Free Critical Thinking On Poverty And Unemployment

The title of the article that I had chosen is “U.S. Poverty: Census Finds 46.2 Million Impoverished As Median Income Drops” found in the Huffington Post website (September 12, 2012). The persistence of poverty and unemployment in the United States were the issues being addressed in the current event.
The report of the Census Bureau about the poverty in the US was the focus of the article. It was cited that 46.2 million of the country’s population is impoverished, that is, 46.2 million people in the US is living under poverty as indicated by a drop in the median income of households. The number is considered to be the highest recorded number of US citizens living below the poverty line in more than half a century. Also, the poverty rate of 15% is the highest rate since 1983 and remained unchanged since 1993. Top on the list of states with the highest share of poor people is New Mexico (22.2%) and New Hampshire with the lowest share (7.6%). The update on the well-being of people in the US is found to be a bit puzzling by some economists because of no improvement in the poverty level despite the 1% drop in the unemployment in 2011 and the increasing unemployment benefits given by the federal government. The median income of households were reported to decline by 1.5% in 2011 making the rank of the country’s poor to remain stuck at its record level; that is, the general poverty rate is at 15% which is statistically unchanged from the 2010 rate of 15.1%. The drop in median income was said to even widen the gap between the rich and poor. Moreover, the report also have partly mentioned about the economy’s unemployment which is said to decline from 9.6% in 2010 to 8.9% in 2011. It was mentioned in the report that the reduction in the unemployment rate was a result of the workers decisions to leave the work force because they are discouraged, go back in schooling, and other reasons.
The economic concepts used in the article are: poverty and unemployment. Also, the notion of income was used in part to explain the level of poverty which is gauge using the median income of household in the economy.
Poverty, as I understood this concept, is a condition when people do not have adequate income to leave at the subsistence level. The so-called poverty line draws the boundary between poor and non-poor and it is the income level for each family size set by the federal government that falls below the estimated cost of living at the subsistence level. In addition, the concept of poverty rate pertains to the percentage of population whose family income falls below the poverty line. The federal government monitors the level of poverty of the country because such level captures the well-being of the people that it governs. Also, it is a gauge of the effectiveness of the government’s policies in terms of boosting the economy and uplifting the people’s standard of living.
Poverty is also a window for us to look into the disparity of income between the non-poor and poor citizens in the country. The increasing number of US citizens living under poverty is an indication that the income distribution is becoming irregular, that is, distribution of high income becomes thinner and the composition at the base of the income pyramid becomes thicker. The situations of increasing income disparity and rising poverty level call for a more active government intervention aimed at minimizing the income gap and lowering poverty level. As I see it, if the government will not be effective in its policy implementation on poverty reduction in the succeeding periods, the government will soon found itself subsidizing almost all the people in the economy, which is not a good idea. At present, the federal government providing sufficient assistance that aims to uplift the living standard of its citizens.
Moreover, unemployment has been a consistent concern of the Federal government. In fact, the government has been using all its fiscal and monetary tools to lower unemployment. Inducements have been implemented to encourage both the private and public sectors to spend, thereby creating jobs in the economy.
In conclusion, the article by The Huffington Post entitled “U.S. Poverty: Census Finds 46.2 Million Impoverished As Median Income Drops” should give an insight to the policy makers of the federal government on how should they design policies in a way that will not only be aimed at increasing the economy’s growth but also of improving the living standard of the people. Improvement in the standard of living entails less and less number of people living below subsistence.