October 14, 2010

Trendspotting: Poverty

KS_2010a By Karen Sternheimer

You might have heard that the poverty rate went up in 2009, from 13.2 percent of Americans to 14.3 percent.

What does that mean? According to the U.S. Census Bureau, living in poverty in 2009 meant earning $10,830 for a single person, $14,570 for a two-person household, and $18,310 for a three-person household (the threshold rises by $3,740 for each person in the household; the rates are slightly higher for those living in Alaska and Hawaii).

The government calculates the poverty rate based on a measure some consider outdated: triple the estimated cost of food. When the measure was first constructed, a family’s food budget comprised about one-third of basic expenditures. But today, with the costs of housing and health care relatively higher and the abundance of cheap food, critics argue the measure is limited.

In any case, we can compare changes poverty rates over time by using a stable (although flawed) measure. It’s not a surprise that poverty rates would rise during a time when unemployment rates remain high. As you can see from the graph below, the number of people living in poverty tends to rise during recessions (the shaded bars).

Although poverty rates today are a bit lower than they were in the early 1980s and much lower than before 1964 (when President Johnson launched the “War on Poverty”), poverty rates are at a fifteen-year high, and they are likely to continue to rise as unemployment remains near ten percent.

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Poverty’s effects are not distributed evenly. In 2009, the poverty rate for female-headed households was nearly 30 percent, compared with just under 6 percent for married couples and 17 percent for male-headed households.

Children are the age group most likely to live in poverty: 20.7 percent of those under eighteen lived below the poverty line, compared with about 13 percent of adults eighteen to 65, and just under nine percent of those over 65. Thanks largely to Social Security and Medicare, elder poverty has become much rarer. In 1960, before Medicare, the poverty rate for those over 65 was 35 percent. A big part of the reduction in the overall poverty rate is likely the result in reduced levels of poverty for the elderly.

You might be surprised to learn that many people living below the poverty line have jobs. In 2009, nearly three percent of full-time workers lived in poverty. Many people who work part-time would like full-time jobs but are having trouble finding them in this rough job market. Of those working part-time, 14.5 percent lived below the poverty line in 2009.

Those in the south are more likely to live in poverty than those in other regions: 15.7 percent compared with 14.8 percent in the west, 13.3 percent in the Midwest, and 12.2 percent in the Northeast.

There are also major differences based on race. While whites comprise the largest impoverished group, other racial ethnic groups are disproportionately likely to be poor, as you can see from the table below:

poverty table

Source: U.S. Census Bureau, Table 4, People and Families in Poverty by Selected Characteristics: 2008-2009

This means that 9.4 percent of all whites, for instance, live below the federal poverty line, and that blacks and Hispanics are more than two and a half times more likely to live in poverty compared with whites. According to a joint study between the Federal Reserve and the Brookings Institution, in 2000, more than a third of blacks and Hispanics lived in areas of concentrated poverty, compared with about six percent of whites.

Beyond higher poverty rates, these groups are more likely to live in areas where more than forty percent of their neighbors are also in poverty. According to Rachel Bogardus Drew, a research analyst at the Joint Center for Housing Studies of Harvard University:

Beyond the abandonment and disinvestment that follow, concentrated poverty isolates residents from services and opportunities that are available in the rest of the metro area, including retail and food options, adequate transportation, as well as jobs and financial services.

Being a resident in a poor neighborhood can make it more difficult to improve one’s circumstances because of the mismatch between where people live and where jobs are available. Center city residents need either a car or reliable public transportation to access the new jobs being created in the suburbs and on the urban fringe. But low incomes often preclude auto ownership, and disinvestment in the neighborhood certainly does not encourage improving or expanding public transportation. Furthermore, being a resident of a poor neighborhood can hinder some from finding jobs because of an employer’s negative perception of the neighborhood.

While the number of Americans living in areas of high concentrated poverty declined between 1990 and 2000 after decades of sharp increases, a 2008 Brookings Institution report concluded that concentrated poverty rose between 2000 and 2005.

Poverty impacts more than the individuals who struggle to manage in their day-to-day lives. Poverty reflects and reinforces other forms of inequality, and it also has broad implications for communities. While it is common to think of poverty through the lens of individual effort or failure, the economic downturn serves as a reminder that poverty is tied into our social structure. It’s not just a personal problem.

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Comments

Poverty is prevalent in America today and has gone up nationally 1.1 % since 2009. Blacks and Hispanics have a disproportionate rate both being over 25 %. Asian is 12.5 % and White 9.4 %. Almost 30% of single mothers are at poverty level and single male parent are over 17% whereas just under 6% of married couples with children are at poverty level. Over 20% of all children are at poverty level. These rates are always higher when there is a recession. The only good numbers are that far less elderly people are at poverty level since the initiation of Medicare-just under 9% but that is less than in 1960 when35% of them were at poverty level. This is still too many and we need to improve the economy and lessen poverty at all ages and ethnic backgrounds.

After reading the blog posted about this topic, I realize that in order to even talk about this subject that polls and questionaires must be given. The Blogger uses many charts and graphs to help create a visual image of her research. The only way that she could of gotten these visuals and answers, if not done herself, was to take a survey. The survey must of been passed out to a representative sample of the population in order to get the best answer and to see how the variable,people living in poverty, has changed. This process creates the most probable answers.

After I read this blog I understood what was actually happening outside of my community. My community is very lucky to not have many people below the poverty line. And I also believe that it isn't fully the peoples fault. The economy plays a huge part if you are in poverty or not. One year you can be above poverty and have a great job, and then you could get fired or get laid off. And then the next year you go below poverty.

After i read this, i thought about how many people in my school are below the poverty line. So they tend to lose their homes and that affects their family's life. The economy has made this increase, because many people lost their jobs, because their company got shut down or move out of the country.

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