POLITICS OF POVERTY GOV 312L

test review 1: PPT1

What is poverty defined as?

the inability to obtain goods and services understood as sufficient for socially defined minimal needs

What does a family of four need to in order not to be considered poor?

social security administration: single person (x)

couple (x+y)

family of four (x+y+2z)

When was the SS administration established?

1935 part of FDR’s New Deal

What is the SS administration?

independent agency= administers social insurance program (retirement, disability, and survivors’ benefits)

62k employers

2014: 21% of gov expenditure

Austin- 1936

What is the problem with the poverty line?

does not vary by location and cost of living varies lots

How does the US Census Bureau Measure Poverty?

\n It uses a set of money income thresholds that vary by family size and composition \n • If a family’s total income is less than the family’s threshold, then that family and every individual in it are considered in poverty \n • The official poverty thresholds do not vary geographically, but they are updated for inflation using the Consumer Price Index

When can poverty status not be determined?

institutional group quarters (prisons, nursing homes)

college dormitories

military barracks

living situations without conventional housing

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For unrelated individuals under age 15 (such as foster children) because income questions are asked of people age 15 and older, and if someone is under age 15 and not living with a family member, we do not know their income \n • Since their poverty status cannot be determined, they are excluded from the “poverty universe.”

What is inequality?

Very different from poverty, it deals with \n differences between those on the top and the \n bottom

\n How do we measure inequality? MONEY!

Often, by quintiles (⅕=20%): looking at the \n income of the lowest and highest quintiles

What is the most commonly used measure of inequality?

GINI INDEX AND GINI COEFFICIENT

range from (0.0)- perfect equality

to (1.0) perfect inequality- these values do not exist

Generally where is greater equality located?

Nordic countries (0.2) and Japan (0.22)

Where is the greatest inequality?

Sierra Leone (0.7)

What does tax evasion do?

reduces government revenue

creates further inequality because the wealthier have more opportunities to avoid paying taxes

no correlation between the level of tac evasion and a country’s wealth or type of political regime

Trends in poverty?

the 2021 US poverty rate is projected to fall to a new low

child poverty is projected to be cut by more than half

number of ppl living in extreme poverty has decreased

Example of a generous rich person?

Joan Kroc- 18.5 m aids, 225m for NPR, 1.7Bn for Salvation Army, peace studies center at Notre Dame, U of San Diego

Ronald Mcdonald Houses

15m to assist flood victims

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How has the majority of humanity lived for millennia?

in poverty

with a few aristocrats and merchants being well off but most were extremely poor

What did people rely on for most of humanity?

reliance on animate sources of energy, i.e., humans or animals

exceptions- water mills, grinding, etc

What appeared in the 18th century?

crude industries: metallurgy, smithing

What followed the industrial revolution?

Major problems and dislocations

Where were the first industrial cities in the world?

Northern England (Manchester, Liverpool, Birmingham, Newcastle) and in Scotland (Glasgow)

What bad things were occurring during the industrial revolution?

Working conditions were appalling “rambo” capitalism

What is Rambo capitalism?

every man for himself, maximizing profits while minimizing wages

What happened to old trades? (industrial revolution)

They became outdated, obsolete- the blacksmith is gone and replaced by a machine that produces more efficiently

What happens to cost as goods become mass-produced?

per-unit cost goes down and price goes down

What else happened during the industrial revolution regarding labor?

the use of child labor becomes common and has remained so in some places 250 years later

Who was an early proponent of capitalism?

Adam Smith (1723-90) giant of social sciences

What did The Theory of Moral Sentiments (1759) - adam smith state?

skeptical and ironic view of individuals striving for material goods and wealth

concerned with ethics and charity

establishes an intellectual framework for his later work…WEALTH OF NATIONS

What did Wealth of Nations state (1776)- adam smith?

How a nation and its citizens could become wealthier

our individual need to fulfill self-interest results in societal benefit

rejection of government interference in market activities

government should only serve three functions

What three functions should the gov serve under the wealth of nations by adam smith?

national defense (border protection), law enforcement, public works (education etc.)

What were Smith’s views on poverty?

Alleviation of poverty was his central concern

•treated poverty not just as a condition of economic deprivation but as a cause of social isolation and psychic unease

a true measure of a nation’s wealth is the wages of “the laboring poor

•“they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labor as to be tolerably well fed, clothed, and lodged”

How did Smith feel about inequality?

considered it a double-edged sword and a separate problem of poverty

high degree of inequality as an inevitable result of flourishing commercial society and regarded a certain level to be helpful as a means of encouraging productivity and political stability

one the other hands, he thought that extreme economic inequality leads people to sympathize more readily with the rich than the poor, and this distortion in our sympathies, in turn undermines both morality and happiness

Edinburgh tomstone?

