are money from the government which have to used within federal guidelines for assistance programs to those in need.

Trickle down philosophy

cutting taxes for the rich will result in them taking risks to invest (leading to jobs) which benefits will ultimately trickle down and benefit everyone. A very conservative bew

relative poverty

lacking the resources to live an average living standard. It is measured with income distribution