1. Poverty and Economic Inequality
Chapter 6
Poverty and Economic Inequality

2. Chapter Outline
The Global Context: Poverty and Economic Inequality around the World
Sociological Theories of Poverty and Economic Inequality
Consequences of Poverty and Economic Inequality
Strategies for Action: Antipoverty Programs, Policies, and Proposals
Understanding Poverty and Economic Inequality

3. Defining and Measuring Poverty
Poverty is the lack of resources necessary for material well-being: food, water, housing, land, and health care.
Lack of resources that leads to hunger and physical deprivation is absolute poverty.
Relative poverty refers to a deficiency in material and economic resources compared with some other population.

4. International Measures of Poverty
World Bank: “poverty threshold” of $1 a day to compare poverty in the developing world.
World Health Organization: household is considered poor if it cannot meet 80% of calorie requirements using 80% of its income to buy food

5. Human Poverty Index (HPI)
Based on three measures of deprivation:
Deprivation of life.
Deprivation of knowledge.
Deprivation in living standards.

6. Poverty Thresholds: 2004 (Householder Younger Than 65)
Household Makeup
Poverty Threshold
One adult
$9,827
Two adults
$12,649
One adult, one child
$13,020
Two adults, one child
$15,205
Two adults, two children
$19,157

7. Measures of Human Poverty in Developing Countries
Longevity
Knowledge
Decent Standard of Living
Probability of not surviving to age 40
Adult illiteracy
Based on:
% without safe water
% without health services
% of children who are underweight

8. Measures of Human Poverty in Industrialized Countries
Longevity
Knowledge
Decent Standard of Living
Probability of not surviving to age 60
Adult functional illiteracy rate
% living below the poverty line, which is 50% of median income

9. Global Economic Inequality
2.8 billion people, nearly half the world’s population, survive on less than $2 a day.
More than 1.2 billion people, 1 in 5 people on this planet, survive on less than $1 a day.
Every day, 18% of the world’s population goes hungry.
In 2000 the average income of the richest 20 countries was 37 times that of the poorest 20 countries.

10. Culture of Poverty
Institutional breakdowns create a “culture of poverty” whereby the poor develop norms, values, beliefs, and self-concepts that contribute to their own plight.
Characterized by female-centered households, an emphasis on gratification in the present rather than in the future and a lack of participation in social institutions.

11. Question
The poor are poor because the American way of life doesn't give all people an equal chance.
Strongly agree
Agree somewhat
Unsure
Disagree somewhat
Strongly disagree

12. Structural-Functionalist Perspective
Poverty and economic inequality serve positive functions for society:
Low-paid, poor workers are willing to do dirty, dangerous, difficult work others refuse to do
Poverty provides work for those in “poverty industry” (e.g. welfare workers).
Poor people provide market for inferior goods.

13. Conflict Perspective
Economic inequality results from bourgeoisie exploiting proletariat.
Corporations and the wealthy buy political influence.
Free-market reform policies benefit wealthy corporations and investors, but increase poverty.
Wealthfare - Laws and policies that benefit corporations and the wealthy.

14. Symbolic Interactionist Perspective
Persons who are labeled “poor” are stigmatized as lazy; irresponsible; lacking in motivation, ability, and morals.
Wealthy persons are viewed as capable, hard working, motivated, deserving of wealth.

15. Question
According to conflict theorists, who are the exploited workers?
bourgeoisie
proletariat
underclass
nacrimas

16. Answer: B
According to conflict theorists, the proletariat are the exploited workers.

17. Economic Inequality in the U.S.
Between 1979 and 2002 average after-tax income of the top 1% of the population rose from $298,000 to $631,700—an increase of 111%.
In 1982 the average pay of a CEO was 42 times that of the average production worker.

18. Economic Inequality in the U.S.
In 2003, although the average CEO earned $155,769 per week, the average production worker took home $517 in his or her weekly paycheck.
If the federal minimum wage had grown at the same rate as CEO pay since 1990, it would have been $15.76 in 2003, instead of $5.15.

19. Question
In which of these groups did your total family income, from all sources, fall last year before taxes, that is?
$1K - 14,999
$15K to 24,999
$25K and up

20. GSS National Data Education No High School Degree High School Graduate
College Graduate
$1K to 14,999
49.5%
22.6%
13.2%
$15K to 24,999
21.1
20.7
13.3
$25K and up
29.3
56.7
73.5

21. Wealth Total assets minus debts.
Wealth includes the value of a home, investments, real estate, the value of cars, life insurance (cash value), stocks, bonds, mutual funds, trusts, checking and savings accounts, individual retirement accounts (IRAs), and valuable collectibles.
In 2001, the wealthiest 1% of households owned more than 33% of all national wealth, whereas the bottom 80% of households owned only 16%.

