Lauryn Alley

4/27/19
POS 1020
Dr. Barone

Poverty in America

The United States is known for its overwhelming success of capitalism and providing the perfect

environment for those on the quest of the “American Dream.” However, despite the United States’

success for the few lucky ones, the United States has a much higher poverty rate compared to other

industrialized countries. Even though the wealth of the high society gleams throughout most of the United

States, most US citizens struggle to make ends meet. In the book The Other America by Michael

Harrington he explains “...the United States contains an underdeveloped nation, a culture of poverty. Its

inhabitants do not suffer the extreme privation of the peasants of Asia or the tribesmen of Africa, yet the

mechanism of misery is similar. They are beyond history, beyond progress, sunk in a paralyzing, maiming

routine,” (Harrington , Michael. P. 158). An economic underworld lays in the midst of every powerhouse

city in the United States. Harrington illustrates the economic underworld as “the place where tens of

thousands of hidden people labor at impossible wages. (Harrington , Michael. P. 20)” Poverty is defined

in the United States as “the fraction of persons (or families) with incomes below an absolute threshold,”

(Hoynes, Hilary W., et al.). The United States government measures the percentage of Americans in

poverty annually by comparing individuals’ or families’ incomes to establish a poverty threshold, or the

minimum amount of money necessary to provide basic needs. An economist from the Social Security

Administration, Mollie Orshansky, developed the idea of how to calculate a “poverty threshold” in 1963.

She constructed her idea around the fact that one-third of families’ after-tax income was being spent on

food. After learning this the official poverty measure was calculated by comparing an individual or

families’ pre-tax income against a threshold that is adjusted according to family size and multiplied by

three times the cost of the minimum food diet in 1963. The United States government adopted

Orshansky’s idea in 1969.

 Throughout the years the calculation of the threshold has experienced some minor changes, but

still remains true to Orshanksky’s original format from 1963. The U.S. Census Bureau, the government

agency in charge of measuring poverty, began using the Consumer Price Index to reflect the increased

price of living each year and factored in a families’ size, composition, and the age of the householder to

adjust the threshold.

Despite the adjustments, many believe that the official poverty measure and the poverty

threshold are faulty mechanisms. Researchers believe “...poverty is a state of relative economic

deprivation, that it depends not on whether income is lower than some arbitrary level but on whether it

falls far below the incomes of others in the same society,” (Sawhill , Isabel V.). In 1995, the National

Research Council submitted a number of recommendations on updating the poverty measurement in the

United States to the government and the Census Bureau. The recommendations included factoring in

expenses that the official poverty measure neglects such as: out of pocket medical costs, work expenses,

and child care. The Council also recommended a geographical variation to the threshold. The

recommendations suggested by The Council fueled discussion about the change of the poverty threshold.

Today in 2019, we have yet to witness any changes to the way our government measures poverty in this

country.

The United States government has been battling poverty for centuries, however, it seems poverty

is winning. Isabel V. Sawhill, the former Associate Director of the Office of Management and Budget

under the Clinton administration wrote, “The United States produces more per capita than any other

industrialized country, and in recent years governments at various levels have spent about $350 billion per

year, or about 3.5 percent of gross domestic product, on programs serving low-income families,” (Sawhill

, Isabel V.). The amount of money being pumped into fighting poverty is increasing while the number of

Americans living below the poverty threshold is remaining the same, “in 2017, there were 39.7 million

people in poverty” (US Census Bureau). Although poverty rates are mainly influenced by the economy,

the lack of government safety nets and the changes in America’s makeup have allowed for the staggering

levels of poverty seen today. The system the United States has created in its efforts to reduce poverty has
not increased or decreased the suffering of its citizens, but instead ignored the factors that influence

poverty.

Figure 1. 2017 Poverty Rate in the United States

https://www.census.gov/library/visualizations/2018/comm/acs-poverty-map.html

Harrington , Michael. “The Rejects.” The Other America, Macmillan Publishing Co., Inc. , 1969,
pp. 19–39.
Harrington , Michael. “The Two Nations.” The Other America, Macmillan Publishing Co., Inc. ,
1969, pp. 158-174.
US Census Bureau. “Income and Poverty in the United States: 2017.” Income and Poverty in the
United States: 2017, US Census Bureau, 12 Sept. 2018,
www.census.gov/library/publications/2018/demo/p60-263.html.
Hoynes, Hilary W., et al. “Poverty in America: Trends and Explanations .” Journal of Economic
Perspectives, 1st ed., 20, University of California, Davis, 2006, pp. 47–68 .
 Sawhill , Isabel V. “Poverty in America.” Econlib, The Library of Economics and Liberty ,
www.econlib.org/library/Enc/PovertyinAmerica.html.

