Poverty

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Who is poor?

Two definitions of poverty:

The poor are those who do not have the resources to meet the basic needs for healthy living.  They do not have the income to provide the food, shelter and clothing needed to preserve health.  The US Census Bureau calculated that a family of four in 2005 needed $19,971 to meet basic needs.  Using this "Absolute Poverty" definition about 12.5 % of such families were "poor" in 2005.

Back in the early 1960s President Lyndon Baines Johnson declared a "war on poverty" and implemented a number of antipoverty measures -- from food stamps to job training programs.  Using this Absolute Poverty definition, is there any evidence that this "war" had an impact on the amount of poverty in the US?

Has much happened since the end of the 1960s to reduce poverty?

Can you think of ways to reduce the number of poor in America?

In fact, would it be that expensive  -- -- using this definition of poverty -- to totally eliminate poverty from American society?

Extra Material:  Should we revise how the poverty line is calculated?  Read about the history of measuring poverty.

 2.  Relative Poverty
 

Another way to think about the poor is in terms of relative deprivation.  The poor are those with significantly less access to income and wealth than others in their society.  This is a "Relative Poverty" definition.  Realistically, do you think that a family of four with an income of $20,615 in 2006, about $1 above the "poverty line" for that year, did not feel poor?  Where they not likely to feel "relatively deprived" when they contrasted their situtation to that of the "average" American family?

Examine the "Poverty Line as % of Median Income" data above.  In 2005 a family of four just at the poverty line had an income of $19,971.  This was 28.69% of the median income for all families of four.  Back in 1959 a poor family just at the poverty line had an income that was 42.64% of the median.  Do you think that an "officially" poor family today might actually feel "poorer" (more relatively deprived) than the poor family back in 1959?  They have relatively less income than the average American family.

How would one "measure" the amount of poverty using this "Relative Poverty" definition?

Answer:  You can simple look at what has been happening to income distribution over time.  If the distribution has been getting more "equal," then the amount of relative deprivation -- or "poverty" according to this definition -- is being reduced.  If the distribution is getting more "unequal," then relative deprivation (poverty) is increasing.  Take a look at the income boundary data for the US to see whether poverty is increasing or decreasing according to this relative definition.  Has it been taking more and more income to enter the higher income groups?  Are those in the botton income groups then likely to feel more and more relatively deprived?

   
 

It is also possible to produce a very specific "number of poor people" estimate using this "Relative Poverty" definition.  We could define a poor person to be anyone whose income is less than half the median income, arguing that such a percentage would produce feelings of relative deprivation.  Using that measure we can then calculate the percent of the population who is poor:
 
 

Percent of Population Whose Income is Less Than 1/2 the Median Income

Year
	Percent
1973	18.9%
1979	20.1%
1989	22.1%
1990	21.8%
1991	22.3%
1992	22.8%
1993	22.8%
1994	22.6%
1995	22.2%
1996	22.3%
Source: U.S. Bureau of the Census, published and unpublished data.

Well, is poverty being reduced?

Why is this estimate of the number of poor so much higher than the official estimate?

Which estimate is more "accurate"?

What would we have to do to reduce the amount of relative deprivation?  How costly would it be to insure that everyone's income would be at least 1/2 the median income?

What are the chances of this happening?