1. Economic Problems:
Poverty & Wealth

2. Economic Problems Facing the United States
Stagnant incomes
Real income: income adjusted for inflation
Taxes
The savings rate
A debtor nation
National debt: the total amount the U.S. government owes
Economic Problems Facing the United States

3. Economic Problems Facing the United States

4. Economic Problems Facing the United States

5. Biological (Absolute) poverty
starvation and malnutrition
Relative poverty
people living below the standard of living for their society
The Nature of Poverty

6. Problems with the poverty line
Official poverty
income level at which people are eligible for welfare
Problems with the poverty line
Not adjusted for different costs of living
The Nature of Poverty

7. The Significance of Poverty
No matter how we compute poverty, millions of Americans are poor.
How we define poverty has serious consequences for people’s lives.
Poverty lies at the root of many other social problems.
The Significance of Poverty

8. Existence of poverty contradicts the ideal American vision of success
Structural inequality
the inequality built into our economic and social institutions
Social Inequality

9. Social Inequality Distribution of income and wealth
Inequality of income
Inequality of wealth
Wealth: how much property, savings, investments, and economic assets people own
Social Inequality

10. Wealth and power Social Inequality Vast wealth brings vast power.
Because the rich can hire top financial advisors, attorneys, and lobbyists, they perpetuate their advantages.
Social Inequality

11. Social Inequality The impact of poverty
People’s economic circumstances envelop them, affecting profoundly every aspect of their lives
Housing and mortgages
Education
Jobs
Criminal justice
In short: quality of life
Social Inequality

12. Symbolic Interactionism
The relativity of poverty
To fully understand poverty we must focus on what poverty means to people.
Poverty is relative: what poverty is differs from group to group.
Meanings of poverty change as social conditions change
Symbolic Interactionism

13. Conflict Theory The cause of social inequality
Basic struggle over limited resources
A general theory of social class
Karl Marx (1818–1883)
Social class revolves around means of production
Capitalists (bourgeoisie) or workers (proletariat)
False class consciousness: mistaken idea of future prosperity
Class consciousness: realization that there will never be a future prosperity
Conflict Theory

14. Functionalism Income inequality helps society.
Some tasks in society are more important than others.
To attract such talented people, the positions must offer high income and prestige.
Poverty is functional for society.
We need the poor because their poverty contributes to society’s well-being.
Functionalism

15. What We Know about Poverty
Permanence and poverty
Most people who fall below the poverty line do not stay there permanently.
Region
Poor are concentrated in the inner city and rural areas.
Race–ethnicity
Poverty trends can also be predicted using race– ethnicity.
What We Know about Poverty

16. What We Know about Poverty
Children in poverty
Poverty can also be predicted using age as a variable.
The elderly
Their economic situation has improved
The feminization of poverty
Poverty in the United States has become concentrated among women and children.
An underclass
People who earn minimum wage are likely to be poor.
What We Know about Poverty

17. What We Know about Poverty
Social structure
Poverty is structural, built into the social system.
Is there a culture of poverty?
Blatant poverty in the midst of plenty
Culture of Poverty: people who remain poor develop a way of life that traps them in poverty
Some people do adopt a culture of poverty that perpetuates poor lifestyles.
What We Know about Poverty

18. Who Rules America? The power elite interest groups Culture of wealth
small group makes decisions that direct the country and the world
interest groups
compete for social, economic, and political power
Culture of wealth
set of institutions, customs, values, worldviews, family ties, and connections that allow the rich and powerful to perpetuate their privileges
Who Rules America?

19. Social Policy Shifting views of cause and policy Progressive taxation
inside people
outside of people
Progressive taxation
tax rates that progress (increase) with income
Social Policy

20. Public Assistance Programs
Social insurance
Teaching job skills
Welfare
Workfare
Public Assistance Programs

21. Welfare wall Continuing Issue
disincentive to work that comes when the amount that people earn from working is not much more than what they get on welfare
Continuing Issue

22. Continuing Issue Feminization of Poverty
likelihood that those living in single-mother households are likely to live beneath the poverty line
Continuing Issue

23. Possible Solutions Provide jobs Education accounts
Giving the poor more money
The Income Maintenance Experiments
Possible Solutions