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Poverty

Sociology 102

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In the world today there are about 946 billionaires (2006)and about 3 million millionaires, but there are approximately 100 million homeless people

The three richest people on earth have more financial resources than the 48 poorest countries

Americans spend about $5 billion per year on diets to lower their caloric intake but while 400 million people around the world are undernourished to the point of physical deterioration

3Figure 8.2 - Inequality of U.S. Income. Page 187

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Affluence

The Affluent1. Live longer and better2. Afford the best medical care3. Afford Best education4. most elegant possessions

For the poor, the situation is reversed

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The Rich

GDP for 2006 was about 12.98 trillion with a per capita GDP of about $43,500

Americans are worth about $72 trillion, mostly in the form of real state, corporate stock and business assets.

Surveys by the Federal Reserve Board suggest that 1 percent of all households hold over one-third of all personal wealth.

Income is even more unequal: The wealthiest 20 percent of households receive almost 50 percent of all income, while the poorest 20 percent receive less than 5 percent.

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The richest 400,000 households (about one half of 1 percent of all Americans) virtually control corporate America.

discreetly influence politicians, and other public officials to promote or defend their interests

they can obtain social preference and shape government policies.

The United States is now considered a welfare state meaning that significant portion of the GDP is taken by the state to help the poor.

Wealthfare – subsidies for the rich.

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The U.S. Social Class Ladder. Source: Henslin 2004

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Measuring Poverty

Poverty is usually defined in two ways Objective dimension-based on quantifiable

measures such as income and membership in clubs or organizations.

Subjective dimension- based on how we evaluate ourselves and others

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The Poverty Line

Official U.S. government definitions of poverty are based on the calculation of a minimum family market basket.

This line was developed in 1965, The U.S. Department of Agriculture regularly

prepare estimates of the cost of achieving a minimum level of nutrition, based on average food prices.

It is assumed that an average low-income family must not spend one third of its total income on food

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Critics argue that the measures used underestimate the extent of poverty

1. Alimony, taxes, out of pocket health-care expenses should be excluded from income figures since they cannot be used for food

2. Need to take into account regional differences in the cost of living

3. Income level is extremely low and people living above that level are still poor

* Source:Census Bureau - 2005 11

The poverty line for 2005 was $19,350 In 2005 roughly, 12.7 percent or about 38.1

million-live below the poverty line * The median yearly income of all households in

2004 was about $44,389 * For white families the number is

approximately $45,00, for African Americans the number is about $30.000; for Latinos $33,00, and for Asians, it is $57,518 *

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Income for the lowest fifth, the average is $7,348 for those in the highest fifth, the average is $91,494. This pattern has been growing more unequal over the past 25 years

The minimum wage is at its lowest real value in over 50 years and has not been raised since 1997. This is the longest stretch of federal inaction since the minimum wage was first instated in 1938

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Who are the Poor?

Single-parent families, especially female headed families in which the mother never married, have a high probability of being poor

Two out of three impoverished adults in the United States are women

Single mothers with children are now the fastest-growing segment of the poverty population

In 2004, 30.5 percent of female-headed families were below the poverty threshold, compared to 5.3 percent for families headed by married couples.

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For white single-parent families the poverty rate is 20 percent, for black and Hispanic families the numbers are 38.2 and 36.4 respectively.

U.S Census Bureau data indicate that within five years of a baby’s birth, 72 percent of white unwed mothers and 84 percent of black unwed mother are on welfare.

A Black woman is three times more likely to be poor as is a white woman

The age category at greatest risk of poverty is children, who make up 35.6 percent of the U.S. poor.

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Age wise, children under age 16 are more than 50 percent likely to be poor than the average American

changes in family structure - higher divorce rates, more children born to unmarried women, and more female-headed families explains the higher poverty rate among children.

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Contrary to popular belief, the elderly as a category have a much lower poverty rate (10.8 percent in 1996) than the general population.

Poverty rate for the elderly was almost 50 percent in the 1940s

Race and Ethnicity The majority of all poor people in the USA are

white - about two thirds. However, the percentage of whites below the

poverty line is considerably lower than it is for most minorities.