Adam Smith

Where was the industrial revolution (1750-1840) mainly located?

Great Britain, continental Europe, and the United States

What happened during the industrial revolution (1750-1840)?

Switch from an animate source of energy to inanimate sources (steam?)

expansion of productivity

\-engines, railroads, machines (“spinning jenny.” multi-spindle frame for spinning wool or cotton – revolutionized textile production)

Who was Thomas Malthus?

father of demography

•a pessimist: Industrial Revolution brings trouble à. Said it would lead to the exponential growth of human populations (whereas agricultural production – and thus, food – would only grow arithmetically)

•humanity was destined to live bad lives because of this imbalance between human and agricultural growth rates

•Soon there won’t be enough food to go around

What Thomas Malthus’s solution for over pop.?

War, Pestilence (plague, epidemics), famine, disease

What does “Malthusian” Mean?

•A term related to his theory that population tends to increase at a faster rate than its means of subsistence and that unless it is checked by moral restraint or by disease, famine, war, or another disaster, widespread poverty and degradation inevitably result.

Who was David Ricardo (1722-1823)

an economist, building on MalthusIron Law of Wages- nothing we can do about it

David Ricardo: •why are most people poor? why do they receive low wages?

•if there is a shortage of workers- the factory owners will have to raise wages to attract more people - as soon as people are better off, they will have more children - with more labor around, and wages would decrease again

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What did Malthus and Ricardo both ask?

are we creating a monster (a permanent underclass) with the Industrial Revolution?

Who was Thomas Carlyle (1795-1881)?

a Scottish philosopher and social commentator

called economics “dismal science” b/c of what it was analyzing and what it was predicting

WHAT HAS CAPITALISM UNLEASHED?

\-ONE OF THE FEW PHILOSOPHERS WHO WITNESSED THE INDUSTRIAL REVOLUTION BUT STILL KEPT A NON-MATERIALISTIC VIEW OF THE WORLD

very gloomy, Dickensian pic of the world

What occurred in the second half of the 19th century in Britain?

•Enclosure Acts: lands used for grazing, pastures, etc., were gone, and people were forced off the land

•people forced to move to cities got low-skill, low-wage jobs

•10-12-hour workdays, often worked by candlelight (workers had to buy their own candles, using gun-powder (bad combination)

•appalling work conditions

What occurred in mid-19th century Ireland?

•1845-52: Potato Famine in Ireland

–poor Irish lived in late-Iron Age conditions

–potato was one crop that did well in Ireland

–potatoes dominated diet

–in 1849, a major infestation of potatoes; when they were gone, nothing could replace them

–about 2 million Irish left the island for England and the USA (huge influx into big Eastern cities)

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Who was Karl Marx (1818-1883)?

•German philosopher, economist, sociologist, revolutionary socialist, author of *Das Kapital*

•went *way* beyond Malthus and Ricardo, and tried to explain all of human history

–every economic system contains “the seeds of its own destruction.”

–capitalism’s two antagonist classes: the bourgeoisie (owners of the means of production) and proletariat: two have unalterably opposed goals

–maximize profits & minimize wages vs. higher wages & better work conditions

•this tension within capitalism cannot be resolved except by…REVOLUTION

Proletarian revolution? Marx

thesis vs. antithesis, out of which comes a synthesis, a new social, economic, and political system

•Marx thought that the coming of a new economic system –communism – was *inevitable*

•did not say *when* just that

–workers will win, out of it a new system, socialism,

–eventually socialism will evolve into communism (where workers will own the means of production \[the factories, lands, etc.\])

•capitalism unleashed extraordinary forces

•the 19th century in which the dominant economic force was the emerging capitalism; lots of gloomy predictions about what was going to happen

No one cares about the poor…

for millennia, the question of “why are people poor?” never really came up; that’s just the way things were, it was assume that

Who “Deserves” Help?

•who is poor, who is not; who deserves some help and who does not?

•the question of the ‘deserving’ and ‘undeserving’ poor (often in Washington circles)

•are there certain circles in society who deserve help (and some that don’t)

•‘deserving’ poor deserve some assistance: historically: orphans, widows, handicapped people

–people who are poor through “no fault of their own”

•  where that assistance is going to come from is a different question (state, city, church, charitable organization)

Who are The ‘Undeserving’ Poor?

•usually a classification reserved for able-bodied male poor who just don’t want to work (but have the capacity to), ‘they deserve a kick in the pants, get up and start going!’

•lots of grey areas: just how handicapped are you?

•who decides if you’re deserving or not: private organization? Church? State?

•if you’re unwilling to work, sometimes you need to be punished

•people who don’t work sometimes are thrown into prison (socialism)

Why is a segment of our society poor?

