Poverty in the United States - Research Paper Example

Poverty in the United s Introduction Poverty in the United s has turned out to be more widespread, severe, and intense. Even though the general rate of poverty was roughly 12% in 1970 and 2000, there has been a growth in the segment of the poor population which resides in vicinities with other poor people (Aliprantis & Zenker 2011, 1). Income and employment outcomes for most people are largely influenced not just by individual aspects such as job experiences and educational degree, but also by the privileges and resources of the sector they belong to, such as families, communities, and countries. Individuals born in the United States usually have better prospects and access to resources than people born in poor societies (Chappell 2010, 45). Thus, they benefit from a better quality of life and bigger earnings. Similarly, impoverished children who reside and go to school in communities with more affluent families will likely have greater opportunities than children who reside in communities where they intermingle only with other impoverished children (Aliprantis & Zenker 2011, 1). This essay tries to discuss the current condition of poverty in the United States by taking into account several factors, particularly the impact of welfare programs on poverty. The American Dilemma The Census Bureau in the United States specifies a group of income thresholds that rely on household composition and size, and members of a household are regarded poor if the overall income of their household is below the correct threshold (Iceland 2003, 20). However, it is important to point out that this description computes income before transfers and taxes, and thus there is much disagreement about whether it might be more useful for future assessments to classify poverty as regards to consumption (p. 20). Rates of poverty have fluctuated between 11% and 15% of the population over the recent decades (Aliprantis & Zenker 2011, 1). Statistics from 2010 exhibit a noticeable increase in the rate of poverty during the most recent economic depression (Bishaw 2011, 2-3). Even though the rise was distributed across racial groups, the eventual patterns in poverty differ when divided by race. Figure 1. Percentage of the People Living in Poverty Areas by State: 2006-2010 *graph taken from Bishaw (2011, 3) Prevalence of poverty among the white population have somewhat remained the same over the recent decades. Prevalence of poverty among the Asian population dropped in the latter part of the 1990s and has been the same as that of whites over the recent decades. For instance, the rate of poverty for the Asian population in 2010 was 12% (U.S. Census Bureau 2010, 694). Poverty rates for the Hispanic and Black populations have differed; although the prevalence of poverty for these populations dropped significantly all over the 1990s, they are situated at a noticeably higher point than other populations (U.S. Census Bureau 2010, 694). As revealing as figures of individual-level poverty are for identifying the earnings accessible to individual members of a household, they fail to generate data about the resources accessible to individuals through their community. This is significant since it is not difficult to think of numerous explanations that the poverty in a specific community might be similarly significant to the poverty of an individual’s household (Aliprantis & Zenker 2011, 2). An impoverished household residing in an affluent community could have greater opportunities for it might have access to more quality education, more accurate and updated information about employment availability, or better access to public services than an impoverished family residing in a poor community. Figure 2. Distribution of People by Race and Ethnicity and by Poverty Level of Tracts: 2010 *taken from Bishaw (2011, 7) The United States put into effect in the 1960s one of the most aggressive social policy programs of the 20th century by declaring an all-out ‘war’ on poverty (Chappell 2010, 3). Even though policy attempts related to this program assumed various shapes, one of the most debated areas was the drastic development of public assistance agenda for the health sector of the poor population. The expansion of welfare initiatives throughout this period was expressed in the growth of three major initiatives that by the latter part of the 1960s eventually include the standard ‘benefit package’ to which majority of impoverished households with single parents were qualified—Medicaid, Food Stamps, Aid to Families with Dependent Children (AFDC) (Currie 2006, 12). Alongside the first-time expansion in welfare programs, this growth in public assistance gave rise to hopes of a substantial decrease in the poverty rate of the United States; according to Fording and Berry (2007, 38) as is widely recognized, although poverty did dropped considerably at some point in the 1960s, the prevalence of poverty steadied by the 1970s in double digit figures. The United States, after much disagreements and controversies, embarked on a new phase of public assistance in 1996 with the endorsement of the Personal Responsibility and Work Opportunity Reconciliation Act (Tanner 2003, 179). The main idea behind this policy was