Poverty rate for white families is about 9.9 percent, for black and Hispanic families is 25 and 23 percent respectively.

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Education and Poverty

Poverty rate for those with no high school diploma, 22.3 percent, High School diploma – 9.6 percent, Bachelor’s degree or more, 3.3 percent

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Figure 6-7 (p. 200)Poverty Rates, by Education and Race or EthnicitySource: Lichter & Crowley, 2002. Copyright © 2002. Reprinted by permission of The Population Reference Bureau.

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Poverty and Geography

Rural poverty is not as visible. Unemployment rates in rural areas are far above the national average.

The majority of the rural poor are white, but a high percentage of southern blacks Native Americans, and Mexican Americans are poor as well

The highest concentration of US poverty exists in the following areas: The Appalachian mountain region, much of the Mississippi Delta, regions of the Southwest outside city limits.

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Table 6-2 (p. 201)U.S. States Ranked by Poverty Rate (continued on next slide)

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Table 6-2 (cont.)Continued from previous slide

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The Working Poor Despite common misconceptions, many just below the

official poverty level actually work for a living. A significant proportion of the poor are in two-parent

families.

The Dependent Poor A significant proportion of the dependent poor are people

who have struggled with disabilities from childhood. Approximately 1 million poor children in the US receive

Supplemental Security Income (SSI) due to disabilities.

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The Truly Disadvantaged (or The Underclass) The Underclass comprises those at bottom of the poverty

class who are excluded from the economic and cultural mainstream of society.

It is estimated that the underclass would include between 40 and 60 percent of all poor people

The severely poor are defined by the Census Bureau as person whose family incomes are less than half of the official poverty line

A substantial number of the underclass can not read or write and lack other job skills

members of the underclass have a history of multi-generation poverty

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Causes of PovertyFunctionalist Perspective Poverty ensures that society's dirty work will be

done Poverty creates jobs for all those people who

serve the poor, such as social workers, or who protect society from them, such as police and corrections officers.

Ensures that all jobs are filled.

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The Conflict Perspective

Marx viewed society as involving a constant struggle between social classes over scarce resources with some groups managing to capture more of these resources than others.

This results in the inequitable distribution of resources that makes up the stratification systems of modern societies

Once their position is acquired, they work to protect it against inroads by less fortunate groups

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employers seek the cheapest labor possible because this increases their profits.

Dominant groups convince others that the existing distribution of resources is natural or preferable to any other

The implication of this belief, of course, is that poverty is caused by one not having worked hard enough

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The Changing Structure of the American Economy Deindustrialization: As the U.S. shifts from a

manufacturing, industrial society to a service-oriented, high-tech society, many of the blue-collar jobs that required little education but paid well are disappearing or being outsourced

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The Interactionist Perspective

The interactionist perspective focuses on the importance of the subjective element of social reality - how people define themselves and their opportunities through day-to-day social interaction with others around them

Oscar Lewis argued that a segment of the population share a distinct culture of poverty

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The Interactionist Perspective

He believed that a separate subculture has developed among the poor as a reaction to economic deprivation and exclusion from the mainstream of society

Once a culture of poverty has taken hold, it is passed down from generation to generation

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Comparison of Distribution of Income and Wealth in the United States

Source: Richard T. Schaefer. 2001. Sociology, 7th ed. New York: McGraw-Hill, Figure 8-2, p. 212.From (for income) the Congressional Budget Office cited in Shapiro and Greenstein 1999 and (for wealth) from Edward N. Wolff “Recent Trends in Wealth Ownership for the Conference Volume Benefits of Mechanisms for Spreading Asset Ownership in the United States. Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

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Income 1999 Wealth 1999

Richest fifth50%

Richest fifth

84.5%

Secondfifth

10.7%

Secondfifth

10.7%

Thirdfifth4.4%

Thirdfifth15%

Fourthfifth1%

Fourthfifth10%

Poorestfifth

-0.7%

Poorestfifth4%