Despite the measurement of poverty only becoming official in the United States in the 1960s, the

less fortunate were still recognized, “In the late 1950s, the poverty rate was approximately 22 percent,

with just shy of 40 million Americans living in poverty. The rate declined steadily, reaching a low of 11.1

percent in 1973 and rising to a high of nearly 15 percent three times – in 1983, 1993 and 2011. However,

the 46.2 million Americans in poverty in 2011 is the most ever recorded,” (Sawhill , Isabel V.). The

poverty rate in the United States is a constant increasing and decreasing trend and to fix the problem we

must identify the cause.

70% of our nation’s poor are women and children, and over 35% of single mothers live and raise

their families below the poverty line (The Women's Legal Defense and Education Fund). These facts are

public knowledge, and yet women still account for 60% of the nation’s lowest paid workers (The

Women's Legal Defense and Education Fund). Inequality of pay between men and women exists at all

levels and types of employment no matter the work experience or seniority of a female. Along with not

receiving the same pay, employed single mothers will require some sort of child care. Child care is not

cheap, and making it affordable has become a lost concept. Most single mothers will pay a large sum on

just child care every week. Single mothers and females are getting lost below the poverty line due to

unequal pay and the steep costs of raising a family, addressing these issues could greatly affect the 11.5

million single mothers and the rate at which our poverty line increases and decreases.

The chances of families and citizens living in poverty has become strongly correlated with race

and ethnicity. Immigration has been credited to have increased America's poverty percentage because

most immigrants entering the United States are already significantly below the poverty line compared to a

native-born resident. In a snapshot of current poverty in 2003, “Individuals born in the United States have

a poverty rate of 11.8 percent, while those who are immigrants have a rate of 17.4 percent,” (Hoynes,

Hilary W., et al. p. 49). The amount of immigrants traveling into the United States has noticeably

increased throughout the years', South American countries became more violent and the safety of the
United States became more appealing. In 2017, over 44.5 million immigrants resided in the United States

(Zong, Jie, et al). Despite the increased amount of safety the U.S. offers, the job opportunities are limited.

Many immigrants traveling from South or Central America are not able to speak English and lack the

skills and education that most U.S. citizens possess. Without the proper skills or education, the

opportunity for higher paying more stable sources of income is slim to none. Many immigrants work as

“at will” employees, allowing their employer to fire them at any point in time with minimal notice or

reasoning. According to the Center for Immigration Studies “In 2014, 49 percent of maids, 47 percent of

taxi drivers and chauffeurs, 33 percent of butchers and meat processors, and 35 percent of construction

laborers were foreign-born,” (Camarota, Steven A., and Karen Zeigler). The influx of foreign persons into

the United States is not increasing nor decreasing the level of poverty. Despite receiving low wages and

only temporary employment, over 28.6 million foreign workers were employed in 2017.

The number of people living slightly or extremely below the poverty line varies from year to

year, but seems to be on a constant uphill climb. By identifying the reasons that are influencing the

poverty threshold, the government can begin to slowly tackle this immense problem.

Hoynes, Hilary W., et al. “Poverty in America: Trends and Explanations .” Journal of Economic
Perspectives, 1st ed., 20, University of California, Davis, 2006, pp. 47–68 .
Zong, Jie, et al. “Frequently Requested Statistics on Immigrants and Immigration in the United
States.” Migrationpolicy.org, Migration Policy Institute, 15 Apr. 2019,
www.migrationpolicy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-
states#Labor.
Camarota, Steven A., and Karen Zeigler. “Immigrants in the United States.” CIS.org, Center for
Immigration Studies, 3 Oct. 2016, cis.org/Report/Immigrants-United-States.
https://www.debt.org/faqs/americans-in-debt/poverty-united-states/
“Women and Poverty in America.” Women and Poverty in America | Legal Momentum, The
Women's Legal Defense and Education Fund , www.legalmomentum.org/women-and-poverty-america.

The government has created an endless amount of federal programs to try and help families of

different makeups, race, financial status, and occupation propel themselves above the poverty line. 730

billion dollars was spent in 2016 on major-assistance programs for low-income Americans (Council of

Economic Advisers). Many of these federal programs are poorly designed and not strong enough to truly
provide for families. The programs that have had a positive effect for families struggling financially are

granted to everyone in the United States and not included in the official poverty measure such as food

stamps, Medicare, Earned Income Tax Credit, and housing assistance programs. As well as being omitted

from the official poverty measurement, as these programs lack easy accessibility. Nevertheless, some

programs are still useful and easily accessible but were unfortunately created too late to get ahead of our

already steep poverty threshold.

