Trends in Inequality
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Trends in Inequality
Lecture 3September 12, 2012
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The Government Definition
• 1964 Definition. Based on 1955 data.• Families spend 1/3 income on food.
Thresholds set at 3 times the cost of the cheapest nutritionally sound food plan for a family of four.
• In 1969, the thresholds stay the same, but increases tied to the CPI (Includes goods other than food.)
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Persons infamily/household Poverty guideline
1 $11,1702 15,1303 19,0904 23,0505 27,0106 30,9707 34,9308 38,890
For families/households with more than 8 persons,add $3,960 for each additional person.
2012 Poverty Guidelines for the48 Contiguous States and the District of Columbia
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Alternative Definitions
• Medical Costs• Costs Associated with Working• After tax, not before tax, income• Include noncash benefits (food stamps,
housing subsidies)• Take into account costs of clothing, shelter
and utilities.• Geographic variation.
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Current Poverty
• Figures released today, predicted to show that it is highest in fifty years.
• All alternative measures of poverty show higher percentages of the population in poverty.
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Europe vs. United States
• Europe: Poverty is measured at 50% of the median income.
• In the US median income in 2006-2010 was $51,914. Poverty line would be $25, 957.
• The official US poverty line in US in 2000 was 32% of median income. In 1960 the poverty line was 48% of median income.
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POOR PEOPLE IN RICH NATIONS: United States Compared to European Nations
• Luxembourg Income Study, directed by Timothy Smeeding, University of Wisconsin – the best, longest running comparative research
• “Poor People in Rich Nations: The United States in Comparative Perspective.” (will post a link on course website)
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Data are from 2007-2009
Child Poverty RateUNICEF
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Why does US have such high poverty?
• Low wage work. “The working poor”• Cash transfers and benefits in the US are
lower than in most other advanced countries.
• Cash transfers and benefits in the US are targeted at the elderly far more than at families and children.
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Incarceration
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Growth of incarceration
• Not related to probability of arrest, which has been more or less constant for 30 years.
• Related to harsher sentencing, and mandatory sentencing, especially for drug offenses.
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Source: Western and Pettit
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Scope of the Problem• There are currently 16.1 million current or
former felons, 7.5% of the population.• (There were 15.7 million unemployed
people in 2009).• 1/3 of all African American adult males are
current or former felons.• 1% of all Americans are in prison at any
one time, another 2% are on parole or probation.
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Scope of the Problem• Lifetime likelihood of going to prison is
60% for African American male without at high school degree.
• Twice as many African American men under age 40 have a prison record as have a college degree.
• 1 in 40 adults, (5.4 million people) are ineligible to vote because of a felony conviction.
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How we measure race and ethnicity
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What is the race and ethnic distribution in the US?
• White• Black• Hispanic• Asian• American Indian
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Race and Ethnicity of USGSS Actual
White 57.7 69
Black 28.4 13
Hispanic 21.4 13
Asian 15.0 4
Amind 11.5 1
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2010 Census Race Question
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2010 Hispanic Origin Question
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