PovertyPoverty

Economics Economics

What Comes to Mind When you What Comes to Mind When you Think of Poverty?Think of Poverty?

• In one paragraph, In one paragraph, describe what you describe what you think it means to live think it means to live in “poverty.”in “poverty.”

• What would it look What would it look like, sound like, be like, sound like, be like…etc.like…etc.

• Draw a small Draw a small illustration to display illustration to display your understanding of your understanding of poverty.poverty.

The PoorThe Poor

• Census Bureau determines Census Bureau determines how many Americans live how many Americans live in povertyin poverty

• Poverty ThresholdPoverty Threshold– A poor family is one whose A poor family is one whose

total income is less than total income is less than the amount required to the amount required to satisfy the family’s satisfy the family’s minimum needsminimum needs

– The income level below The income level below which income is which income is insufficient to support a insufficient to support a family or householdfamily or household

– Varies with the size of the Varies with the size of the familyfamily

Poverty RatePoverty Rate

• See chart on p. 346See chart on p. 346• The percentage of people The percentage of people

who live in households who live in households with income below the with income below the official poverty thresholdofficial poverty threshold

• Government decides whom Government decides whom they consider to be poor, they consider to be poor, and what causes itand what causes it

• Depends onDepends on– Race/EthnicityRace/Ethnicity– Type of FamilyType of Family– AgeAge– ResidenceResidence

Causes of PovertyCauses of Poverty

• Millions of Americans are unemployedMillions of Americans are unemployed– Various reasonsVarious reasons

•Health and disability reasonsHealth and disability reasons

• Many poor adults have jobs-”working Many poor adults have jobs-”working poor”poor”– Low wages and limited work scheduleLow wages and limited work schedule

• Sometimes minimum wage is not Sometimes minimum wage is not enoughenough

Lack of EducationLack of Education

• Big mistake #1: Big mistake #1: No High School No High School DiplomaDiploma

• Graduates earn Graduates earn about 1/3 more about 1/3 more than dropoutsthan dropouts

• College Graduates College Graduates earn 3 times as earn 3 times as much as dropoutsmuch as dropouts

LocationLocation

• Most racial minorities are Most racial minorities are concentrated in the inner concentrated in the inner cities, far from the higher-cities, far from the higher-wage jobs in the suburbswage jobs in the suburbs

• Most inner city residents Most inner city residents do not own cars-rely on do not own cars-rely on public transitpublic transit

• Usually earn less than Usually earn less than people not living in the people not living in the inner cityinner city

• Similar obstacles for rural Similar obstacles for rural residentsresidents– Lack of jobs in rural areasLack of jobs in rural areas

Racial and Gender Racial and Gender DiscriminationDiscrimination

• White workers White workers generally earn more generally earn more than minority workersthan minority workers

• Women currently earn Women currently earn .83 to Men’s $1.00 in .83 to Men’s $1.00 in the workforce (2007)the workforce (2007)

• Inequality results from Inequality results from racial and gender racial and gender discrimination discrimination throughout historythroughout history

• This kind is This kind is diminishing over timediminishing over time

Economic ShiftsEconomic Shifts

• People who lack education People who lack education and skills are not very and skills are not very productive workersproductive workers– ““last hired, first fired”last hired, first fired”

• First to lose jobs when the First to lose jobs when the economy slows downeconomy slows down

• Ongoing decline of Ongoing decline of manufacturing jobs and manufacturing jobs and the rise of service and the rise of service and high-technology jobshigh-technology jobs

• Aka….High School Aka….High School Education is no longer Education is no longer enough in our changing enough in our changing economy!economy!

If Frank the Tank can make it into Post-Secondary Education, then YOU can too!

Shifts in Family StructureShifts in Family Structure

• Median household Median household income is about $45,000 income is about $45,000 a year.a year.– Meaning half live above, Meaning half live above,

half live belowhalf live below

• Divorce is one of the Divorce is one of the number one causes of number one causes of povertypoverty

• Increased number of Increased number of unmarried/single unmarried/single parentsparents

• These increased rates These increased rates lead to more povertylead to more poverty

Assignment! (To keep you out Assignment! (To keep you out of intellectual poverty of intellectual poverty ) )• People with few skills and little education are more People with few skills and little education are more

likely to be unemployed or poor. The contrary is likely to be unemployed or poor. The contrary is also true.also true.

• Research what skills and college degrees you think Research what skills and college degrees you think will be the most marketable in the next ten years.will be the most marketable in the next ten years.

• Write a newspaper article describing/discussing Write a newspaper article describing/discussing your findings.your findings.– Use a catchy headlineUse a catchy headline– Use factsUse facts– Use references (2 resources)Use references (2 resources)

• Listed at bottom of article (no wikipedia)Listed at bottom of article (no wikipedia)– ½ page typed article½ page typed article– Illustration optional but preferred Illustration optional but preferred