that the current welfare system, partially brought about by the large-scale growth of benefits, services, and initiatives related to the War on Poverty of the 1960s, was unsuccessful in mitigating poverty. A great deal of the denunciation was aimed at the AFDC initiative, which was the biggest financial assistance initiative for the healthy sector of the poor population until 1996 (Patterson 2000, 225). According to Patterson (2000, 225), 0pponents of AFDC argued that alongside in-kind services given by the Medicaid and Food Stamp programs, AFDC had later on weaken employment motivations. As a result, it was claimed, AFDC was not merely unsuccessful in alleviating poverty; it could even have contributed to the worsening of poverty rates by pushing poor people to prefer welfare over employment. On the other hand, others presented another point of view stating that the expansion of welfare programs substantially improved the quality of life of the poor population, and that outcomes of employment discouragements were comparatively insubstantial, if they were present at all (Sen 1997, 36-37). Recognizing the reality that poverty did not weaken to the extent that the planners of the War on Poverty had expected, they claimed that this was due to a mixture of factors, such as the inability of public assistance services and wages to match inflation, the weakening of the manufacturing division in the economy, and demographic shifts encouraging an increase in financially at risk single-parent households (Kanbur 2006, 170-172). As stated in this point of view, public assistance mitigated poverty, even though the scale of this drop has been cloaked by other factors. Hence, there are two basic theories about the historical effect of growth of public assistance programs for poverty. According to Sen (1997, 37), the theory of income enhancement declares that welfare growth reduced poverty by adding to the incomes of impoverished individuals. The theory of work disincentive states that welfare programs worsened poverty by encouraging poor people to rely more on welfare than on employment. Almost all intellectuals joining the discussion about the effect of welfare on poverty have believed that welfare probably has both work disincentive and income enhancement outcomes; in their opinion, the debate is focused on which of the two outcomes is greater, and thus, whether the net outcome of the expansion of public assistance programs, considering both outcomes, was to worsen or mitigate poverty (Fording & Berry 2007, 37). Over the recent decades, much empirical research on the impacts of welfare on poverty has been carried out. Most of these studies have depended on the rate of poverty to assess the magnitude of poverty; poverty rate is identified as “the percentage of individuals with income less than the ‘poverty threshold’” (Fording & Berry 2007, 37). However, the poverty rate has major defects as a gauge of the scale of poverty, which restricts the capacity of researchers to evaluate the effect of welfare on poverty applying the rate of poverty as a marker. Primarily, the poverty rate leaves out in-kind support, mostly medical aid and food, when computing income to verify if a person is poor. In-kind services embody a wide-ranging and upward unit of assistance to the impoverished population in the United States, and obviously endow financial support that betters the lives of poor people (Kanbur 2006, 13). As a result, according to Kanbur (2006, 137), in-kind support must be covered in an evaluation of the effect of welfare on the scale of poverty. Moreover, the dependence of the poverty rate on a threshold implies that any welfare services that do not shove a poor individual on top of the threshold are not recognized for reinforcing any decline in poverty, in spite of the fact that these services undeniably mitigate the extent of poverty. Numerous studies have been conducted to determine the effect of public assistance programs on the prevalence of poverty. One strategy has been to weigh pre-welfare poverty rates against post-welfare poverty rates. Almost all of these studies continue in two phases (Fording & Berry 2007, 38): First, the researcher calculates the poverty rate using income data that does not include welfare benefits. Then, the poverty rate is recomputed taking into account public assistance transfers, and the prewelfare and postwelfare rates are compared. As reported by Danziger and colleagues (1981), earlier versions of such studies discovered that welfare initiatives decreased the rate of poverty (as cited in Fording & Berry 2007, 38). The projected poverty decline fluctuated from as low as 10% to as high as 78%, relying on the time period studied, the kinds of transfers examined, and the population under consideration (p. 38). More current research using this method found out the same effects, even though the projected reduction impacts of welfare initiatives appear to have weakened by the 1980s (Partridge & Rickman 2006, 8). In spite of the constancy of these reports, this strategy of evaluating the effect of welfare has been denounced as discarding the behavioral impacts of public assistance programs. In a nutshell, in the computation of pre-welfare income it is presupposed that levels of income would