Poverty (cont.) Individuals classified as living in poverty have incomes that fall below the poverty threshold. Simplified poverty thresholds appear as poverty guidelines and are used to determine eligibility for federal programs. Poverty Guidelines Section 3

Reasons for Income Inequality (cont.) Reasons for varied income Education- income gap between skilled & less skilled workers Wealth – top fifth hold 75% of wealth Tax law changes – favor wealthy/higher incomes Decline of unions – unions negotiate to provide workers with benefits and higher wages Section 3

Reasons for Income Inequality (cont.) More service jobs- once high paying manufacturing jobs are no longer available. Monopoly power – professional organizations making it more difficult to enter their field Discrimination – minorities and women still face difficulty to advance in the workplace Changing family structure – more single parent families and relatives/retirees raising children Section 3

Poverty People are described as living in poverty if they live below an income level called the poverty threshold. Poverty has a number of causes, and governments have established some programs to reduce it. VS 3

Antipoverty Programs (cont.) Welfare programs designed to help the needy Income assistance – direct cash assistance to those in need. Temporary Assistance for Needy Families Supplemental Security Income General assistance – assist the poor with direct cash assistance Food stamps Medicaid Section 3

Antipoverty Programs (cont.) Social service programs – job training, day care, family planning, child welfare, etc. Tax credits Earned Income Tax Credit (EITC) Enterprise zones – businesses locate free of restrictions and taxes Workfare programs – welfare recipients work for their benefits Negative income tax – cash payments to certain groups below the poverty line Section 3

Antipoverty Programs (cont.) Economic growth by itself is not sufficient to reduce poverty. Section 3