This question was unasked and unanswered until the 19th century

.once industrialization arrives, philosophers, economists, etc. start thinking about this question

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What does great productivity open way to?

opens way to cheap goods and, perhaps, assistance to some

What is the US Civil War considered?

first industrial war

Why is the US civil war considered the first industrial war?

large-scale armies relying upon industrially produced goods

death tool far more than in any other war US fought (620,000)

heavily mechanized, grew on the capacity- especially- of the industrial north (south less)railroads becoming more expansive, have a huge impact

What are the 6 main reasons that explain poverty?

Deprivation

Exploitation

Inequality

Structural/institutional

Cultural

Human Capital

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What falls under human capital?

knowledge

skills

training

education

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What is deprivation?

suggests that someone took away or someone never had something that other people have

means deprivation of things people should have- education, shelter, income

more individual

example of a deprived area in the United States?

appalachia

what is exploitation?

systemic and more fully societal explanation much broader than deprivation

examples:

slavery

immigrant labor (vulnerable pop. with no legal protection)

under min wage jobs

What do most people say about exploitation?

“that is the way it works.”

Stats about exploitation?

85% of people live well in part bc of the low-wage workers in the bottom 15%- the system works pretty well, most of the time for most people (i.e, for those not in the 85%)

What is a remedy for exploitation?

systemic change

what is inequality?

not poverty but there is an overlap between the two

significant inequality is a gini coefficient over 0.6- this will cause discomfort for people in the top bc people will start asking “why are things like this” and might become dangerous

What does high inequality lead to?

social tensions

demonstrations and protests

fear of revolution

What is structural/institutional (systemic)?

•within society there are certain barriers that certain groups face that are difficult to overcome

•these obstacles are not of these groups’ making

•lacking education; wealthy vs. poor background, family of two vs. one parent, impoverished neighborhood/city/region, race (around which society can build barriers), discrimination, etc.

•it’s up to society to address these obstacles via legal means, raising public awareness

bottom line: it’s  not the individual’s fault

Examples of billionaires that were poor?

Howard Schultz (Starbucks)

Oprah Winfrey

George Soros (hedge funds, currencies)

Harold Simmons (in 2006 controlled 5 publicly traded companies \[NYSE\])

Shahid Kahn, owner of Flex-N-Gate, Jacksonville Jaguars and Fulham FC

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Why is culture a reason for poverty?

•poverty arises because of the individual’s own fault

•who is to blame? in this very simplistic explanation, if you are poor, it’s your own fault

•get off your duff, stay in school, apply yourself, it’s all *up to you*!

•in many cases the systemic and cultural reasons overlap

POVERTY CYCLES

What does the book When Work Disappears (1996) by William J Wilson talk about?

the effects of joblessness on urban communities

•argues that problems endemic to inner cities –from fatherless households to drugs and violent crime – stem  directly from the disappearance of blue-collar jobs in the wake of a globalized economy

How does human capital lead to poverty?

•why is it that some people do well and others do not?

•some people are able to achieve or contribute more to the productivity of society than others

•you’re poor because your productivity is low; why?

•because you don’t have the 1. knowledge, 2. skills, 3. training, 4.education

What is knowledge when it comes to human capital?

knowledge (from formal education, self-study, can be acquired   thru different ways)

what are skills (human capital?

skills (more applied, hands-on)

–knowledge vs. skills

–cabinet-maker: lots of skills

what is training? (human capital)

. training (fairly formal set of requirements)

  -- apprenticing in Germany (apprentice, journeyman, master)

  -- connotes experience

what is education (human capital)?

\-- formal (like a high school diploma, BA, MBA, etc.)

  -- all of the 4 assume preparation for the job at hand

  -- if you have all four, they (employers) will come looking for you

What is guaranteed income?

“Guaranteed income” refers to a regular cash payment accessible to certain members of a community, with no strings attached (ie, unconditional). Guaranteed income redistributes wealth to people who need it most and who’ve historically been impacted by lack of opportunities—largely people of color.

Does the US have guaranteed income?

No, but some European countries do

What are the problems with a guaranteed income?

–how high is this income?

–who pays for it?

–who is going to decide what that income is?

–what about disparities around the country (regions)

What is universal basic income?

•“a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement” 

When was guaranteed min income discussed?

during Nixon’s presidency (1969) but did not go anywhere

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What were calculations for GBI during Nixon’s presidency?

•Calculations first started at $2,400/year for a family of four

•  major debate à the NWRO (National Welfare Rights Organization – no longer exists) weighed in

–NWRO figure was $6,500

–searched for contributions to the debate in the 50 states

–Mississippi: $701

•widely different kinds of answers

•didn’t go far, but the point is the debate and the great deal of disparity and disagreement

WHO IS ACTUALLY POOR?

•both the relative an the absolute approaches have their advantages

•the *relative* is very straightforward, the only variation is the size of the family  

•the *absolute* is more difficult to establish (great variation, especially in the housing category)

relative approach to who is poor?