be precisely similar if welfare was absent. However, numerous studies show that this is not true, and that in truth, a lot of poor individuals would prefer to seek employment if public assistance were absent (Besharov 2004, 107-108). According to Fording and Berry (2007, 38-39), due to the possibility of this behavioral impact, evaluations of pre-welfare and post-welfare poverty rates perhaps overstate the poverty alleviation effects of welfare benefits. One weakness of the studies exploring the connection between levels of welfare programs and poverty rates is that they use only one welfare benefit factor to approach two different outcomes—work disincentive and income enhancement—and thus provide no means for segregating a potential income improvement, and thus, poverty mitigating, impact of welfare from a possible work disincentive, and hence, poverty worsening, outcome (Schiller 2004, 269). If a researcher discovers insignificant connection between the level of welfare benefit and the rate of poverty, this may suggest that there is neither a significant work disincentive outcome nor a significant income enhancement outcome (Schiller 2004, 269). However, it could also imply that both these outcomes are influential, but in combination, they contradict each other to produce an insignificant correlation between poverty rate and welfare benefits. Hence, according to Besharov (2004, 109), even though the connection between poverty rates and levels of welfare benefits exactly manifested the net effect of welfare programs on the scale of poverty, projecting this correlation would not explain the causal factors leading to this net effect. Nevertheless, as argued by Schiller (2009, 270-272), some current studies show that issue is more severe. As shown by some researchers, earlier research projecting the impact of a particular welfare benefit factor on the prevalence of poverty has not just failed to present independent assessments of work disincentive and income enhancement impacts; it has generated subjective approximations of the net impact of welfare. Conclusions It has been discussed that there is a significant difference in community poverty levels in the United States. And it has been mentioned that the poverty condition or race of a person is considerably foretelling of the community poverty level they will encounter. The issue of poverty in the United States raises much public and individual concern. Moreover, this issue might encourage people to think if today’s poverty distribution across communities functions to restrict the general affluence of the American nations. The issue of poverty requires additional studies so that people can have a more accurate and better knowledge of the repercussions of housing segregation for the nation, particularly considering the intensification in concentrated poverty. On the other hand, most probably, any welfare services that improve the capacity of beneficiaries to meet their financial requirements and enhance their standard of living should be taken into account in an evaluation of the net impact of a minor expansion in welfare services on poverty levels. The inability of the poverty rate to allow for the importance of in-kind support to the impoverished population forces any assumption about the net impact of welfare services on the prevalence of poverty miscalculates the capacity of welfare benefits to reduce the actual poverty rate when a large percentage of welfare services are in-kind. Works Cited Aliprantis, Dionissi & Mary Zenker. “Concentrated Poverty”, Federal Reserve Bank of Cleveland 2011.26 (2011): 1+ Besharov, Douglas. Family and Child Well-being after Welfare Reform. New Jersey: Transaction Publishers, 2004. Print. Bishaw, Alemayehu. “Areas with Concentrated Poverty: 2006-2010”, American Community Survey Briefs 10.17 (2011): 1-10. Chappell, Marisa. The War on Welfare: Family, Poverty, and Politics in Modern America. Philadelphia: University of Pennsylvania Press, 2010. Print. Currie, Janet. The Invisible Safety Net: Protecting the Nation’s Poor Children and Families. Princeton, NJ: Princeton University Press, 2006. Print. Fording, Richard & William Berry. “The Historical Impact of Welfare Programs on Poverty: Evidence from the American States”, Policy Studies Journal 35.1 (2007): 37+ Iceland, John. Poverty in America: A Handbook. Berkeley, CA: University of California Press, 2003.Print. Kanbur, Ravi. Poverty and Inequality. Stanford, CA: Stanford University Press, 2006. Print. Partridge, Mark & Dan Rickman. The Geography of American Poverty: Is There a Need for Place-Based Policies? Kalamazoo, MI: W.E. Upjohn Institute for Employment Research, 2006. Print. Patterson, James. America’s Struggle Against Poverty in the Twentieth Century. New York: Harvard University Press, 2000. Print. Schiller, Bradley. The economics of poverty and discrimination. Michigan: Pearson Prentice Hall, 2004. Print. Sen, Amartya. Choice, Welfare and Measurement. New York: Harvard University Press, 1997. Print. Tanner, Michael. The Poverty of Welfare: Helping Others in Civil Society. Washington, DC: Cato Institute, 2003. Print. U.S. Census Bureau. Statistical Abstract of the United States, Volume 129, Part 2010. Washington, DC: Purdue University, 2010. Print. Read More