BELL RINGER 05.11.2015Write complete question and answer on your Bell Ringer form.

What words do you associate with poverty? Be ready to discuss these terms in class.

ECONOMICSMay 11, 2015

Chapter 13: Economic ChallengesSection 13.3: Poverty

DEFINING THE POOR13.3

The government defines a family as a group of two or more people related by birth, marriage or adoption who live in the same housing unit.

DEFINING THE POOR13.3

The government defines a household as all the people who live in the same housing unit, regardless of how they are related.

DEFINING THE POOR13.3

For purpose of defining the poverty threshold, the government treats both families and households the same.

The threshold, or poverty line, varies with the number or people in the house.

DEFINING THE POOR13.3

The poverty rate measures the percentage of people who live below the poverty threshold.

Indicators that strongly predict poverty: race and ethnic origin, type of family, age, and residence.

CAUSES OF POVERTY13.3

Generally speaking, poverty and lack of income go hand in hand.

Lack of education limits the income one might earn.

CAUSES OF POVERTY13.3

Location figures into the amount of income one earns. Inner city and rural areas typically earn less than suburban areas.

CAUSES OF POVERTY13.3

Racial and gender discrimination factors into levels of income. Whites earn more than minorities. Men earn more than women. Part of the difference stems from discrimination.

CAUSES OF POVERTY13.3

Economic shifts account for hirings and layoffs of those without education and/or skills.

Shifts in family structures, such as divorce and single-parent households, also contribute to increasing poverty.

INCOME DISTRIBUTION13.3

The US has millions of poor people AND one of the highest per capita GDPs in the world.

INCOME DISTRIBUTION13.3

Equality in income distribution would mean that the cumulative percentage of income for each “quintile” (or 20% of the population) would equal the percentage of that quintile. Check the chart on page 348.

INCOME DISTRIBUTION13.3

The reality of income distribution in the US produces a graph that is in a concave curve shape (curves down) which means the majority of wealth is possessed by the top 20%.

INCOME DISTRIBUTION13.3

Two key factors that account for such an income gap:

Differences in skills and educationLarge inheritances

INCOME DISTRIBUTION13.3

When politicians call for a “redistribution of wealth,” most are wanting to close the income gap by increasing the general level of skills and education of Americans.

ANTIPOVERTY POLICIES13.3

Money from antipoverty programs have traditionally gone to:

cash assistance (welfare)educationmedical benefits (Medicaid)noncash benefits (food stamps, subsidized housing)

ANTIPOVERTY POLICIES13.3

Enterprise zones are areas that encourage the development of businesses through tax abatements.

Employment assistance comes in the form of training and mandatory minimum wages.

ANTIPOVERTY POLICIES13.3

Welfare reform has occurred since Clinton’s administration.

Instead of cash assistance to needy families, the federal government provides block grants to states.

ANTIPOVERTY POLICIES13.3

States now must provide programs to move poor adults from welfare dependence to employment.

Temporary Assistance for Needy Families has a 5-year limit for benefits.

ANTIPOVERTY POLICIES13.3

The changes call for a shift from welfare to workfare, a program that requires work for temporary assistance.

CHECK QUESTION 13.3Write complete question and answer on your Bell Ringer form.

Explain the difference between how antipoverty policies dealt with poverty and how they are beginning to deal with it.