POVERTY & WEALTH INEQUALITY CSI – UNIT
WEALTH DISTRIBUTION Wealth = sum of assets minus liabilities Assets = Real estate, savings, investments, retirement accounts Liability = car loan, credit card balance, mortgage, student loans, etc. If we had 100 dollars, and 100 people, how much money would each person have if everyone had the same amount of wealth? Answer = $1.00 each Society is NOT this equal! The upper classes have a DISPROPORTIONATE amount of wealth
WEALTH INEQUALITY SIMULATION 20 student simulation 1 student gets half the candy (represents top 3% of population) 2 students get 1/5 candy (represents next 7%) Rest get the remaining candy (represents bottom 90%)
IMPLICATIONS OF RISING WEALTH INEQUALITY If income inequality stays high, wealth disparity will keep increasing Rich would be extremely rich Ordinary families would own next to nothing Debts almost as high as assets Suggested remedies: Policies to reduce concentration of wealth Prevent transformation of wealth into inherited fortunes (estate taxes) Encourage savings among middle class
POVERTY DEFINITION – CAUSES – EFFECTS
POVERTY Definition= state of being extremely poor Poverty line in US 1 person = $11,670 2 people = $15,730 3 people = $19,790 4 people = $23,850 5 people = $27,910 6 people = $31,970 Poverty Statistics (2013) 14.5%, down from 15% 45.3 million people Soup lines today & Great Depression
WHAT DOES POVERTY LOOK LIKE? Lack of security When will we eat? How will we pay bills? Health Impacts Malnutrition Lower life expectancy Minimum wage or unemployed Homelessness
CAUSES OF POVERTY Economy Wage Stagnation – inflation makes prices increase, but not how much you earn Layoffs & Unemployment Family Composition Single, female-headed households 4-5x greater than poverty in married/couple families High divorce rates Rising non-marital birthrates Estimated that if marriage rate was same today as in 1970, child poverty rate would fall more than 25% Government Spending Spending increases almost every year since the 1960s, yet poverty is higher now than then Healthcare costs have risen Programs= Social Security, Medicare, Unemployment Compensation
How can the poverty cycle be broken?
EFFECTS OF POVERTY Crime – higher in impoverished areas Unemployment spurs property-related crimes (burglary) Less education or time in school Distinctions based on area (think city vs. Appalachia) Increased alcohol & substance abuse Poor housing & living conditions >>> disease
CHILD POVERTY Adults become prone to violence Lose sensitivity vital to child development Physical & Mental abuse Child labor – more protections in US than in developing world Malnutrition Drug & alcohol abuse Homelessness
DECLINING, YET PROBLEMATIC Poverty rates are DECLINING, but: Household incomes are still catching up since the 2007 recession Rising wealth inequality Unemployment rates still recovering $74.7 billion spent on Supplemental Nutrition Assistance Program (Food Stamps) Wages & salaries aren’t increasing alongside growth in GDP