1. Poverty and Economic Inequality
Chapter 8

2. Defining Poverty Measures of poverty
Absolute – uses a fixed, predetermined amount below which people are defined as poor
Relative – uses societal standards to assess the minimum needed for a reasonable living situation, and anything less than that standard is considered poor
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

3. Which is easier to use? An Absolute or Relative measure
Values and beliefs make it difficult to agree on what is necessary and what is not, so it is easier to use an absolute measure

4. 2005 Poverty Guidelines 1 person $9,570 2 people $12,830
For each additional person, add $3,260
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

5. Poverty Statistics 37 million people were poor in 2004
That represents more than one out of every eight people (12.7%)
17.8% of children lived in poverty, more than one out of every six children
10.4% of people over 65 years of age lived in poverty
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

6. Poverty over the decades for all people
During the 1960s, 17% lived in poverty
1970s - 12%
1980s - 14%
1990s - 14%
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

7. Poverty over the decades for children
During the 1960s, 21% were in poverty
1970s - 16%
1980s - 20%
1990s - 21%
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

8. Family structure makes a difference
Married couple families have a poverty rate of 5.3%
Single female-headed households have a rate of 26.5%
Single male-headed households have a rate of 12.1%
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

9. Individuals are poorer than families
Unrelated individuals 9.6 million
Rate %
Families million
Rate %
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

10. Poverty and Race Poverty varies greatly by race in this country
White – 8.0%
African American – 24.1%
Latino %
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

11. Distribution of Household Income in 2004
Highest 20% 50.1 %
Fourth 20% 23.2 %
Third 20% 14.7 %
Second 20% 8.7 %
Lowest 20% 3.4 %
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

12. Share of Income by Households
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

13. Income changes over time
From 1993 to 1997, the top 1% of earners saw their income grow 41.4%
During the same years, the bottom 90% of earners saw their income grow 4.6%
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

14. Those top 1% earned, on average, $517,713 in 1997
The rest earned, on average, $23,815
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

15. Work and poverty
Those who worked in 2002 had a lower poverty rate, 5.9% compared to 21% for those who did not work
38% of those people in poverty worked, of whom almost a third worked full-time
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

16. Antipoverty Policies and Programs
Temporary Assistance for Needy Families (TANF)
Temporary cash public assistance
Replaced AFDC in 1996
Lifetime limit of 5 years, with no more than 2 year periods of consecutive receipt of benefits
Strict work requirements
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

17. Success of TANF?
From , number of TANF recipients dropped from a 12.3 million recipients to 5 million recipients
While many left and found work, the vast majority were in jobs that paid $7-8 per hour
2/3’s of those who left TANF and work do not have employer-sponsored health insurance
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

18. Other Cash Assistance Programs
Supplemental Security Income (SSI)
Cash assistance for low-income people 65 years and older and people with disabilities
Earned Income Tax Credit
Federal income tax credit program for families with full-time year-round workers whose incomes are low enough to qualify for a credit through the tax process
Minimum Wage
An economic policy that sets the lowest wage employers can pay, $5.15 in 2006
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

19. In-kind Benefits Food Stamps
Credit for purchase of food items
Supplemental Food Program for Women, Infants, and Children (WIC)
Food and nutrition supplements for young children
Public Housing
Reduced rent dwellings or vouchers
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education

20. Conflicting Values and Beliefs
Undeserving versus Deserving poor people
Personal failure versus system failure
Self-sufficiency versus social support
Helping those we know versus those who are strangers
Sympathy versus empathy
Social Welfare Policy and Social Programs: A Values Perspective, by Elizabeth Segal
Copyright 2007, Brooks/Cole, a division of Thomson Higher Education