•median (half above, half below) household income is, say $50,000

•if that’s the case then how are we going to define poverty in that society

•chart (vertical axis, money 0 to 100%

•let’s say $25k, bottom quartile, half of the median (relative to the rest of society), or $20k, bottom quintile

•an easy way of drawing the poverty line

•what is the drawback to this relative approach?

•only within a society (cannot be cross-national)

•if one of the goals of poverty policy is to lift people out of poverty, then by definition the bottom 20% or 25% will be poor, even if their income greatly improves

Who Is Poor? \n An Absolute Approach

•how much income does a family in our society need for a minimally acceptable quantity and quality of food/+shelter/+clothing

•add the three together and add them all up

•then you can add for transportation, healthcare, education, (other) and add ‘em up; that’s our poverty line

one thing that is nice about the absolute approach?

adjustable (you can adjust for inflation, regional variations, etc.)

How Much Does It Take to Raise a Child? NOT THAT RELEVANT TO TEST

•Kirk Kerkorian’s (84) and Lisa Bonder Kerkorian (36) divorced __**in 1999**__ after a 28-day marriage

•she demanded $320,000/month to take care of their three-year old daughter, Kira

$144,000 for travel; $14,000 for parties and play dates; $7,000 for charity; $4,300 for food, plus $5,900 to eat out; $2,500 for movies, theaters and outings; $1,400 for laundry and cleaning; $1,000 for toys, videos and books; and $436 for care of Kira's bunny (no name given) and other pets

What kind of men live in poverty?

men of color

Why are more men of color in poverty?

•high incarceration rates

•low levels of education

•unmarried, non-custodial fathers

•in 2013, more than ¾ (77%) of all poor men either weren’t working at all or working part time less than year round

•just 90% of young poor men ages 18-24 and in 2013 either weren’t working at all or working less than full time year round

•more than 60% of poor families are headed by an unmarried or cohabiting couple or single parent

Major Trends Affecting Poor Urban Men: \n

\* employment rates among all working age urban men with a high school education or less have declined.

•but low work rates have increased the most among racial and ethnic minorities

What has less demand for low skilled work led to?

those who do work have seen their earnings decline as demand for low-skilled workers has fallen due to technological advances and changes in work-place organization

Major Trends Affecting Poor Urban Men:

•in 2022 2 million people in jail in the USA, prison population quintupled (500% increase) in 40 years

•Blacks are more than six times more likely to be incarcerated than whites, suggesting that rising imprisonment contributes to racial inequality.

Every state in the Union spends more to incarcerate a prisoner per year than it spends to educate a student from kindergarten through college

Researchers found that the increase in imprisonment of black men is due to?

•sentencing-policy changes for nonviolent drug offenses, not an increase in crime.

•Crime rates have been falling since the early 1990s.

•Incarceration has consequences for the individual—such as difficulty finding a job after release—his family, and his community.

Fair System vs. Government Aid \n Differing Attitudes

•business conservatives stand out for belief in fairness of the economic system

•many believe government aid to the poor does more harm than good/more good than harm

•poor have hard lives vs. poor have it easy (because, presumably, the government takes care of them)

•the government can’t afford to do more to help the needy vs. the government *should* do more 

•why are people poor? lack of effort on his/her part vs. circumstances beyond his/her control

Factors of Poverty: Systemic

1\.being socialized into a poor environment

2\.poor opportunity structures

3\.low wages

4\.under-employment

5\.discrimination

Factors of Poverty: Individual

1\.poor personal decisions made early in life

2\.“lower-class” values, attitudes, aspirations, beliefs (controversial)

3\.laziness (or lack of ambition?)

fatalism

When is the United States Census conducted?

every ten years since 1790 • one of the few specific

obligations laid down in the Constitution • responsible for producing data about the American people and the economy • allocates the seats of the US \\n House of Representatives to the states based on their population • continually conducts dozens of surveys and collects data

reasons why people keep moving to texas

growing labor market

\-increasingly diversified economy, large military presence (lots of good jobs)

Low cost of living

Affordable housing

low tax burden

6 very diff large big cities

family-friendly

fewer rules

Texans are unpretentious

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do Texans move out of Texas?

75% of adults born in Texas still live here

How do we know whether or not a state is the poorest one in the country?

•how many people live at or below the poverty line

•this is usually the way the state is identified

•non-farm family of 4 people, $24,000 nowadays (varies from year to year)

What are the poorest states in the Union?

New Mexico, Minnesota, Louisiana, DC, Arizona, Arkansas, Kentucky, Tennessee, South Carolina, West Virginia, Texas (10th)

States with the least poverty generally are?

New Hampshire and Maryland (8.3%)

* gov. employees

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