1. Social Problems: A Down-to-Earth Guide, 11e James M. Henslin
Chapter 7
Economic Problems:
Poverty and Wealth

2. Learning Objectives
7.1 Summarize the major economic problems facing the United States, the three types of poverty, and the problems with the poverty line. 7.2 Explain how subjective concerns have changed the social problem of poverty over time, structural inequality, the basic distribution of income and wealth in the United States, and the impact of poverty. 7.3 Summarize the different pictures that emerge when you apply symbolic interactionism, functionalism, and conflict theory to the social problem of poverty. 7.4 Summarize research findings on who the poor are, a culture of poverty, who rules the United States, and explanations of global poverty. 7.5 Explain how shifting views have influenced social policy, what progressive taxation is, and what social programs to relieve poverty are being implemented or considered. 7.6 Explain what the likely future of the social problem of poverty is and why.

3. 7.1 – The Problem in Sociological Perspective
Economic Problems Facing the United States
The Nature of Poverty
Summarize the major economic problems facing the United States, the three types of poverty, and the problems with the poverty line.
Terms:
Social inequality—the unequal distribution of wealth, income, power, and opportunities
The term social class refers to a large group of people who have similar income, education, and job prestige.

4. Economic Problems Facing the United States
Booms and Busts
Economic storms of change
Stagnant Incomes
Our dollars buy less
A Debtor Nation
$16 trillion in national debt
Because your welfare is tied up with the U.S. economy, this chapter should help you better understand your future. Look at three economic problems facing the United States:
The economy is the social institution that produces and distributes goods and services.
At any given time, the U.S. economy is moving through a “boom–bust” cycle.
During a “boom,” there are plenty of jobs, and the future looks bright and rosy.
During a “bust,” the jobs dry up, and the future seems dark and gloomy.
Another problem is that people’s real income (income adjusted for inflation) is now stagnant. After World War II until 1970, the real income of U.S. workers rose steadily. Even after inflation, workers still had more money to spend.
Today paychecks have grown, but the dollars they contain buy less
The U.S. used to have a huge surplus. Today, we buy from nations at such a fast pace, that when we add up what we earn we find ourselves $500 billion behind.
We also spend more on government services than we collect in tax dollars.
Our debt earns interest to the tune of $450 billion/year. A lot of money that can’t be used elsewhere

5. Watch our money disappear.

6. The Nature of Poverty Types of Poverty Problems with the poverty line
Biological
Relative
Official
Poverty Line
Problems with the poverty line
Types of poverty:
biological poverty, which refers to malnutrition and starvation. It also refers to housing and clothing so inadequate that people suffer from exposure. Our homeless endure biological poverty.
relative poverty. This term refers to comparing people’s standard of living and concluding that some are worse or better off than others.
official poverty, an income level that makes someone eligible for welfare benefits.
Poverty line are the official government guidelines. (low-level food budget times 3)
The official poverty line has problems.
Critics point out that food preferences and cooking patterns have changed since the 1960s, but not the government’s definition of poverty.
They say that poor people actually spend only about 20 percent of their incomes on food, so to determine a poverty line we should multiply their food budget by 5 instead of 3
except for Alaska and Hawaii, the poverty line is not adjusted for different costs of living.
Finally, the poverty line does not distinguish between urban and rural families

7. What a world of difference for the rich and the poor around the globe: current life circumstances, hopes for the future, and life orientations. The one is hoping for a new diamond, the other for food. The debutante on the left lives in the United States. The ragpicker on the right lives in India.

8. 7.2 – The Scope of the Problem
Subjective Concerns and Objective Conditions
The Situation Today
Social Inequality
Distribution of Income and Wealth
The Impact of Poverty
Explain how subjective concerns have changed the social problem of poverty over time, structural inequality, the basic distribution of income and wealth in the United States, and the impact of poverty.

