1. Definitions of Poverty Absolute Standard Cost of Food Budget Times 3 $19,971 for a Family of Four $10,160 for a Single Person Median Income = $46,326 (2005) 2005: 37 million people (12.6%) Relative Standard (European Union) 50% of the Median Income World Bank Extreme Poverty = $1 per day (1.1 billion) Moderate Poverty = $1 to $2 per day (1.6 billion)

2. Poverty Thresholds for 2005 One Person Under 65 $10,160 One Adult, One Child $13,461 Two Adults, No Children $13,078 One Adult, Two Children $15,735 Two Adults, Two Children $19,806 Two Adults Three Children $23,307 Nine People $40,288

3. Definitions of Poverty Absolute Standard Cost of Food Budget Times 3 $19,971 for a Family of Four $10,160 for a Single Person Median Income = $46,326 (2005) 2005: 37 million people (12.6%) Relative Standard (European Union) 50% of the Median Income World Bank Extreme Poverty = $1 per day (1.1 billion) Moderate Poverty = $1 to $2 per day (1.6 billion)

4. Poverty Rates Over Time Absolute Standard Relative Standard 1949 39% 25% 1969 12.1% 21% 1979 11.7% 1989 12.8 1995 13.8 1999 11.3 26% 2001 11.7 2002 12.1 2003 12.5 2004 12.7 2005 12.6

5. Poverty Rates 1959 to 2003

6. Poverty Rates Absolute(2004) Relative(2000) All People 12.6% 21.1% Ethnicity White 10.8% 15.7% Black 24.6% 35.5% Asian 9.9% 18.9% Hispanic 21.8% 37.0% Native American 25.9% NA Age Under 18 17.4% 18 to 64 11.2% 65 and up 10.5% Family Type Married Couple 5.6% 12.7% Married With Children 6.9% 14.2% Female Headed with Children 35.3% 52.6% Unrelated 18.9% 34.1% Education (Age 25+) Less than High School 22.2% 42.6% High School 9.2% 19.7% Some College 5.9% 13.4% College Graduate 3.2% 6.4% Citizenship Native 12.0% 20.2% Naturalized Citizen 10.2% 19.7% Not a Citizen 21.6% 34.4%

7. International Comparisons 50% of the Median Income Total Population Children Australia (1994) 14.3% 15.8% Austria (2000) 7.7% 7.8% Belgium (2000) 8.0% 6.7% Canada (2000) 11.4% 14.9% Denmark (1992) 7.2% 5.0% Finland (2000) 5.4% 2.8% France (1994) 8.0% 7.9% Germany (2000) 8.3% 9.0% Italy (2000) 12.7% 16.6% Mexico (2002) 20.2% 24.8% Netherlands (1999) 7.3% 9.8% Spain (2000) 14.3% 16.1% Sweden (2000) 6.5% 4.2% Switzerland (2002) 7.6% 6.7% Taiwan (2000) 9.1% 8.0% United Kingdom (1999) 12.4% 15.3% United States (2000) 17.0% 21.9%

8. Distribution of Income Percent of Income 2003 1967 Lowest Quintile 3.4% 4.0% Second Quintile 8.7% 10.8% Third Quintile 14.8% 17.3% Fourth Quintile 23.4% 24.2% Top Quintile 49.8% 43.8% Top 5% 22.4% 17.5%

9. Gini Index 19892000 United States0.3380.368 Germany0.2570.252 France0.2870.288 United Kingdon0.3360.345 Canada0.2810.302 Austria0.2270.261 Belgium0.2320.277 Denmark0.2540.257 Ireland0.3280.323 Netherlands0.2660.248 Norway0.2310.251 Sweden0.2180.252 Switzerland0.3070.274

10. Distribution of Wealth 2001 1983 Bottom 40% 0.3% 0.9% 3rd 20% 3.9% 5.2% 4 th 20% 11.3% 12.3% Top 20% 84.4% 81.3% Top 5% 59.2% Top 1% 33.4%

11. Aid to Families with Dependent Children (AFDC) 1. Recipients a. Single mothers with children b. In California, also two-parent families if the main earner is unemployed c. Income is below a certain amount 2. Benefits for a mother with 2 children and no other income a. 1996: $565 per month b. 2001: $645 per month c. Declined $0.30 for every dollar earned working d. Also eligible for Food Stamps and Medicaid and possibly Rent Supplements 3. Numbers as of 1996 a. 2.6 million people in California; 12.9 million people nationally b. Perhaps ¼ of recipients collected for 10 years or more 4. Perverse Incentives a. Incentive not to work b. Incentive for fathers not to pay child support c. Incentive for single mothers to live separately from their own parents d. Incentive for more out-of-wedlock births

12. Personal Responsibility and Work Opportunity Act of 1996 1. New Name: Temporary Assistance for Needy Families – TANF (Cal Works) 2. The recipient can collect benefits for no more than two years. The two years is to be used to get ready for employment. The recipient can collect benefits for no more than five years in a lifetime. 3. Characteristics of Recipients 40% had failed to finish high school 75% were in the bottom 25% on aptitude tests 4. Numbers receiving assistance fell from 1996 to 2001 a. Americans: from 12.9 million to 5.3 million b. Californians: from 2.6 million to 1.2 million c. Percent of Americans fell from 4.5% to 1.9% 5. Gain from working rather than being on welfare: $2,000 per year in 1986 and $7,100 per year in 1997 6. Employment Rates of Single Mothers: 60% in 1994 72% in 1999