Confronting Poverty: Detailed Study Notes
Confronting Poverty: Economic Hardship in the United States
Overview and Author Information
Author: Mark Robert Rank
Publication Date: 2023
Publisher: Sage Academic Books
DOI: https://doi.org/10.4135/9781544358895
Keywords: poverty, income
Disciplines: Social Stratification & Class (general), Social Stratification & Class, Poverty & Homelessness, Sociology
Access Date: October 5, 2025
City: Thousand Oaks
Online ISBN: 9781544358895
Defining Poverty
Initial Conceptualization:
Often associated with hardship, struggle, lack of financial resources, overdue bills, and deteriorating neighborhoods.
Historical Perspectives:
Conceptualizations of poverty vary through time:
Ancient societies defined the poor as beggars, the sick, or the widowed.
Medieval period associated poverty with the peasant class, which represented most of society.
Adam Smith's Definition (The Wealth of Nations, 1776):
Poverty as the lack of necessities deemed essential by societal customs for "creditable people".
This is known as an absolute measure of poverty, where individuals below a defined threshold are classified as poor.
Challenges arise in determining what constitutes necessities (e.g., food, clothing, shelter, technology, healthcare).
Contemporary Definitions
Webster's Definition:
1. State of having little or no money or means of support.
2. Deficiency of necessary or desirable ingredients, qualities, etc.
3. Scantiness; insufficiency.
World Bank Definition (2018):
A person is poor if their income falls below the minimum level necessary to meet basic needs.
Social Exclusion Perspective:
Poverty can signify deprivation from social participation. Amartya Sen's Definition (1992):
Poverty as a lack of capabilities and individual freedom, excluding individuals from certain fundamental rights (e.g., voting), thus leading to stigma and discrimination.
United Nations Perspective (2019):
High-income nations denote poverty not only by income deficiency but also by chronic unemployment, lower life expectancy, and high illiteracy rates.
Commonality Across Definitions:
All definitions emphasize the absence of basic necessities required for a minimally adequate life.
Measuring Poverty
Historical Context:
President Lyndon Johnson declared a War on Poverty in 1964, revealing a lack of official poverty statistics.
Measurement Distinctions (Iceland 2005, 2013):
Absolute vs. Relative Measures:
Absolute Measure: Defines poverty as failing to secure a specific amount of income necessary for basic life needs (e.g., food, shelter).
Absolute poverty threshold calculated from costs of basic living items annually.
Relative Measure: Compares household income against the income of the rest of the population.
Example: Poverty defined as falling below 50% of median income, thus aiding international comparisons.
Concept of Relative Deprivation: Individuals may be deemed poor due to their place in the income distribution rather than by a set income amount.
Pretransfer vs. Posttransfer Measures:
Pretransfer Measure: Considers only a household's annual income without including government benefits.
Posttransfer Measure: Includes personal earnings and any government cash or in-kind benefits, offering a reflection of government program impacts on poverty statistics.
Income vs. Asset-Based Measures:
Traditional focus on income for measuring poverty.
Asset-Based Measure: Evaluates if a household possesses sufficient liquid assets available to sustain them through periods without income, often defined as having enough to stay above the poverty line for three months.
Construction of the Official Poverty Measure
Historical Measurement Development:
Mollie Orshansky in the 1960s devised the federal poverty measure consistent with Smith’s absolute definition.
The approach involved calculating the estimated cost of a minimally adequate diet and applying a multiplier based on historical spending patterns on food.
Example Calculation:
2019 poverty line for a family of three was set at:
Basic dietary costs: $6,778
Multiplied by three for total poverty threshold: 6,778 imes 3 = 20,335
Adjustment and Data Inclusions:
Annual poverty levels adjusted for inflation.
Household income considered for poverty measurement excludes certain benefits: includes government cash (e.g., Social Security) but not Medicaid or tax credits.
Variances by Household Size:
Differential poverty levels accounts for varying household sizes (e.g., 2019 thresholds ranged from 13,011 for one-person households to 52,875 for households of nine or more).
Poverty Statistics (2019)
Table of Poverty Levels:
Level of Poverty
Percent (%)
Number (in millions)
Official Poverty Measure
10.5%
34.0
Near Poverty
18.1%
58.3
Extreme Poverty
4.7%
12.7
Supplemental Poverty Measure (U.S. Census Bureau 2020b):
Provides an alternative measure adjusting for living costs and accounting for additional noncash benefits.
Findings: 11.7% in poverty, 25.7% in poverty or near poverty, with 3.9% experiencing extreme poverty, showing differences in child poverty rates.
Implications of Living Below the Poverty Line
Example and Implications:
For a three-person household in 2019 under the poverty line ($20,335), average income approximated:
1,695 monthly, with allocation example demonstrating limited daily meal budgets, indicating severe financial constraints.
Contrast with required living wage is striking, e.g., MIT Living Wage Calculator suggests needed income levels dramatically exceed the poverty threshold.
Public Perception vs. Poverty Line:
In 2013, the Gallup Poll indicated people believed a family of four needed 58,000 to get by, illustrating the disconnect between recognized poverty and perceived minimum needs.
Trends and Changes in Poverty Over Time
Historical Poverty Rates Analysis:
Poverty measured back-dated to 1959; observed significant peaks and declines (e.g., 22.4% in 1959, 11.1% in 1973).
Structural patterns: generally rising and falling with economic conditions, such as recession impacts on poverty rates.
Demographic Vulnerabilities:
Reduction in elderly poverty from 35.2% in 1959 to 9.4% in 2019 reflected successful targeting of this demographic.
Children (14.4% in 2019) have not benefited similarly, showcasing ongoing risks.
Conclusion
Measurement and definition of poverty is inherently complex—varied approaches can politicize perspectives on poverty.
Importance of clarity in defining terms used in discussions and studies of poverty.
Implication of varying definitions on poverty depiction & addressing issues in social policies.
Addressing poverty is both an academic and significant real-world challenge, affecting individuals’ lives, economic policy, and societal perspectives.