9. Subjective Concerns and Objective Conditions
Changes in Concerns and Conditions
Industrialization
Launching the War on Poverty
Kennedy, 1962
Objectives conditions alone do not make poverty a social problem. The subjective concerns must be high enough that the public wants to do something about poverty.
During the early years of the United States, most people were poor (objective condition). Life had always been a struggle for almost everyone in the world, so poverty was assumed to be a natural part of life (subjective concern).
With industrialization people left rural areas for cities. The overall standard of living was increasing, but people felt (subjective concern) that poverty was a problem.
Eventually, poverty concerns receded.
Then the Great Depression hit and poverty was a problem
Then WWII led to poverty decreasing again.
As you can see, poverty as a subjective concern changes over time
President Kennedy launched the war on poverty in 1962.
President Johnson continued the war.
The government began programs for the poor: child care, Head Start, legal services, medical services, job training, subsidized housing, and community health centers.
As a result, the number of people in poverty dropped.

10. With programs from Kennedy and Johnson poverty decreased in the 1960s.
It is clear that poverty can be diminished, we just need effective policy.

11. The Situation Today 21st century concerns of poverty receded
2008 brought some outcry
Reaching a Plateau
No reduction since the 1960s
Arbitrary and Controversial Numbers
The Significance of Poverty
At the beginning of the twenty-first century, as the war on terrorism and global economic threats drew our attention, subjective concerns about poverty receded.
The economic crisis that began to unfold in 2008 brought sporadic outcries about poverty, but the concerns focused on job layoffs and home foreclosures.
From Figure 7.2 (previous slide) you can see that we have made no progress in reducing poverty since the 1960s and 1970s.
During the past 40 years, the percentage of Americans below the poverty line has hovered between 12 and 15 percent. Today it is at that upper range, threatening to burst higher.
Because the poverty line is a definition chosen by a government agency, we can argue endlessly about whether we have more or less poor people than the government measures.
Some say it is higher, that a lot of people who are on the edge of survival aren’t counted.
Others point out that the government does not count as income many benefits that people receive from antipoverty programs: Medicare, Medicaid, food stamps, and HUD vouchers (government rent subsidies given to poor families).
Despite the disagreement over numbers, poverty is a fact of life for millions of Americans.
Where the poverty line is drawn has real consequences for people.
The definition we use determines who will receive aid and who will not.
Poverty is the root of many social problems.

12. What should be part of the poverty line?
This cartoon pinpoints the arbitrary nature of the poverty line. This makes me almost think that the creators of the Wizard of Id have been studying sociology.

13. Social Inequality Ideals Versus Reality Structural Inequality
Equality, opportunity, and success
Deny or not, programs exist to produce equal opportunity
Structural Inequality
Inequality built into social institutions
Poverty contradicts American values.
So most people deny poverty.
When asked what social class they belong to, most (rich or poor) reply “middle-class”
This fascinates researchers because inequality does exist.
The rich are connected and have power. The poor have little.
So, we (our society) have programs to make life a little more equal
affirmative action, college scholarships, Pell grants, and community colleges
Structural inequality can’t be changed with social programs. The social structure needs to be changes.
Examples:
Some jobs in our economy pay higher wages and others lower wages, so automatically some people will receive more, others less.
Or consider unemployment, another form of structural inequality. If a society has 100 million workers but only 90 million jobs, then 10 million workers will be unemployed, regardless of how hard they look for work.
Job training programs cannot solve this structural problem.
Short Assignments
Many students undoubtedly believe that many people exploit the welfare system by living in ease off government assistance. One way to bring some clarity into this mindset is to have students confront the welfare bureaucracy directly. Have them find out whether they are eligible for public assistance, what kind, how much they would receive, and what they would have to do to get it. Have the students report their experiences to the class. Another example would be to connect this to the financial aid application or system at their campus. Are they able to get help? Do they have to make an appointment? Do they have trouble with the forms and its definitions? How are they treated by the staff? Are there any labels attached to or different treatments for a person on welfare or needing financial aid? (L.O.7.5)
Discussion Questions
Ask students to discuss the advantages and disadvantages they would have living in a capitalist society as compared to living in a socialist system. Have them think about the type of jobs they might have, the home they may live in, the health care they might receive, and their overall quality of life if they were wealthy compared to being poor under each system. A short introduction to socialized medicine could be a great way to do comparative access to health with for-profit examples of US health care. (L.O.7.4)
MyLab Activity
Explorer. Poverty: The Role of Poverty—Should This be Next Door to Greatness: Poverty in Cambridge, MA After studying some of these slides, students can answer these questions: a. Slide 4’s map indicates differences in median income. Where did you find the richest people living (darkest color)? (Answer: Suffolk County near the water, $108,060)
b. Since this chapter deals with inequalities, how does Harvard as an institution also reveal similar inequalities within the campus staff? Explain. c. Did educational level impact the respondents in the survey on Slide 8? If so, how did education impact their views about improving the standard of living near Cambridge? d. How are these slides explaining structural inequalities in opinions? (L.O.7.2)

14. The more wealth you have the greater access to health care, education, and other opportunities you have.
Poverty is much more than having little money. Poverty means the reduction in life chances.

