Facing Economic Challenges Poverty Facing Economic Challenges

Key Questions

Poverty & Income distribution What Is Poverty? The Poverty Threshold People are considered in poverty if income falls below poverty threshold Also called the poverty line Based on costs of nutritious food, necessities differs by size of household adjusted annually A state or condition in which a person or community lacks the financial resources and essentials to enjoy a minimum standard of life and well-being that's considered acceptable in society.

What Is Poverty? The Poverty Rate Poverty rate—percent of people in households below poverty threshold based on population as a whole Poverty does not hit all sectors of society equally. Most at risk: Children, minorities; inner-city, rural, and single–mother families

Poverty Rates for Children 1999-2010

The Problem of Poverty Factors Affecting Poverty Education—the higher the level of education, the higher the income Discrimination—against minorities, women Includes wage discrimination, occupational segregation Demographic trends—single-parent families have more economic problems Change from manufacturing to service jobs has resulted in lower wages for low-skilled workers

Income Distribution Income distribution—how income is divided among people in a nation Income inequality—unequal distribution of income; some always exists

Antipoverty Programs Programs for Low-Income Households Supplemental Security Income (SSI) Provides cash to meet basic needs in food, clothing, and shelter for disabled people Supplemental Nutrition Assistance Program (SNAP), formerly the Federal Food Stamp Program Created to provide nutritious food Medicaid Provides medical care Earned-income tax credit (EITC) refunds taxes deducted from paychecks ABC’s TANF, MTO, LIHEAP, CHIP, HOPWA, etc. TANF: Temporary Assistance for Needy Families LIHEAP: Low Income Home Energy Assistance Program CHIP: Children’s Health Insurance Program LIFELINE: Provides phone and discounted phone service to low income individuals EITC: Earned Income Tax Credit MTO: Moving to Opportunity, provides housing vouchers to move out of projects HOPWA: Housing Assistance for People With AIDS

Median Household income