According to the Census Bureau, individuals, families, or households are living in poverty if their total incomes fall below the designated income levels

Poverty threshold: or poverty level, is the lowest income – as determined by the government – that a family or household of a certain size or composition needs to maintain a basic standard of living –$17,603

Poverty rate: is the percentage of individuals or families in the total population, or a subset of the population, that are living in poverty Both the number and percentage of Americans living in poverty have dropped in the last several years

Jacob Riis – wrote book called, How the Other Half Lives, 1890 –Is about widening gap between the rich and poor

Factors that contribute to differences in income –People come from different economic & social backgrounds –Individual’s income is determined by the market value of what the goods and services that person has to offer Basketball player versus soccer player

MEASURING INCOME INEQUALITY –Income Gap – is the amount of income inequality in the nation –Lorenz Curve – measures the amount of inequality in the distribution of income –Gini Index – another statistical measure of income inequality

LIMITATIONS OF INCOME DISTRIBUTION 1.Definition of income is to limited 2.Most measures of income distribution do not differentiate among families or households of different sizes, ages, or number of wage earners

“Are the rich getting richer and the poor getting poorer?”

MAIN CAUSES OF WIDENING DISPARITY IN INCOME 1.Changes in households 2.Changes in labor market 3.Rapid changes in technology 4.Growth of a global economy

CHANGES IN HOUSEHOLDS –Married couples living with their children have made up a large percentage of the wealthier households in the United States –Single-parent and single- person households tend to have lower incomes

CHANGES IN LABOR MARKET –Downsizing, which causes increased unemployment and resulted in may workers settling for lower-paying jobs –Decline in real-value of minimum wage because of inflation –Increased use of temporary workers – get paid less –Labor union membership decreased

CHANGES IN TECHNOLOGY –Drop in demand for lower- skilled workers –Need for education now more important than ever

GROWTH OF A GLOBAL ECONOMY –US companies moving jobs overseas where laborers are paid less

Programs that increase access to educational resources and provide training for low-skilled workers Increase taxes or the wealthy and spending more money on programs that help low- income groups Raise minimum wage Not allow companies building plants overseas where labor is cheaper