P OVERTY

H ISTORY Poverty in the U.S. was at its worst during the Great Depression Population suffered widespread hardship Millions of Americans were homeless and hungry Unemployment rate was at 25%

T HE N EW D EAL President Franklin passed a series of laws known as the New Deal to help America recover from the Great Depression Included massive job programs and other programs to help Americans who had suffered great losses from the depression

N EW D EAL P ROGRAMS I. Social Security Gives assistance to low-income, elderly Americans Financed by equal contributions from employers and employees All citizens over age 65 are eligible to receive benefits

N EW D EAL PROGRAMS II. Unemployment Insurance Allowed unemployed men and women to continue to buy products and services Provided temporary financial help to workers who do not have jobs but are looking for work Most states provided 26 weeks worth of benefits

N EW DEAL PROGRAMS III. Aid to Families with Dependent Children Offered direct cash payments to low-income families with children under 18 whose parent was deceased, absent, or unemployed Most payments went to single mothers Program was most often associated with the term “welfare”

N EW DEAL PROGRAMS Public Housing Aimed at eliminating the slums and building affordable housing Congress created the Section 8 program to provide public housing for those in need The government pays part of the rent for low-income tenants

J OHNSON ’ S WAR ON POVERTY Johnson declared that no society could be great with poverty in its midst He began implementing social programs designed to move people up the economic ladder through vocational education and job training His efforts also included programs to help poor and older Americans get enough food and adequate health care

J OHNSON ’ S PROGRAMS The Food Stamp Program Started in 1964 Gives food credits to needy individuals and families on the basis of their income Families must meet certain requirements in order to be eligible Currently no time limit exists for how long a person can receive assistance At the end of 2005, about 27 million Americans received food stamps each month

Medicaid Provides free or subsidized medical care for low-income Americans of any age Medicaid is a state administered program and each state sets its own guidelines regarding eligibility and services A person must meet certain requirements to be eligible Covered 47 million people in 2004

Medicare Pays health benefits Medicare is a Health Insurance Program for people 65 years of age and older, some disabled people under 65 years of age A fee-for-service health plan that lets you go to any doctor, hospital, or other health care supplier who accepts Medicare Patient must pay deductible Covers nearly 40 million people In 2006 recipients become eligible for prescription drug benefits

Additional Federal and State Efforts The government has other programs to help low-income Americans 1. Earned Tax Credit- a refundable tax credit that supplements the wages of low-income working families and individuals by reducing the amount of taxes they owe

2. Minimum Wage -the lowest hourly rate that employers may legally pay to employees or workers Many supporters of the minimum wage assert that it is a matter of ethics and social justice that helps reduce exploitation and ensures workers can afford what are considered to be basic necessities States can also set a rate higher than the federal minimum wage Chart shows the federal minimum wage rate in recent years

Education Programs Head Start- program provides grants to local public and private agencies to provide comprehensive child development services to economically disadvantaged children and families Children from birth to age five from families with income below the poverty line are eligible About 900,000 children nation wide participate

Free and Reduced Lunch Provides nutritionally balanced, low-cost or free lunches to children each school day The program was established under the National School Lunch Act, signed by President Harry Truman in 1946 Participation in the program is based on family income A local school gets reimbursement from the federal program for every student who participates.

Current Issues Do not increase number of hours Increasing the number of work hours will hurt single mothers who cannot afford adequate child care Believe the government should spend more money on skills training and that will help people find better jobs 1. Work and Welfare Debate over how many hours a person on welfare should have to work (currently 30 hours per week) Increase number of work hours this will help people become self-sufficient more quickly State with more rigid work requirements have a low number of welfare cases Some hours can also be devoted to job training to help recipients find better paying jobs

2. Should the government fund faith- based service providers to help the poor? YES These groups are well positioned to make and immediate and positive impact on their community Operate more efficiently and with less waste than government programs Groups would be forbidden from trying to convert people to a certain religion thus prevents a conflict between the separation of church and state NO Argue taxpayers should not be forced to fund organizations whose religious views they find objectionable Funding these faith based programs blurs the line between the separation of church and state Government, not religious organizations, should be primarily responsible for helping the poor

Helping People in Poverty Today Many Americans support some government effort to feed and clothe people and help them find jobs, but disagree on how programs should be structured A wide range of social programs aimed at helping reduce poverty collectively take up as much as half of the federal budget each year Poverty fighting measures are in place to ensure that poor people have the basic necessities such as food, medical care, shelter, and education

Who are the poor in America today? Any U.S. family of four whose annual income is less than $19,971 is considered to be living in poverty In 2006 the national poverty rate was 12.3% This rate is higher for minorities African Americans 24.7% Hispanics 21.9% American Indians 25.1% Children 17.8%

The number of people living below the poverty line is 30% higher in rural areas than it is in cities Nearly 36 million Americans lived in poverty in 2003 In 2003, 3.1 million married couples lived in poverty Poverty in the United States is far higher than in many other developed nations. Many families fall into poverty because of a job loss or other dramatic change in living circumstances Statistics

N ATIONAL U NEMPLOYMENT RATE J UNE 2006