15. Distribution of Income and Wealth
Inequality of Income
Flow of money is not equal
Inequality of Wealth
Americans own $60 trillion worth
Wealth and Power
Income is the money earned from working or investments.
The top 5th of the nation earn half of all the income. (Pictured on the next slide)
20% earn 50%
That means the other 80% of the population earn the other half.
Despite our numerous antipoverty programs, income inequality today is greater than it was in the 1940s.
Wealth: the property, savings, investments, and economic assets that people own.
more than one-third of the nation’s wealth is in the hands of just 1 percent of U.S. families. This 1 percent controls corporate America. (see the following slides)
Racial and ethnic differences also emerge. (see slide)
Some people are worth billions of dollars. How much is $1 billion dollars? This quote gives an idea.
Suppose you were born on the day Christ was born, that you are still alive today, and that you have been able to save money at the fantastic rate of one cent for every second that you lived—that is, 60 cents for every minute, $36 for every hour, or $864 for every day of your life during these past two thousand years. At that rate, it would take you another thousand years to save one billion dollars.
Vast wealth brings vast power.
With power you can make decisions. Decisions that affect millions of workers.
The wealthy live a life of privilege and make decisions that affect everyone else.
Lecture Starter
Instructors could use a case study to illustrate how poverty or lower social class could impact a person’s life chances by looking at their community, the school they had access to, parents’ involvement, culture, immigration status, and college major and how they may be impacted by race-ethnicity, sex, social class, age, and much more. Students tend to connect to real-life examples and do a better job of applying these concepts. Each theory can also be applied to evaluate the impact of inequality on this case study. (L.O.7.3)

16. The flow of money is not equal.
This is structural inequality.

17. The really wealthy own a lot. They control corporate America.

18. Racial-ethnic discrepancies in worth.

19. The Impact of Poverty Housing and Mortgages Education Jobs
Poor quality and high fees
Education
Poor property = poor schools
Jobs
Poor education makes the job market restricted.
Criminal Justice
Illegitimate opportunities
In Short: Quality of Life
Housing. Most of the poor live in substandard housing. Some rent from landlords who neglect their buildings. The plumbing may not work. The heating system may break down in winter. Roaches and rats may run riot.
When they try to get a mortgage they are hit with higher interest rates and more fees.
Education. Because our schools are supported by property taxes, and property in poorer areas produces less tax, the schools that the poor attend have smaller budgets.
This translates into outdated textbooks, inexperienced teachers (who can be paid less), and lower test scores.
Lower test scores, as you know, affect students’ chances of going to college, which, in turn, affects their earnings.
Jobs. Unlike the career paths open to children of the middle class, the low-paying jobs of the working poor lead to few opportunities.
Criminal Justice. With fewer legitimate opportunities the poor may turn to illegitimate ones.
The poor are more likely to be victims of violent crimes and to commit robberies and assaults, crimes for which offenders are punished severely.
White-collar crime may be more pervasive and costly to society, but it is less visible and carries milder punishments.
The net result of social inequality is a fundamental difference in people’s quality of life.
Discussion Question
Students often do not recognize the importance of socioeconomic position in their own and other people’s lives. Ask them to locate themselves in the class hierarchy and then try to gain insight into how their positions have provided them with advantages (or disadvantages). Encourage them to draw contrasts between the position of most college and university students and that of the poor, particularly in terms of the ability of poor people to improve their lives. (L.O.7.1)
MyLab Activity
Audio. NPR: A Few Small Steps to Homelessness After listening to this audio file, students can answer the following questions in small groups or in a discussion forum: a. What does Michele Kennedy tell us about why she became homeless with her kids? b. Why didn’t she qualify for welfare or a small apartment? Should there be changes in policies to address this? c. How does she teach us a different “view” about homelessness? What social problems are mentioned in Chapter 7 that often connected to poverty? d. How did she finally end up with a roof over her head? e. What would you tell a group of people about avoiding homelessness based on her story? (L.O.7.2)

20. How we define reality depends to a large extent on where we are located in the social class structure. Poor Americans are not likely to have the view illustrated in this cartoon.