From a financial standpoint, the government has created programs to assist people who fit a

certain criteria, unfortunately many families will not qualify for one or more of these federal programs.

The Social Security Administration was created in 1935 as a part of President Franklin Roosevelt’s New

Deal to try and pull America out of the Great Depression. Social Security is an economic safety net for

many retirees and disabled workers, “...about 169 million Americans pay Social Security taxes and 61

million collect monthly benefits, (National Academy of Social Insurance).” Social Security is a simple

way for working persons to have a portion of their pay go to the Social Security Administration to save

for retirement or an expected accident causing the inability to work but this money isn’t easily accessible.

Franklin Roosevelt's ideas of helping the population save their money for unexpected accidents or

retirement was useful in the 1930s but today, people living in the depths of extreme poverty need access

to funds immediately while trying to avoid tedious guidelines.

The Temporary Assistance for Needy Families (TANF) provides federal grants to states that will

distribute benefits programs to assist families and children that do not have basic necessities. The federal

government provides the funds to states and allows them the freedom to mold their social programs. The

funds can be used for programs like, job opportunities and preparation, family planning, and cash

assistance. Providing cash assistance to families seems to be the most effective use of TANF, in 2015

three million people were provided with cash assistance from the program (UC Davis Center for Poverty

Research).

In 1975, the most influential program for families suffering from low-incomes was established,

The Earned Income Tax Credit (EITC). The EITC provides immense support to low-income working
parents, “in 2015, the EITC reached 46.2 million tax filers at a total cost of $58.8 billion,” (UC Davis

Center for Poverty Research). The single downfall of the EITC is the criteria. The amount of “credit”

earned depends on the size of a family, the larger a family the more credit that can be earned. Without

children, the EITC will only present a maximum credit of $519 dollars compared to the $3,461 budget

that a working couple with one child will receive.

In 1974, Congress authorized a new program developed by the US Department of Housing and

Urban Development called Section 8 Housing Vouchers. The program had the intentions of providing

rental subsidies in newly constructed apartment buildings for low-income families who were unable to

access clean, safe, and affordable housing . Despite the high hopes and good intentions of this program,

an application and lengthy waiting list stands in the way for many low-income families. Along with the

possibility of your application being denied, or being left on the waiting list, many apartment complexes

do not accept Section 8 Housing Vouchers.

Figure 2. Earned Income Tax Credit based on family size.

https://www.taxpolicycenter.org/briefing-book/what-earned-income-tax-credit
 Accessibility to healthcare is significant in the terms of low-income Americans. In the United

States we are not guaranteed free health care, which results in many families and individuals having to

question, “Is it worth the bill?” Realizing this issue, the government has worked to create programs to

increase the accessibility to healthcare

In 1965, the government formulated a program to help low-income families and get

access to healthcare. The federal and state partnered program, Medicaid has provided health care to

millions of people, “Approximately 68.5 million people were enrolled in Medicaid or the Children’s

Health Insurance Program (CHIP) in 2015,” (UC Davis Center for Poverty Research). Medicaid is also

based on the amount of income you receive and the size of your family, and it is possible to not meet the

qualifications and be denied this federal programs assistance.

The federal program Women, Infants, and Children (WIC) was created in 1972 to provide for

new mothers, pregnant women, nad young children below the poverty line suffering from inadequate

nutrition. In a study conducted by the University of California, Davis Center for Poverty Research,

researchers discovered “...WIC leads to a ten percent increase in the birthweight of infants born to

participating mothers,” (UC Davis Center for Poverty Research). The WIC is extremely successful for

providing for women, infants and children, but it is not an entitlement program. Non-entitlement

programs are only allotted a certain amount of money from Congress which directly affects the number of

people who can benefit from the WIC.

The Affordable Care Act originally created in 2010 and amended by President Obama in 2012 to

help decrease the cost of individual health care. The most recent addition to the fight against poverty has

already had tremendous impact on the low-income community, “... the ACA’s health insurance provisions

for people under age 65 was $705 billion in 2017,” (UC Davis Center for Poverty Research).

