Poverty Chapter 15 Lecture PowerPoint © W. W. Norton & Company, 2008

Poverty

Chapter 15

Lecture PowerPoint

© W. W. Norton & Company, 2008

What is poverty?

You May Ask YourselfCopyright © 2008 W.W. Norton & Company, Inc.

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Poverty = a condition of deprivation due to economic circumstances that are severe enough that the individual cannot live with dignity in his or her society.

Relative poverty = based on economic condition of society or area – median income What is poor in the US would not be poor in Bangladesh

Absolute poverty = household income falls below the necessary level to purchase food to physically sustain its members.

What is poverty?


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Poverty line (poverty threshold) - estimated food cost per household size, multiplied by 3. Household with income below this line is considered “poor.”

Poverty guidelines = simplification of threshold for statistical use (see next slide)

Severe poverty = income less than ½ of federal poverty line Many criticisms

Choice of multiplier – is 3 too much? Based on food – should it be housing? Something else? Does not take account of wealth or assets

2009 Poverty GuidelinesPersons in family Poverty guideline

1 $10,830

2 14,570

3 18,310

4 22,050

5 25,790

6 29,530

7 33,270

8 37,010

% of population in poverty, 2007

Cost of Living, 2007- little relationship with poverty rates (compare to previous slide)

Figure 15.1 | Number in Poverty versus Poverty Rate

How does poverty affect children?


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material deprivations – poor nutrition, lack of medical & dental care, exposure to lead & other toxins, unsafe neighborhood, few early educational experiences

parenting stress – low income, unemployment, little social support, poor preparation for parenting. May result in fewer positive interactions between parent and child, sometimes leads to abuse.

“No effect” (spurious cause) – whatever causes bad parenting also causes poverty. Other factors (e.g., low IQ, lack of education, drug addiction) lead to both. More conservative view, less hope for intervention

How does poverty affect children?


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Susan Mayer (What Money Can’t Buy) Giving more money to poor does not guarantee it will be

spent on improving their children’s lives Good parenting is not dependent on income Rich families expose children to more possibilities,

expectations, aspirations. Consistent with others’ notion of “limited world” of poor

children.

The Culture of Poverty


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poor people adopt different behaviors for survival Illegal work Multigeneration households Trading and swapping goods & services

Poor people have different values Immediate gratification Lack motivation to work

May perpetuate cycle of poverty, passed on to kids Culturally biased theory, often used by welfare critics

Welfare and “culture of poverty” myths Welfare takes away motivation to work Welfare enables men to escape responsibility

for supporting families Welfare enables women to have more

children than they can support Welfare creates dependency; once on it,

people stay on it. All are myths.

Welfare and culture of poverty


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Perverse incentives are reward structures that lead to suboptimal outcomes by stimulating counterproductive behavior. welfare makes marriage and work less attractive wages may be subtracted from welfare benefits, making work

cost money. Unintended consequences are results of a policy that

were not fully anticipated. Welfare “reform” has increased poverty Fewer people are on welfare but most of those who get off are

still poor.

Welfare in 20th century U.S.


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Established after Great Depression – Aid to Dependent Children (later AFDC)

Concept of “entitlement” – some dependents are entitled to support from society

1960’s: Lyndon Johnson’s “War on Poverty.” 1980’s: Republicans questioned “entitlements”

concept; redefined “income” to make poverty appear lower and reduce welfare benefits.

1996: Welfare reform ended entitlements

Welfare Reform, 1996 PRWORA – “Personal Responsibility and Work

Opportunity Reconciliation Act” AFDC became TANF – “Temporary Assistance to

Needy Families” Shifted responsibility to welfare recipient Limited time on welfare Required training and work

Structural Causes of Poverty


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William Julius Wilson: Poverty is structural, not cultural deindustrialization, globalization, suburbanization,

discrimination make it difficult to transition to work. Many jobs do not pay living wage or provide benefits

Federal minimum wage increases to $7.25 in 2009 About $15,000 per year if working 40 hrs per week Below poverty line for household of 3 or more

Lack of jobs results in shortage of eligible men to marry.

Structural causes of poverty


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Studies of Gautreaux Assisted Living Program in Chicago and Moving to Opportunity (MTO) in various cities

Attempted to see how moving families from high to low-poverty areas might affect parental employment, children’s outcomes, and other factors. living in less stressful environment had positive effects

on children. Little difference in welfare, employment, or earnings Suggested that reducing residential segregation might

be beneficial for children, but may not increase economic opportunities directly

Figure 15.3 | Absolute Poverty Rate (percentage of the population)

Why Is the United States So Different?


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US is most unequal developed nation in the world. Some European countries transitioned to capitalism

later; political institutions were better able to protect the weak.

US has more separation of powers; this makes it difficult to coordinate social programs

European feudalism may have developed into more “paternalistic” culture – modern welfare state

Racialization is more evident in the US; poverty and race are closely connected

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Poverty Chapter 15 Lecture PowerPoint © W. W. Norton & Company, 2008