Poverty Amid Affluence

1. Poverty Amid Affluence Chapter 6

2. The Haves and the Have-Nots • Equality of opportunity is a central value in American society, but equality of outcome is not • Most Americans believe that everyone should have the same opportunity to achieve success, but they do not object to inequality in situations between groups • Middle-class standard is the norm

3. The Rich • One measure of wealth is the value of savings and checking accounts, real estate, automobiles, stocks and bonds, and other assets minus debts • Federal Reserve Board indicates that one percent of all households hold over one-third of all personal wealth • The wealthiest 20 percent of households receive 50 percent of all income • The poorest 20 percent receive less than 5 percent of income

4. The Rich • Redistribution policies through taxation have been based on three reasons • 1.The wealthy get more out of the economic system and can afford to pay more • 2. Rich have a greater investment in the system and should pay more to maintain it • 3. Redistributing income from the rich to the poor is fair and just

5. The Rich • United States as a welfare state - a growing share of GDP is taken by the state to provide for social welfare for the poor • Reduce the impact of poverty and equalize access to basic commodities • United States as a wealthfare state - subsidies to the rich • Economic protections and benefits to the rich

6. The Rich • Are the Rich a Social Problem? • The 400 richest Americans are worth a total of more than $1 trillion • Ethics of individual success has often been an impediment to efforts to develop new policies to address the problem of poverty

7. The Poor • The condition of the poor today has become worse for a number of reasons • 1. Technology and its impact on work • 2. Opposition from the upper and middle classes to share their wealth • 3. Public attitudes toward helping the poor • A large segment of society blame the poor for their situation

8. The Poor • In 2004, 37 million Americans were classified as living below the official poverty line • 13 million of the poor were children under the age of 18 • Another 3.5 million of the poor were were over 65 years of age • Millions more were female heads of households with children who were ill or disabled

9. The Poor • Minorities have a higher poverty rate than non-minorities • A large number of the poor are the working poor • Sociologists often consider the severely poor to be those living at 50 percent of the poverty threshold. Today, a dismaying 43 percent of persons in poverty are severely poor by national standards

10. Poverty and Social Class • Social Stratification is a pattern by which individuals and groups are ranked in some hierarchy • Groups have different access to opportunities for success • Social Class - a large number of people that share the same degree of economic well-being

11. Poverty and Social Class • Marx’s concept of social class - Bourgeoisie or the rich Proletariat or working class Lumpenproletariat- the poor in society that are out of the labor force • Capitalism would lead to the continued impoverishment of the working class and the poor

12. Poverty and Social Class • Max Weber • Critical of Marx’s perspective of social class • Weber’s multidimensional approach to social class • Wealth - economic • Power - ability to influence other’s • Prestige - deference and respect

13. Poverty and Social Class • Based on Marx and Weber, sociologists have identified an objective and subjective component to social class • Objective dimension - based on quantifiable measures such as income and membership in clubs or organizations • Subjective dimension - based on how we evaluate ourselves and others

14. Poverty and Social Class • Based on subjective and objective measures of social class sociologists categorize people into • Upper-class • Upper-middle-class • Middle-class • Working-class • Poor

15. The Nature of Poverty • Poverty Line • The official poverty line by the United States government is based on a minimum market basket • Based on average food prices • Income level for poverty is based on the cost of food multiplied by four and adjusted for family size • In 2005 the official poverty line for a family of four was $19,350. By this measure, 12.7 percent of the U.S. population were below the poverty line

16. The Poverty Line • The official government measures for poverty were developed in 1965 by Mollie Orshansky, an economist at the Social Security Administration • Critics argue that the measures used underestimate the extent of poverty • 1. Alimony, taxes, out of pocket health-care expenses should be excluded from income figures since they cannot be used for food

17. The Poverty Line • 2. Need to take into account regional differences in the cost of living • 3. Income level is extremely low and people living above that level are still poor • Official measures of poverty do not take into account the relative nature of poverty

18. Who Are the Poor? • Poverty and Single-Parent Families • In 2004, 30.5 percent of female-headed families were living below the poverty line. • Much of the increase in severe poverty seems to be due to a decrease in subsidies for low-income children and their mothers. • The United States leads the affluent nations in the proportion of its children it allows to live in poverty – the U.S. “safety net” is frayed.

