Introduction
The issue of Poverty in the US has always been a highly political one with each passing generation viewing the problem differently. Poverty is a social problem but it has repercussions in economics, resource planning and aspects of psychology as well. While both urban and rural areas are affected by this problem, the issue gains more traction in the urban areas. Further, poverty has implications beyond economics since it also finds equal mention in fields as diverse as Sociology and Psychology. One must understand that conceptually the problem of poverty extends beyond just hungry masses that are unable to feed themselves. It introduces systemic problems such as crime, revolts and such other ills, which requires political will to counter. Economic policies must be job oriented since a jobless growth only exacerbates the problem of poverty rather than cure it. Thus, one can view Poverty as a concept that is both widespread, miserable and lies at odds with the parameters of human development. This paper will look at the issue of Poverty in the US as well as examine the effects of the Welfare System on Poverty and, lastly, attempt to examine the future of poverty in Urban America.
Poverty – U.S Definition and Factors
As per the United States Census Bureau (2014), a family of four falls below the poverty line when it earns an annual income less than $23,834 from all income sources. In 2013, 5.8 % of married families, 30.6 % of single female families and 15.9 % of single male householder families lived in poverty. For married-couple families, both the poverty rate and the number in poverty decreased marginally, while it stagnated for the other two categories. Neither the poverty rates nor the estimates of the number of families in poverty showed any statistically significant change between 2012 and 2013 for other types of families. (USCB, 2014) The key factors playing a role in the poverty rates were Income, Race, Income Inequality, Gender and Region.
In the statistics, one sees that there are differences in the poverty levels between certain groups. For instance, single females with children are seen to be poorer than single male with children. The reason for this is that the job market is relatively more open to hiring males since it is widely perceived that a wider range of occupations have men as a better fit than women. Further, as mentioned, race also plays an important role since more black people are below the poverty line as compared to their white counterparts. From these numbers, it becomes apparent that both race and gender play a significant role in the distribution of poverty.
Literature Review of Poverty – Trends and Risks in the US
The dimensions of poverty are difficult to measure. While there are several factors that play a key role in the incidence of poverty, the four important dimensions are Gender, Race, Education and the Persistence of Poverty. One could consider the other aspects to be either secondary or tertiary to these dimensions. The first important aspect of poverty is Gender. Women are more likely to be poor than men; in 2003, the poverty rate for males was 11.7 % and for females was 13.9 %. (Hoynes, 2006, p. 49) The highest poverty rate of 40.9% was for families with unmarried heads (largely female) with children in the household. On the other hand, single member households with no children had poverty rates of about 17.9%. These statistics point to the simple fact that gender has a very strong influence of poverty. The second aspect of poverty is Race. The 2003 poverty rates among blacks and Hispanics were 24.3 % and 22.5%, respectively, which was almost three times the 8.2 % white poverty rate. (p. 49) Thirdly, education is also a critical aspect of poverty. If one considers the set of individuals living in families in which the head of the family has less than a high school education, 31.3 % fall under the poverty line, as compared to 9.6 % of those whose head has at least a high school education. (p. 49)
Of the dimensions, the persistence of poverty is the most difficult to measure since the manner in which this factor is distributed is completely different based on the analysis. (Hoynes, 2006, p. 51) For instance, if the analyst considers a “flow measure,” consisting of all individuals who have experienced a spell of poverty, or if the analyst considers a “stock measure” of all individuals who are poor at a point in time. So, therefore, a black child born into a single mother family that is poor has a statistically higher chance of remaining poor lifelong rather than a white child who is born into a similar background. (p. 51)
Having examined these dimensions, one can see that the three factors of Labor Market Opportunities, Income Inequality and Macroeconomic Cycles play a very key role in the contribution to Poverty. A 40 year study of poverty in the US by Hoynes and others (2006) clearly shows that disruption of the unemployment rate in the labor market due to uneven macroeconomic cycles had a very strong correlation to Income disparity as well as Median wage and, consequently on poverty. For instance, a bad macroeconomic phase increased unemployment, decreased wages and increased poverty. These factors have played a pivotal role in the design of poverty trends in the US. Lastly, the poverty trends in the US have also been dependant, in recent times, on Immigration. It is very clear that most unskilled or semi-skilled immigrants are poorer than their native counterparts. (Hoynes, 2006, p. 64) As per Hoynes, the main reason for this poverty is because recent immigrants are less educated and have fewer skills than natives, so a higher fraction of them are poor. (p. 64) In addition, as compared to their native counterparts, most new immigrants suffer from lack of relative deprivation as well as lack of social capital in new communities. This is especially true when such immigrants come from non-English backgrounds into neighborhoods that are predominantly English speaking.