21. 7.3 – Looking at the Problem Theoretically
Symbolic Interactionism
Functionalism
Conflict Theory
Summarize the different pictures that emerge when you apply symbolic interactionism, functionalism, and conflict theory to the social problem of poverty.

22. Explore: Poverty: The Role of Poverty - Should this be Next Door to Greatness: Poverty in Cambridge, MA

23. Symbolic Interactionism
The Relativity of Poverty
Poor by comparison
Changing Meanings of Poverty
Poverty changes as social conditions change
The text gives an examples of people in different positions who feel poor or not.
Living in a rural area, we may relatively wealthy.
Take that same income to an urban or suburban area and we don’t feel as wealthy.
Just graduating college you may be “struggling” but not poor.
Symbolic interactionism explores the examples of relative poverty and demonstrates how subjective poverty can be.
Symbolic Interactionists explore the meaning of poverty and how it changes.
Poverty was once seen as a personal problem, not a social problem.
When poverty was recognized, there were “deserving poor” (blind, people with disabilities, abandoned children) and “undeserving poor” (beggars, peddlers, prostitutes)
Then poverty became a product of corrupt cities
The point being, that as society changes our “understanding” of poverty also changes.
Short Assignment
Ask students to dress down and observe how other people treat them. Students can dress like a bag lady or a street person and enter an exclusive clothing store in a local mall. They should note whether they are helped and how they are treated by the store’s personnel. They should then dress in business attire and enter the same store, observing the same behaviors. (L.O.7.3)
Long Assignment
Ask your students to conduct an observational analysis of other people’s behavior in a shopping mall. Instruct them to watch for nonverbal symbols that provide information about an individual’s social class position. In addition to noting such characteristics as the person’s clothing, hairstyle, and jewelry, they can also note the type of store the person chooses to shop in or the names of stores printed on the bags where they have made purchases. Students should be able to describe what they used as evidence of a person’s social class, and also explain why the characteristics they observed tell them something about the person’s social class affiliation. They might also be asked to consider how they can distinguish between a person who has “bad taste” in clothing and one who simply cannot afford expensive clothing. (L.O.7.3)

24. Functionalism How Income Inequality Helps Society
Serves as motivation
How Poverty Is Functional for Society
poor people contribute to society’s well-being
Researchers Davis and Moore proposed that income inequality (jobs paying different amounts) is motivational because:
Some positions in society are more important for society’s welfare than others.
To attract the highly talented people that these positions require, they must offer high income and prestige.
These positions require years of training, which shows dedication and drive
Differences in income and prestige, then, that sort people by abilities and drive to succeed, help society function.
Herbert Gans proposed that the poor serve many functions for society
The poor do jobs no one else wants.
Life of poverty serves as entertainment in books and movies
The poor create jobs for other (social services)
The poor make up the majority of frontline soldiers
The poor help our self-concept (“I am not like them”)
Long Assignment
The purpose of this activity is to increase students’ understanding of how social and structural inequalities have affected and will continue to affect their lifestyles. The project is divided into two stages:
a. In the first stage, students will write a personal social history in which they provide details about their parents’ socioeconomic status. They should also include how they thought about their parents’ status while they were in school, how they were labeled by teachers and peers because of their parents’ status, how peer selection was influenced by these factors, and how their choice of college or university was affected by them.
b. In the second stage, students should make a budget that shows their anticipated earnings after graduation and how their after-tax monthly income will be spent. Formats are found in magazines like Money and Fortune or numerous personal finance books available in your school’s library. If students are uncertain about the information they need, they can obtain salary information from your campus career planning office, call professional offices to ask about starting salaries, or call employment agencies. They can find housing and other basic cost-of-living information for the city in which they plan to locate by using Internet resources in your library.
Students can report their findings in a paper or in class but should include, in addition to the socioeconomic personal history and budget, their conclusions about how social and structural inequality have limited or expanded their lives. (L.O.7.2)

25. Functionalists point out ways that the poor help society
Functionalists point out ways that the poor help society. Conflict theorists would state that this is excusing poverty
With tough economic times, a lot of people have lost their jobs—and their homes. If this happens, how can you survive? Maybe with a smile and a sense of humor to tap the kindness of strangers. I took this photo outside Boston’s Fenway Park.

