Chapter 2: Poverty

Chapter 2: Poverty

2.1 The Measurement and Extent of Poverty

Learning Objectives

  • Understand how official poverty in the United States is measured.

  • Describe problems in the measurement of official poverty.

  • Describe the extent of official poverty.

Introduction to Poverty Measurement

  • In the early 1960s, US officials aimed to measure poverty accurately.

  • Mollie Orshanky calculated the poverty line in 1963, taking the cost of a minimal diet and multiplying it by three, based on the finding that the average American family spends one-third of its income on food.

  • A family with income below three times this minimal diet cost is considered officially poor. This calculation has not changed since 1963.

Limitations of the Poverty Measure

  • Evolving Costs: Living costs have risen, including heat, electricity, childcare, and medical expenses, which are not factored into the outdated poverty line.

  • Noncash Income: The measure ignores noncash income like food stamps and tax credits.

  • Regional Variations: The poverty line does not account for regional differences in living costs. Some experts have criticized the official poverty measure, observing:

“The official measure no longer corresponds to reality… No one really trusts the data” (DeParle et al., 2011).

Statistical Overview of Poverty

  • According to the US Census Bureau:

    • In 2010, the official poverty rate was 15.1%, translating to 46.2 million Americans in poverty.

    • While the poverty rate declined throughout the early 1990s, it was higher than in 2000 and the late 1960s.

  • Episodic Poverty: Defined as being poor for at least two consecutive months, almost a third of the US population experienced it from 2004 to 2007, although only 2.2% were poor for all three years.

  • Supplemental Poverty Measure: This newer measurement from the Census Bureau accounts for many additional family expenses and reports a poverty rate of 16.0%, or 49.1 million Americans, revealing the limitations of the traditional measure.

  • Twice Poverty Data: Many analysts argue that income should be double the federal poverty rate to truly meet basic needs. Using this measure, about one-third of Americans live in or near poverty.

Key Takeaways

  • The official poverty rate underestimates the true extent of poverty today.

  • The poverty rate in 2010 was 15.1% (46 million Americans).

  • Roughly 100 million Americans live at or below twice the poverty line.

2.2 Who the Poor Are: Social Patterns of Poverty

Learning Objectives

  • Describe racial/ethnic differences in the poverty rate.

  • Discuss how family structure relates to poverty.

  • Explain what labor force participation data imply about the motivation of poor people to work.

Demographics of Poverty

  • Racial Composition: Public perception often links poverty with racial minorities, particularly African Americans. However, the majority of poor Americans are actually non-Latino white (42.4%), followed by Latinos (28.7%) and Blacks (23.1%).

  • Statistical Breakdown: Although only 9.9% of non-Latino whites are poor, 27.4% of Black Americans and 26.6% of Latinos live in poverty, indicating that impoverished individuals from minority races face systemic disadvantages.

Gender Poverty Discrepancies

  • Women experience higher poverty rates than men, with 16.2% of females compared to 14.0% of males living in poverty, totaling 25.2 million women compared to 21 million men.

  • The phenomenon termed