19. Who Are the Poor? • Poverty and Minority Groups • Whites are the largest group among poor families • African Americans and other minority groups are over-represented among the poor • 25 percent of African Americans have income below the poverty line • 23 percent of the Latino population have income below the poverty line • About 10 percent of whites have income below the poverty line

20. Who Are the Poor? • A number of factors are related to the higher rate of poverty among African Americans • Low wages • Discrimination • Educational deficits

21. Who Are the Poor? • Poverty and Geography • Many poor people live in rural areas, but large concentrations exist in large, metropolitan areas as well • Majority of rural poor are white • Large percent are Southern African Americans • One-third live in suburban areas • The public is more likely to associate poverty with urban areas

22. Who Are the Poor? • Poverty and Geography • About one-fifth of poor people live in rural areas, although rural poverty is not as visible as urban poverty • Large number of poor in the Appalachia area • Mississippi Delta • Southwest

23. Who Are the Poor? • The Dependent Poor • Individuals with disabilities • Mentally retarded

24. Who Are the Poor? • There are a number of myths associated with individuals on public assistance • 1. The vast majority of the poor are African Americans or Hispanics • 2. People are poor because they do not want to work • 3. Poor families are trapped in a cycle of poverty that few escape

25. Who Are the Poor? • There are a number of myths associated with individuals on public assistance • 4. Welfare programs for the poor are straining the federal budget • 5. The majority of the poor live in inner-city neighborhoods • 6. The poor live off government welfare • 7. Most of the poor are single mothers and their children

26. Who Are the Poor? • Event Poverty • An excellent recent example is Hurricane Katrina, which added many tens of thousands to the ranks of the poor in the United States.

27. Who Are the Poor? • Immigration and Poverty • About 25 percent of the increase in poverty since the early 1970s has come from immigrants and their children • Overall immigration has resulted in a healthier economy

28. Concomitants of Poverty • Health Care • Poor • Higher rates of infant mortality • Higher rates of mortality due to childbirth • Less access to health care and less adequate treatment • Postponement of treatment for illnesses

29. Concomitants of Poverty • Education • Poor receive fewer years of schooling • Attended overcrowded and inferior schools • Pre-schooling improves the educational opportunities of students

30. Concomitants of Poverty • Housing and Homelessness • Poor are more likely to live in overcrowded housing • Poor more likely to live in less suitable habitats • Poverty and housing segregation • Poverty and homelessness

31. Concomitants of Poverty • Justice • Poor are more likely to be • Arrested • Indicted • Convicted • Imprisoned • Poor commit crimes that are more likely to be condemned • Inadequate legal defense

32. Explanations of Persistent Poverty • Structural Explanations • Poverty in part is due to the functioning of the dominant institutions in society • Social structures change and conflict emerges between groups in their attempt to adjust • Dual labor market theory and poverty • State perpetuates poverty through its attempt to eliminate it

33. Explanations of Persistent Poverty • Cultural Explanations • From the long-term exposure of poverty emerges a “culture of poverty” • Norms • Values • Customs and behaviors • Poverty sustains itself over time as it is passed on from one generation to the next

34. Explanations of Persistent Poverty • Cultural Explanations • Critics of the “culture of poverty” thesis • William J. Wilson • Herbert J. Gans

35. Politics and Social Policy • Reform of “Welfare as We Know It” • The 1996 welfare reform bill and the end of AID to Families with Dependent Children • The emergence of Temporary Assistance to Needy Families • The poor are tied to the cycles of the economy • Social-insurance programs • Unemployment insurance • Workman’s compensation • Income-in-kind programs

36. Social Policy • Welfare Policies and Growing Inequality • Job Training Programs • Increase wages for low income worker • Earned income tax credits • Future Prospects • Move the poor to communities where there are greater opportunities