22. Question People who are rich don't care about those who are less rich.
Strongly agree
Agree somewhat
Unsure
Disagree somewhat
Strongly disagree

23. U.S. Poverty Rates by Age Age Poverty Rate Under 18 17.8 18 to 64 11.3
65 and older
9.8
All ages
12.7

24. U.S. Poverty Rates by Family Structure, 2004

25. % U.S. Children Living Below the Poverty Line by Family Type, 2002

26. U.S. Poverty Rates by Race and Hispanic Origin, 2004

27. Question What is the poverty status of your household? Poor Non-poor
Borderline

28. GSS National Data Race White Black Poor 9.8% 27.7% Non-Poor 87.6 67.1
Borderline
2.6
5.2

29. Educational Problems and Poverty
Children from poor families score lower on tests of cognitive skill.
Poor children often go to inferior schools.
Poor parents have fewer resources to provide educational experiences for their children.

30. Family Stress and Parenting Problems
Stresses associated with low income contribute to substance abuse, domestic violence, child abuse and neglect and divorce.
Couples with incomes under $25K are 30% more likely to divorce than couples with incomes over $50K.
Poor parents are more likely to leave children at home alone.
Poor adolescent girls are more likely to have babies as teenagers or become young single mothers.

31. Characteristics of the Homeless in U.S. Cities
41% are single men
40% are families with children
23% are mentally ill
17% are employed
10% are veterans
14% are single women
5% are unaccompanied minors
30% are substance abusers

32. Intergenerational Poverty
Problems associated with poverty (health and educational problems) create a cycle of poverty from one generation to the next.

33. Public Assistance and Welfare Programs in the United States
Many public assistance programs are means-tested, households are not eligible for benefits unless income and/or assets fall below a specified guideline.
Government assistance programs for the poor include Supplemental Security Income, Temporary Assistance to Needy Families (TANF), food programs, housing assistance, medical care, educational assistance, child care, child support enforcement, and the earned income tax credit (EITC).

34. Public Assistance and Welfare Programs in the United States
Temporary Assistance to Needy Families (TANF) Created in 1996, provides minimum monthly income to single parents and their children. 
Public housing - Program that provides federally subsidized housing owned and operated by local public housing authorities.
Earned income tax credit (EITC) - A refundable tax credit based on a working family's income and number of children.

35. Question Many poor people simply don't want to work hard.
Strongly agree
Agree somewhat
Unsure
Disagree somewhat
Strongly disagree

36. Welfare Myths and Realities
Myth: People receiving welfare are lazy.
 Realities:
Unemployed adult welfare recipients experience a barriers that prevent them from working: poor health, job scarcity, lack of transportation, lack of education, and/or the inability to pay for child care.
In /4 of adult TANF recipients were employed, earning on average $678 per month.
More than 1/4 of food stamp recipients in 2003 earned $640 per month.

37. Welfare Myths and Realities
Myth: Most welfare mothers have many children.
Reality: Mothers receiving welfare have no more children, on average, than mothers in general population.
In fiscal year 2003 the average number of individuals in TANF families was 2.5, including an average of 1.9 children. The average size of households receiving food stamps in 2003 was 2.3.

38. % of Individuals Living Below Poverty Level in Households That Receive Means-Tested Assistance: 2001
Type of Assistance
Percentage
Total
67.5
Receiving cash assistance
22.8
Receiving food stamps
33.6
One or more individuals in household covered by Medicaid
52.5
Live in public or subsidized housing
17.9

39. Living-wage Laws
Require state or municipal contractors, recipients of public subsidies or tax breaks, or, in some cases, all businesses to pay employees wages significantly above minimum wage, enabling families to live above poverty line.

40. Millennium Development Goals
An international agenda for reducing poverty and improving lives.
The target date for achieving most of the MDGs is 2015, with 1990 as the benchmark.
Although China and India have made significant progress toward achieving the MDG of reducing poverty, in sub-Saharan Africa poverty rose between 1990 and 2001.

41. List of Millennium Development Goals
Eradicate extreme poverty and hunger.
Achieve universal primary education.
Promote gender equality and empower women.
Reduce child mortality.
Improve maternal health.
Combat HIV/AIDS, malaria, and other diseases.
Ensure environmental sustainability.
Develop a global partnership for development.

42. Quick Quiz

43. 1. The major cause of homelessness is:
mental illness among the homeless.
substance abuse among the homeless.
unemployment.
lack of affordable housing.

44. Answer: D
The major cause of homelessness is alack of affordable housing.

45. 2. Government programs that have eligibility requirements based on income are called what?
merit-based programs
requirement oriented programs
means-tested programs
none of these choices

46. Answer: C
Government programs that have eligibility requirements based on income are called means-tested programs.

47. 3. Children are more likely than adults to live in poverty.
True
False

48. Answer: A. True
Children are more likely than adults to live in poverty.

49. 4. Gene's corporation is failing yet he receives low interest government loans, tax reductions, and lower fines when it breaks federal regulations. Gene's corporation is not unique, in fact it is one of many who receive what conflict theorists call:
hegemony.
wealthfare.
welfare.
interest giving.

50. Answer: B
Gene's corporation is not unique, in fact it is one of many who receive what conflict theorists call wealthfare.