The U.S. government has failed to modify their system on fighting poverty to keep on track with

our constantly improving world. Failing to keep up with the progression of the poverty threshold has left

our nation in a large hole that seems almost impossible to get out of.
 Trisi , Danilo. “Economic Security Programs Cut Poverty Nearly in Half Over Last 50 Years,
New Data Show.” Center on Budget and Policy Priorities, Center on Budget and Policy Priorities, 14
Sept. 2018, www.cbpp.org/research/poverty-and-inequality/economic-security-programs-cut-poverty-
nearly-in-half-over-last-50.
“Poverty Has Declined in the United States, and Work Requirements in Welfare Programs Are
Not a Punishment.” Edited by Council of Economic Advisers, The White House, The United States
Government, 7 Aug. 2018, www.whitehouse.gov/articles/poverty-declined-united-states-work-
requirements-welfare-programs-not-punishment/.
“What Is Social Security?” National Academy of Social Insurance, National Academy of Social
Insurance, www.nasi.org/learn/socialsecurity/overview.
“What Are the Major Federal Safety Net Programs in the U.S.?” UC Davis Center for Poverty
Research, U.S. Department of Health and Human Services, 15 Mar. 18AD,
poverty.ucdavis.edu/article/war-poverty-and-todays-safety-net-0.
“Housing Choice Vouchers Fact Sheet .” HUD.gov / U.S. Department of Housing and Urban
Development (HUD), U.S. Department of Housing and Urban Development,
www.hud.gov/topics/housing_choice_voucher_program_section_8.

As children grow up they absorb everything they are exposed too, including the way they are

living. Poverty among children is slowly declining every year but the reasons allowing children to fall

below the poverty line are increasing. “In 1998, over 13 million children lived in families with incomes

below the official poverty line of $13,003 a year for a family of three or $16,660 for a family of four,”

(Sherman, Arloc). However, despite those numbers many children who live below the poverty line grow

up in working families but the families amount of income can’t keep them afloat. More and more working

parents are earning lower wages that don’t come close to the poverty line. Along with not earning enough,

many families are becoming single-parent households, “the dramatic increase in the numbers of single

parents had the opposite effect, boosting child poverty rates, especially in the 1970s,” (Sherman, Arloc).

Research collected by the U.S. Census Bureau in 2017 reported that 25.7 percent of single mother

households fall below the poverty line compared to 4.9 percent of married couple households (US Census

Bureau).
 Figure 3. Percentage of Children under age 18 in families living in poverty in 2016.
https://nces.ed.gov/programs/coe/indicator_cce.asp

Along with being financially trying for children, poverty can also take a toll on a child’s

education, health, and development. Low-income children suffer from insufficient diets. Their diets are

either high-calorie with no nutritional value or low-calorie and not filling. “More than 1 million low-

income children suffer from anemia, usually caused by low iron, which stops blood cells from carrying

enough oxygen to the body and brain and is associated with serious long-term learning and behavior

problems and lower intelligence…” (Sherman, Arloc) due to families not being able to provide the

nutrition a growing child needs. According to the Centers for Disease Control and Prevention, “A baby

born to a poor mother is more likely to die before its first birthday than a baby born to an unwed mother, a

high school dropout, or a mother who smoked during pregnancy..” (Sherman, Arloc). In a series of

experiments conducted in the 1970s and the 1980s researchers discovered a direct link between the

amount of income a family earns and a child’s schooling. Researchers learned, “the higher the family

income, the more likely the child will stay enrolled in school longer,” (Sherman, Arloc). According to

research from the U.S. Department of Education, children are at a greater risk of failing to finish high

school due to poverty than a child born to a single-parent household or teen parents,” (Sherman, Arloc).
 Figure 4: Dropout rates of 15 through 24 year olds who dropped out of grades 10-12, by family
income: October 1972 through October 2009
https://nces.ed.gov/pubs2012/2012006.pdf

Because children who grow up in poverty are not able to obtain or finish their education they

lack skills earned from finishing high school. Without the adequate skills, children raised in poverty are

only able to apply for low-wage, hourly jobs that won’t be able to comfortably support a family of more

than one. An economic theory called the “Poverty Cycle” explains that families stuck in poverty will raise

children stuck in poverty unless there is an outside intervention. While degrading a child’s education,

health and skills, poverty among children will also result in a long term effect on the economy. The

Children’s Defense Fund estimated “the lifetime loss in productivity of the 14 million children in the

United states who experienced poverty in 1996 will amount to about $130 billion,” (Sherman, Arloc).

Poverty among children is not only affecting children, but will take a greater toll on all American citizens

if a solution is not found. The solution for children and families to escape poverty can not be a short term

government program, children need stability, education, and a healthy lifestyle.

