1. POVERTY & WEALTH INEQUALITY CSI – UNIT 5 - 2015

2. 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

3. 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%)

8. 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

9. POVERTY DEFINITION – CAUSES – EFFECTS

10. 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

11. 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

13. 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

14. How can the poverty cycle be broken?

15. 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

16. 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

17. 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