26. Conflict Theory The Cause of Social Inequality
Limited resources
A General Theory of Social Class
Marx and class consciousness
Modifications of Conflict Theory
More than two classes
Role of unpaid workers
Central to conflict theory is inequality rooted in limited resources
Groups are in constant competition for resources.
Once you have resources you don’t give them up.
The result is a social class system in which the wealthy pass advantages to their children, while the poor pass disadvantages to theirs.
Marx identified the source of inequality in the relationship between the owners (bourgeois) and the workers (proletariat).
Owners exploit workers to make a profit. They also control the social institutions
Workers are in a false class consciousness and believe they can move ahead.
Marx believed the workers would eventually revolt when they realized what was happening.
Marx offered great understanding in the source of inequality, but is criticized for making his classes too narrow
Our bureaucratic system has more than just “workers” and “owners”
In addition, he focused on paid workers. This excludes the unpaid workers who are necessary and exploited (stay-at-home mothers).
Lecture Starter
Instructors can ask their students to describe the hierarchy at the place they work or in their families or other institutions, then discuss how their positions impact the decision-making power they have within that framework. Instructors can use the campus as an example of a place where students’ decision-making powers may be lacking because the institution tends to make decisions without their input. Examples of class offerings or scheduling are easy ways to connect to students within the framework of inequality of education. (L.O.7.4)

27. 7.4 – Research Findings Who are the Poor?
Is There a Culture of Poverty?
Who Rules the United States?
Inequality and Global Poverty
Summarize research findings on who the poor are, a culture of poverty, who rules the United States, and explanations of global poverty.
Discussion Question
Ask students to discuss the reasons that people are poor. This should include a differentiation between individual characteristics and structural features of society. Have students choose which explanation they feel best explains poverty and explain why. Discuss the pros and cons of each position and the impact it has on how the poor are viewed in society. (L.O.7.4)

28. Listen: NPR: A Few Small Steps to Homelessness

29. Who are the Poor? Permanence of Poverty State and Region
Most people do not remain in poverty
State and Region
Location, location, location
Race–Ethnicity
Children and the Elderly
Better to be old
The Feminization of Poverty
Minimum Wage Workers
Social Structure
The total number of poor in the United States remains fairly constant from year to year, but there is much change within this total.
Where you live matters. Poverty is heavily concentrated in inner cities, but rural areas have higher than average poverty.
The south consistently has higher poverty (see map on next slide)
African Americans, Latinos, and Native Americans are 2 to 3 times more likely to be in poverty than whites
Rates of poverty among the elderly are below the national average, but for children it is above.
The elderly worked hard to get programs to keep them out of poverty.
They are a powerful voting bloc
Increasing numbers of women in poverty, especially single mothers
You can’t raise out of poverty on minimum wage.
United States has a large underclass made up of people who are locked into minimum wage jobs. They clean motel rooms, wash dishes in restaurants, do the “stoop labor” on farms, and fill the sweatshops of our cities.
They will likely remain in poverty
The patterns of poverty do not reflect ability, drive, or laziness. They are a function of the social structure.
Features of the social systems impact poverty.
Short Assignment
Arrange a visit with a local homeless shelter in your community. Have students make observations about the setting, the services that are offered, the number of people served by the shelter, how the shelter is staffed, how it is determined who is able to receive services, etc. This information can be compared to how the poor or homeless population is represented in the textbook. Have students write a paper that includes all of their observations, along with a reflection of thoughts they had prior to visiting the shelter and subsequent thoughts after their visit. (L.O.7.5)

30. The south has had higher rates of poverty for two centuries.

31. If the rates of poverty for Latinos, African Americans, and Native Americans could be reduced to the rate of whites or of Asian Americans, millions of people would no longer live in poverty.
They would be spared its many deprivations, so hazardous to the individual and corrosive to society.