In their work on the topic of the inherent risks of poverty, Sandoval and others (2009) devised a Life Course system to measure poverty in the US across time periods, which gave an insight into the poverty trends across time and age. While prudent policies would have reduced poverty across generations, the study indicated quite the contrary. The most remarkable aspect that this study found was that the life course risk of poverty increased across all age groups and different levels of poverty in the 1990–2000 period compared with the 1979–1989 and the 1968–1978 periods. (Sandoval, 2009, p. 726) The study also found that Americans in the 1990s and later were more prone to poverty than their ancestors. Likewise, the study confirmed the trends that this paper examined in Hoynes’ study that race and gender had a very strong correlation to poverty. The author argues that the reason for this pattern of poverty are the disruptive macroeconomic cycles, falling insurance coverage, and such other related economic factors. He cautions that this risk of an increasing number of people falling below the poverty line would only increase with time. (p. 733)
Consequences – Welfare and its Effects on Poverty
The biggest contributor to poverty, albeit in an indirect manner, is the US Welfare system. One could think of Poverty as an unintended consequence of the Welfare System. Ron Haskins (2009) writes about the several adolescent black males who drop out of the labor force, to father children outside marriage that they eventually do not support leading these generations to survive on welfare. These young boys then take up a life of crime and suffer from incarceration. (p. 58) Welfare reforms put the working mantle in the hands of black females who were forced to work as compared to black males. The biggest casualty of such an incident was the future generations who would never be able to break out of poverty. As one can see, Hoynes’ study also reveals the highest poverty rates in single mother black households with children. Therefore, in certain cases, Welfare Programs can reduce poverty in one group and increase it in another group. One can see, therefore, that Welfare has been almost always counterproductive and can bring on heightened effects of poverty.
Solutions and Conclusion
The future of poverty in the US depends largely on the political will of the lawmakers in this country. Lawmakers must understand that poverty in the US has only been increasing and traditional policy tools such as Welfare Programs have been largely counterproductive. The government must consider Poverty as a mitigating factor and must design policy in a manner so as to benefit the poor, but without resorting to Welfare Programs. Unless concrete steps are not taken in this direction, poverty is a factor that threatens to derail the progress and the achievements of the US. The government must design an immigrant program that admits only skilled to highly skilled workers into the country so that they are self supporting and do not have to resort to crime or other anti-social methods to survive. If our lawmakers fail to tackle this problem, one can imagine a bleak future with high levels of poverty, higher crime rates and living conditions that are far from satisfactory, not to mention lower levels of human development in the US compared to our European peers.
In conclusion, while the solutions to alleviating poverty are neither straightforward nor pleasant, one can revisit the macroeconomic policy that the US follows. Our literature shows that this is the single most important factor that changes people’s fortunes. Other dimensions such as Unemployment and Inequality are dependent on the macroeconomic factor. Similarly, we as a Society, should strive to remove both gender and race prejudices in education as well as awarding salaries and due recognition at the workplace. The best way to reduce poverty is to ensure a better distribution of Income across all classes of people, be they White, Black, Hispanic, Female or Male. The other important factor is the contribution of Welfare to poverty. One can understand that Welfare is a tool that must be selectively employed by the government. If this method of reducing poverty is overused it can lead to all sorts of social problems that ultimately lead to poverty.
Reference
Hoynes, H.W. et.al. (2006). Poverty in American – Trends and Explanations. Journal of Economic Perspectives. (20.1), 47 – 68.
Ron, H. (2009). What Works is Work: Welfare Reform and Poverty Reduction. Northwestern Journal of Law and Social Policy. (4.1), 30 - 60.
Sandoval, D et.al. (2009). The Increasing Risk of Poverty across the American Life Course. Demography Journal. (46.4), 717 – 737.
United States Census Bureau [USCB]. (2014, September). Income, Poverty and Health Insurance Coverage in the United States: 2013. Retrieved from http://ww.census.gov/newsroom/press-releases/2014/cb14-169.html
