You could allow students to decide if this indicates whether the United States is currently in a recession.
The administration of Lyndon Johnson established a wide range of anti-poverty programs in the 1960s. These included programs for education, job training and placement, housing, all as a part of the “War on Poverty.” Within just a few years, many of these programs, and the whole ideology behind them, had come under attack.
At times of recession, the entire economy may be affected. Individuals may become unemployed, forcing them to cut back on expenses. As a result, businesses may close because no customers come and spend money. As a result, more people lose jobs because the businesses they work for are closing. So, as you can see, recessions often have wide-ranging and severe impacts on a society.
Additionally, this theory asserts that sometimes these individuals continue to rely on these practices even after they are no longer useful and have become potentially detrimental. Part of a backlash against the policies implemented by President Johnson, this theory was used to bolster the arguments of welfare critics.
In the 1980s journalist Ken Auletta introduced the concept of the underclass – which promotes a much more negative view of poor people than held previously. Charles Murray reemphasized perverse incentives by arguing that welfare regulations make work and marriage less attractive and rising welfare benefits more attractive.
This slide and the next offer controversial views about the impact of poverty on peoples’ lives. (Asking your class to discuss whether they think these views are relevant should foster an interesting discussion.)
Both were efforts to see how moving families from high-poverty to low-poverty communities might affect parental employment, children’s outcomes, and a host of other factors. The results of these studies were mixed (for various reasons), but the MTO study in particular seemed to show that living in a quieter, less stressful environment did have very positive effects on children.
Absolute poverty considers the cost of living compared to actual income.
This formula estimates food costs for a variety of family types based on U.S. Department of Agriculture recommendations for minimum food requirements and then applies a multiplier. This formulation has not changed since it was introduced, but it has been heavily criticized for not evolving to reflect broad changes in people’s circumstances over the past 40 years.
A more fundamental criticism of trying to establish an absolute measure of poverty is that it is impossible because every measure is relative. Different societies and even different groups within one society define poverty differently – there are different, socially constructed notions of what things in life are absolute necessities. A partial response to this is the use of relative poverty, a measurement of poverty based on a percentage of the median income in a given location. There are three basic theories about how poverty negatively affects children: One focuses on the material deprivations caused by a family’s low socioeconomic status. One focuses on bad parenting practices that are related to a family’s low socioeconomic status. One focuses on differences between poor parents and higher-income parents, but without much faith that anything can be done to affect these differences.
Poverty chapter 10
Have you or a member of your immediate family been laid-of f from work during the past year? 1
Poverty can be defined as a condition of deprivation due to economic circumstances that is severe enough that the individual in this condition cannot live with dignity in his or her society. 2
During a recession, poverty rates may be higher. A recession is a period of economic decline lasting half a year or more. 3
The administration of Lyndon Johnson established a wide range of anti-poverty programs in the 1960s. These included programs for education, job training and placement, housing, all as a part of the “War on Poverty.” Within just a few years, many of these programs, and the whole ideology behind them, had come under attack. 4
At the core of the debate about pover ty in America is thequestion of whether pover ty isthe cause of social ills such as crime, poor educational outcomes, divorce, and so on, or whether it is their result. 5
Almost 60 million people are in the working-poor or underclass Geography-poor cluster in the south, living in rural areas Race/ethnicity-11% of white Americans, 26% of African Americans and Latinos Education-high school dropouts have highest rates. Sociologists have coined the term “feminization of poverty”-the trend by which women represent an increasing share of the poor” (head 53% of poor families). Single-mothers are the most at-risk and divorce raises the chances significantly. Children are more likely to live in poverty than adults or elderly. 1 in 6 white children and 1 in 3 African American and Latino children. 14 million children live in poverty 6
“The big question, 10 years later, is whether things have improved or worsened for those in the bottom third of the income distribution, the people who clean hotel rooms, work in warehouses, wash dishes in restaurants, care for the very young and very old, and keep the shelves stocked in our stores. The short answer is that things have gotten much worse, especially since the economic downturn that began in 2008.” ~Barbara Ehrenreichhttp://www.youtube.com/watch?v=gDgFiW2xtf0 7
Per verse incentives are reward structures that lead to suboptimal outcomes by stimulating counterproductive behavior. For example, some argue that welfare encourages people not to work. Unintended consequences are results of a policy that were not fully anticipated at the time the policy was implemented, particularly outcomes that are counter to the intentions of the policymakers. Heritage Foundation videohttps://www.youtube.com/watch?v=ZCoTo7umZZo 8
The culture of pover ty theor y argues that poor people adopt certain practices, which differ from those of middle-class, “mainstream” society, in order to adapt and survive in difficult economic circumstanceshttps://www.youtube.com/watch?v=GO5b_FwR5HU&feature=related 9