32. Rates of poverty among the elderly have steadily declined as rates among children rose.

33. Extensive poverty in childhood affects future generations.

34. Poverty in the United States has become concentrated among women and children. Sociologists call this pattern the feminization of poverty. Poverty is especially high among teenage mothers. These two high school students in Minneapolis are dropping their children off at day care while they attend classes. The day care helps young women complete high school, increasing their chances of avoiding poverty.

35. Twenty-nine percent of mothers received no child support payments
Twenty-nine percent of mothers received no child support payments. Combined with other factors it is no wonder there is such a high rate of women in poverty.

36. There are many different routes to homelessness.
The mentally ill, the technologically ill-equipped, victims of natural disasters, runaways, alcoholics, people who have been pushed out of their homes, and he elderly are a few of the ways individuals may end up homeless.
This man in California has a full-time job, but, unable to afford an apartment, he stays at a homeless shelter.

37. Is There a Culture of Poverty?
Way of life
Blame the victim
Testing the Concept
Is it true?
The culture of poverty was the result of research done by Oscar Lewis through participant observation and life histories.
People who remain poor year after year have developed a way of life that traps them in poverty.
Perceiving a gulf between themselves and the mainstream, these people feel inferior and insecure.
Concluding that they are never going to get out of poverty, they become fatalistic and passive. They develop low aspirations and think about the present, not the future
Most sociologists feel this view blames the victim for their poverty rather than looking at the features of the social structure that may lead to poverty.
After research on national statistics it was found that, contrary to popular belief, few poor adults pass poverty on to the next generation:
Most children of the poor do not grow up to be poor. Only 1 of 5 people who are poor as children are still poor as adults
But in support of Lewis’ culture of poverty, it was also found that 1 percent of the U.S. population remains poor year in and year out.
Few people adopt a culture of poverty.

38. HERBERT GANS, professor of sociology at Columbia University, is a past president of the American Sociological Association. He has written extensively on urban poverty and antipoverty policy. Here is what he wrote for you.
Dr. Gans dislikes the concept of a culture of poverty.
He believes that demonizing the poor and blaming the victim only makes it harder to get out of poverty.

39. Who Rules the United States?
Who Has The Power?
The Power Elite
The Pluralist View
Continuing Research on the Controversy
The Culture of Wealth
Central to conflict theory is understanding who has power.
Like wealth, power is a scarce resource: Some people have much of it, while others have little or none.
Max Weber, an early sociologist, defined power as the ability to get your way despite resistance
C.W. Mills talked about the power elite that rule the U.S. and impact the world
They are a small group made up of the top military, political, and business leaders makes decisions that direct the country.
This is not a formal group. They do not have meetings, secret or public. Some deny belonging to it, but structurally the power elite exists.
Members move from positions in government to corporations and back again. Through continued positions at the top there is a cohesion that develops.
This does not come from controversy, but rather a group with interlocking economic and political interests.
Their behavior stems not from a grand conspiracy to control the country but from mutual interest in solving the problems that face big business.
Pluralists argue that many interest groups—people united by their mutual interests in some matter— are competing for social, economic, and political power.
No single group is in control. As unions, industries, professional associations, and the like compete with one another, consensus is reached, or at least tradeoffs are agreed on, that allow decisions to be made and society to function.
The controversy between the pluralists and the sociologists who support the view of the power elite is long-standing and unresolved.
Is there a culture of wealth that keeps people from falling down the social class ladder, just as some claim that a culture of poverty makes it difficult for poor people to climb even a single rung of that ladder? Yes.
Many sociologists see danger in the concentration of wealth and power because it violates the democratic processes on which our country is premised.
Interlocking interests by wealthy people in powerful positions can result in a few non-elected individuals wielding immense control over the country.

40. The power elite is not a formal group and some people may not think they belong to it, but structurally it does exist.

41. Because the Power Elite does not meet as a group, it cannot be photographed. The Forbes are part of this group. Shown here are Malcolm Forbes and his three brothers at the Forbes Building. Their collection of nine Faberge Easter eggs that used to belong to the czars of Russia sold at auction for $100 million.