 Figure 5. The Generational Poverty Cycle
http://advocateforprosperity.org/index.php/how-families-can-end-generational-poverty/

Sherman, Arloc. “Children’s Poverty in America.” Forum for Applied Research and Public
Policy, vol. 14, no. 4, 1999, p.68. General OneFile,
http://link.galegroup.com/apps/doc/A60076795/GPS?u=vol_n42b7sid=GPS&xid=8c08fb29. Accessed 4
Apr. 2019.
US Census Bureau. “Income and Poverty in the United States: 2017.” Income and Poverty in the
United States: 2017, US Census Bureau, 12 Sept. 2018,
www.census.gov/library/publications/2018/demo/p60-263.html.

There seems to be no end to the everlasting struggle that poverty presents our nation. Over the

years, former Presidents Franklin Delano Roosevelt and Lyndon B. Johnson have created social programs

that affected their decade’s poverty threshold but seemed to not carry into the years after that. Poverty is

not just the state of being financially unstable but also not being able to provide food, education, and

shelter for yourself and your family. Our government has failed our citizens by failing to identify the

concepts that are influencing the rate at which poverty is increasing and decreasing. Immigration rates, an

increase of single-mothers, and failed social programs have fallen under the government’s radar and go

unnoticed. By ignoring the little things, we have created a problem that seems to immense to handle. If

the government can address the small issues and begin making minor changes to influence the lives of

those affected by poverty, our nation will begin to change.

Work Cited:
 Camarota, Steven A., and Karen Zeigler. “Immigrants in the United States.” CIS.org, Center for
Immigration Studies, 3 Oct. 2016, cis.org/Report/Immigrants-United-States.
https://www.debt.org/faqs/americans-in-debt/poverty-united-states/
Harrington , Michael. “The Rejects.” The Other America, Macmillan Publishing Co., Inc. , 1969,
pp. 19–39.
Harrington , Michael. “The Two Nations.” The Other America, Macmillan Publishing Co., Inc. ,
1969, pp. 158-174.
“Housing Choice Vouchers Fact Sheet .” HUD.gov / U.S. Department of Housing and Urban
Development (HUD), U.S. Department of Housing and Urban Development,
www.hud.gov/topics/housing_choice_voucher_program_section_8.
Hoynes, Hilary W., et al. “Poverty in America: Trends and Explanations .” Journal of Economic
Perspectives, 1st ed., 20, University of California, Davis, 2006, pp. 47–68 .
“Poverty Has Declined in the United States, and Work Requirements in Welfare Programs Are
Not a Punishment.” Edited by Council of Economic Advisers, The White House, The United States
Government, 7 Aug. 2018, www.whitehouse.gov/articles/poverty-declined-united-states-work-
requirements-welfare-programs-not-punishment/.
Sawhill , Isabel V. “Poverty in America.” Econlib, The Library of Economics and Liberty ,
www.econlib.org/library/Enc/PovertyinAmerica.html.

Sherman, Arloc. “Children’s Poverty in America.” Forum for Applied Research and Public
Policy, vol. 14, no. 4, 1999, p.68. General OneFile,
http://link.galegroup.com/apps/doc/A60076795/GPS?u=vol_n42b7sid=GPS&xid=8c08fb29. Accessed 4
Apr. 2019.
Trisi , Danilo. “Economic Security Programs Cut Poverty Nearly in Half Over Last 50 Years,
New Data Show.” Center on Budget and Policy Priorities, Center on Budget and Policy Priorities, 14
Sept. 2018, www.cbpp.org/research/poverty-and-inequality/economic-security-programs-cut-poverty-
nearly-in-half-over-last-50.
US Census Bureau. “Income and Poverty in the United States: 2017.” Income and Poverty in the
United States: 2017, US Census Bureau, 12 Sept. 2018,
www.census.gov/library/publications/2018/demo/p60-263.html.
“What Are the Major Federal Safety Net Programs in the U.S.?” UC Davis Center for Poverty
Research, U.S. Department of Health and Human Services, 15 Mar. 18AD,
poverty.ucdavis.edu/article/war-poverty-and-todays-safety-net-0.
“What Is Social Security?” National Academy of Social Insurance, National Academy of Social
Insurance, www.nasi.org/learn/socialsecurity/overview.
“Women and Poverty in America.” Women and Poverty in America | Legal Momentum, The
Women's Legal Defense and Education Fund , www.legalmomentum.org/women-and-poverty-america.
Zong, Jie, et al. “Frequently Requested Statistics on Immigrants and Immigration in the United
States.” Migrationpolicy.org, Migration Policy Institute, 15 Apr. 2019,
www.migrationpolicy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-
states#Labor.
Poverty in America

Lauryn Alley

POS 1020
Dr. Barone
May 10, 2019