Check cashers: Charge high fees— up to 5 percent of the check amount for example it would cost you 12.50 to cash a $250 check; and usually it costs $3 for a money order. Average fees for users are more than $800 a year! 10
Pay day loans are usually made to people who are desperate, need money right away, and plan to pay it back with their next paycheck. Lenders usually offer amounts up to $500 for short periods of time such as one to four weeks. Loan fees range between $15 and $70 , depending on the loan amount. If you don’t pay off the loan within the agreed amount of time, the lender renews the loan and adds on late fees. Over 90% of payday borrowers end up paying more than the initial fees. The Center for Responsible Lending found that the average payday borrower ends up paying over $700 for a $325 loan! Also, payday loans arent considered real loans , so no matter when you pay them off, they dont help you build a credit history. Without a credit history it is difficult to get a loan from a bank, get a credit card, or buy a car. 11
The average rent-to-own customer spent $1,200 in 2009. That means that typical customer, because she doesn’t have a credit card, paid an extra $700 above and beyond the normal cost of an item. But ours is a country where so many middle-class people proved willing to mortgage the future for a new bathroom or a large flat-screen TV. The point is that for the security guard making $25,000 a year or the home health aide making $20,000, they’re typically paying two and a half times as much for that same item. 12
For all those scraping by on less than $20,000 a year —the assistant manager at a fast-food restaurant, say, or a Wal-Mart associate or a home-health-care worker —that works out to annual poverty tax of at least 10 percent. 13
“The people peddling poverty products have figured out thethere is a strain of Americans who are the financialequivalent of drug addicts. They will pay any price, fee, orinterest rate as long as they can get an immediate fix. Theydont care about tomorrow. They just want money today.” Gary Rivlin ~ Broke USA 14
There are credit card companies catering to those with a credit score below 600—but those people will pay dearly for the privilege of carrying that plastic in their pocket. For instance, there’s the First Premier credit card, which charges both an annual fee ($45) and a $6.50 monthly fee for a card carr ying an APR of 49.9 percent on carried balances. 15
More typically, the working poor carry a prepaid debit card. That of ten entails an initial activation fee of up to $30 and also a fee of between $10 and $20 that first time to put money on the card. Direct deposit is typically free but otherwise you pay to load money on a card just as you pay each time you withdraw cash at an ATM. Many prepaid debit cards charge a monthly fee of between $3 and $10, yet they still charge a few dollars extra if a customer wants a monthly statement—and they charge for customer- service calls and balance inquiries. 16
Those with lousy credit also pay more for a car loan —much more. These days those with good credit can get a car loan carrying an annual interest rate of around 5 percent. The subprime customer, though, is hit with rates four or five times that amount, paying interest rates of 18 or 20 or 25 percent. 17
Auto insurance is also more expensive if you live in a lower-income community, according to a 2007 study by the Brookings Institution. At least with a car you can shop at the better supermarkets and discount stores like Walmart.Otherwise, you’re hauling groceries on a bus, paying cab fare, or paying extra at the corner grocer thatcharges $3.99 for the gallon of milk you can get for $2.99 at Walmart. 18
While it may be true that reliance on welfare generates a sense of helplessness and dependency in some people, there are also structural reasons why it can be difficult to transition from welfare to work.PERVERSE INCENTIVES:Rising benefits make not working attractive.Makes marriage unattractive. 19
Sociologist William Julius Wilson turned the focus from welfare to factors such as deindustrialization, globalization, suburbanization, and discrimination as causes of urban poverty. In the past 20 to 30 years, policies to combat poverty have focused on encouraging work and offering benefits that directly serve children. 20
In her book What Money Can’t Buy, sociologist Susan Mayer writes that she found very little evidence to support the widely held belief that parental income has a significant effect on children’s outcomes. What do you think? 21
In The Bell Curve, Charles Murray and Richard Hernstein argued that it’s not poverty or education or parenting that ultimately has the most impact on children’s outcomes, but simply genes. What do you think? https://www.youtube.com/watch? v=ZCoTo7umZZohttps://www.youtube.com/watch?v=- S9Qv29fOLY&feature=related 22
James Rosenbaum’s study of the Gautreaux Assisted Living Program in Chicago and the Moving to Opportunity (MTO) study began in 1994. designed to see if moving to less impoverished communities might affect quality of life. MTO study in particular seemed to show that living in a quieter, less stressful environment did have very positive effects on children 23
Absolute poverty is the point at which a household’s income falls below the necessary level to purchase food to physically sustain its members. 24
The official poverty line in the United States is calculated using a formula developed in the 1960s by Mollie Orshansky. estimates food costs for minimum food requirements to determine whether a family can “afford” to survive can be problematic, as the cost of food has decreased but the cost of living (rent, utilities, etc.) have increased 25
Relative poverty is a measurement of poverty based on a percentage of the median income in a given location. The United States has a much broader range of inequality (our rich are much richer than our poor) than any other developed nation in the world, as well as higher poverty rates (a larger percentage of the population is below the poverty line). 26
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