42. Inequality and Global Poverty
Global Stratification
Residual vs. mass poverty
Economic Colonialism
Economic invasion
National Power Elites
Hoarded wealth
A Culture of Poverty
Wealthy nations have pockets of residual poverty. In poor nations, most citizens live on less than $1,000 a year. These people are malnourished, chronically ill, and die young.
In the past dominant nations would invade weaker nations to obtain materials. Today, the colonialism is not political, but economic.
buy raw materials from the poor nations and sell them manufactured products
The poor nations sell their food and natural resources—from bananas and coffee to copper and manganese—at prices that barely allow them to keep up with their expanding populations.
Each year they fall deeper in debt.
Political pressure and military threats keep the weaker nations from taking control of their resources.
In some nations, they are not poor, but the wealth is hoarded and many live in poverty.
A national elite uses the nation’s resources as though they were its personal possession—which is how the elite does think of them.
They exchange national goods for personal pleasure.
Could there be a national culture of poverty?
Research find that most of the world’s poor make a living off the land.
With barely enough to live on, these poor farmers are reluctant to experiment with different crops or ways of farming:
Something new might fail, which would lead to hunger or death.
Their religion also teaches them to accept their lot in life as God’s will and to look for rewards in the afterlife.

43. The children killed by the death squads roam the streets begging, shining shoes, or selling their bodies. They annoy the “respectable” people in the community. There are no social institutions to care for the children, so they kill them.
Life in the slums isn’t healthy for anyone. You can see the open sewage trench in this Brazilian favela. Beyond this negative aspect of living here are the death squads discussed in this box.

44. 7.5 – Social Policy Changing Views and Changing Social Policy
Progressive Taxation
Public Assistance Programs
Feminized Poverty and Child Support
Private Agencies and Faith-Based Programs
The Purpose of Helping the Poor
Jobs and Child Care
Education Accounts
Giving the Poor More Money
Explain how shifting views have influenced social policy, what progressive taxation is, and what social programs to relieve poverty are being implemented or considered.

45. Changing Views and Changing Social Policy
Early United States
Poor are wayward and lazy
Cities corrupt
The Great Depression
Poverty skyrocketed
Middle-class stood next to “old poor”
World War II
Poverty declined
The Basic Difference—Cause as Inside or Outside of People.
Our historical period shapes our view of poverty.
Early U.S. Poverty was the result of laziness.
Boston opened a “workhouse” where the poor had to work until they showed that they had acquired self-discipline and an appreciation of hard work.
Philadelphia Quakers built almshouses that took in poor women and children.
These social policies marked a departure from providing relief on an individual basis.
In the 1830s, the cities were viewed as a corrupting influence. So it is better to stay in rural areas.
With the Great Depression the image of poverty changed. Now the middle-class stood with the poor in breadlines. People could not escape poverty.
Poverty now was not the result of individuals faults. Now people claimed poverty was the result of institutional failures.
The economy picked up during WWII and poverty declined.
It did not disappear, but was much less visible.
Looking at the history reveals that views of poverty change from internal or external consequences depending on who is affected.
Where a society believes poverty comes from affects social policy.

46. To help those suffering during the Great Depression of the 1930s, the federal government began the Works Progress Administration (WPA). Participants followed the traditional gender roles of the time, with men doing construction and women using homemaking skills.

47. To reduce social inequality, the United States has a policy of progressive taxation.
Tax rates progress (increase) as income progresses (increases)
It is not just the amount of taxes that are paid, but the rate itself that increases: The higher the income, the higher the tax rate.
As Americans earn more, they not only pay more dollars in taxes, but they also pay a larger percentage of their income in taxes.
To help the poor, we have a social policy called the Per Child Tax Credit, commonly called a negative income tax. Parents whose income falls below a specified amount get a tax credit of $1,000 per child. If their income is low enough, they not only pay no tax, but they also get a check from the government when they file their tax form
Progressive taxation raises huge sums of money. But, what do we do with all the money?

48. Public Assistance Programs
Social Insurance
Teaching Job Skills
Welfare
Workfare
This type of program, which includes unemployment compensation and Social Security, is designed to help people help themselves. Money is deducted from workers’ paychecks, and workers are able to draw on this pool when they need it.
Help for people to get off welfare. Most of these programs, such as the Job Corps, center on teaching job skills. Some also teach personal grooming, punctuality, and politeness so that prospective workers can meet employer expectations.
Giving money, food, housing, and medical care to people who have a low enough income to qualify for them.
Critics claim that welfare reduces people’s incentive to work.
The federal government passed the 1996 Personal Responsibility and Work Opportunity Reconciliation Act. This law requires states to place a lifetime cap on welfare assistance and compels welfare recipients to look for work and take available jobs.

49. People waiting for benefits experience rudeness, patronization, and anger. All this is demoralizing and hurts their self-concept.
Are the poor less entitled to a positive self-concept than the wealthy?
This woman is waiting in a county welfare office in Sacramento, California. She is fearful that with the state’s budget deficit the food stamps for her daughter will be cut.

50. Feminized Poverty and Child Support
Women with children make up most of the poor.
Unequal pay
Expensive childcare
Absent fathers should support children.
Social policies that lead to flexible work schedules and higher pay for women will help.
So will improvements in women’s job training for career advancement.
Social policies that promote better child care facilities and child care assistance will also help.
Most mothers do not receive their full rewards for childcare.

51. Private Agencies and Faith-Based Programs
Helping the poor is not limited to the government.
Private agencies help the desperate poor
Faith-based agencies can compete for federal funds.
These groups are not always visible because they are helping the poorest of the poor who live out of site of most Americans
Now faith-based groups can compete for federal funds. This is important because these groups do much to help poverty.
Their approaches vary
Whether faith-based, private, or government, it needs to be monitored.

52. The Purpose of Helping the Poor
Regulating the Poor
Used during booms, left during busts
Welfare rule enforcement
The economy needs low-skilled workers.
They are put to work when the economy expands and laid off when it busts.
Welfare works to control workers as well.
It keeps workers happy enough during bad times to not riot.
During times of high unemployment the rules soften, they tighten when the market is more open.
If this is the thinking, it is no coincidence that the Personal Responsibility and Work Opportunity Reconciliation Act was passed during the longest “boom” in U.S. history. When more workers were needed, the federal government required states to force the unemployed into the labor market by tightening their rules for welfare eligibility.

53. Jobs and Child Care To deal with poverty, provide jobs.
Government or private creation
Wages need to lift people out of poverty
Child care and transportation are also necessary.
The federal government lifted millions out of poverty during the Great Depression by providing jobs building bridges, roads, parks, and public buildings.
Programs that create jobs stimulate the economy, for the workers spend the money they earn. This, in turn, produces even more jobs.
The debate rages over whether the government or private corporations should create these jobs
Regardless of where the jobs come from, if the wages aren’t high enough it won’t lift people out of poverty.

54. Education Accounts
Government could establish credit for every citizen for education
Used at an approved institution
Only for education expenses
Students must make progress in program
Education is effective for reducing poverty.
Not only would this program reduce welfare, but it would also increase people’s earning power for their entire lives. The additional taxes from these larger earnings would make up for the costs of the education accounts.

55. Promoting education can and does produce problems.
If this coal miner in Illinois were your father and you go to college, can you see how your worlds would become separated?

56. Giving the Poor More Money
Income Maintenance Experiments
Random samples
Urban and rural
Avoided welfare wall
Some worked less, most did not
Spent more on durable goods
Saved less
What would happen if we just gave the poor more money?
Random samples of poor people in Denver, Seattle, and New Jersey were given different amounts of money
Both urban and rural people were selected.
If they went to work, only part of the money they received was cut. This was to help avoid the welfare wall—the disincentive to work that comes when the amount that people earn from working is not much more than what they get on welfare.
Most people worked more, some were glad to get away from bad jobs.
They spent more on durable goods (household items) than nondurable goods (entertainment).
With the security that came from a regular income over several years, they saved less and went into debt more—just like many families who are not poor.
The plan was never put into place by the government.

57. 7.6 – The Future of the Problem
Any solution will cost us.
Views are divided on what to do for poverty
Poor do not have political power
Explain what the likely future of the social problem of poverty is and why.
Any solution to poverty will be expensive.
We can’t even agree on what to do for poverty.
Most agree that people living on the street is unjust, but don’t know what will help
Politicians and the public disagree on solutions
The poor have little political power and do not vote at high enough rates to make changes.
The sad truth is that the U.S. will probably continue as it has. Putting together programs from time-to-time, but not able to sustain programs or do enough
The structural dimension of this social problem will be mostly lost from sight and the poor will continue to be blamed for their poverty.

58. Question for Discussion
What are some possible policies to help those in poverty?