Economics Essay Sample: United States Poverty

In the United States, there are two competing narratives about poverty. There those who believe that it is not that bad while others have a belief that it is intensive. These notions are based on the fact that the standards set by the country regarding this issue are high.According to the Census Bureau of the United States, poverty is measured based on the individual and family incomes as derived from the recommendations of the 1995 Economic Report. For each individual beyond 15 years of age, the Annual Social and Economic Supplement questions the earnings of the family as well as the individuals on yearly basis.

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The preceding income calculations are derived from various sources such as the annual earnings, social security, disability benefits, workers compensation, interests, dividends, special social benefits, unemployment compensation as well as the veterans compensation (Fay et al.,2000). It has to be recognized that even if poverty is calculated depending on the income received by individuals or families in an year, other factors inclusive of demographic attributes such as race, age, household characteristics and labor force status are considered in this measure (Census Bureau, 2016). However, the household income do not factor in the amount received by members who were not part of specific family in the preceding year. To assess the changes in the earnings and incomes over time, the cost of living is adjusted to reflect the actual poverty levels in the United States.

Based on the survey conducted by the Census Bureau in 2015, all the households in the country experienced a decline in real incomes between 2014 and 2015. The median family incomes increased by 5.1% in the northwestern region and 4.9% in the north eastern region of the United States. This decline reflects that the rate of poverty decreased in the country during these years. Regardless of this improvement, the income inequality as measured on the Gini Index increased between 1999 and 2015. This increase was facilitated by a decline in the incomes between the 10th and 50th percentiles by 9.9% and 2.4% respectively. On the other hand, there was an increase in the incomes in the 90th percentile by 5.7%. According to the statement by the Director of the U.S Census Bureau, John Thompson, Households in the lowest quintile had incomes of $22,800 or less in 2015. Households in the second quintile had incomes between $22,801 and $43,511, those in the third quintile had incomes between $43,512 and $72,001, and those in the fourth quintile had incomes between $72,002 and $117,002. Households in the highest quintile had incomes of $117,003 or more (Census Bureau, 2016). If one looks at the incomes and the welfare of those said to live in poverty, they are significant when compared on the developing countries where the poor cannot even earn a quarter of that amount. Also, some of the researchers contend that the severity of poverty in the United States is low because effective income compensation strategies.

Economically, any change and distribution of income between different groups of the population affect the poverty levels in the country. Research studies which find that the rate of poverty in the United States is in dire situation focus on the cost and standards of living (Dayern et al.,2006). About the rate of poverty in the United States, there was a decline in the rate between 2014 and 2015 at 14.5% in the former and 13.5% in the latter. However, the poverty level in 2015 was higher by 1.0% in comparison to 2007. Based on the available data, there was a decrease in the number people considered to be poor in three age groups between 2014 and 2015 (Dayern et al.,2006). For children under the age of eighteen years, the rate dropped to 19.7% from 21.1% in 2014.Also, poverty among people aged between 18 and 64 years decreased by 1.1 points to 12.4% from 13.5% and for the elderly, there was a decline by 1.1% to 8.8% from 10% in 2014. The rate of poverty was affected by the high cost of living as well as healthcare making it difficult to most of the poor people to afford food and medical expenses.

Considering the change in different races, there was a decrease to 9.1% from 10.1% among the non-Hispanics Whites reflecting than 17.8 million people from 19.7 million in 2014 were said to be poor in this group. In 2014, 26.2% of the African-Americans were poor, but this number reduced 24.1% in the following year (ASEC, 2015). Also, the Census Bureau reported that in 2015, 11.4% of the Asians representing 2.1 million people were poor. However, the whites had the lowest number of people being poor at 254695. Focusing on the gender differences, approximately 14.8% of the females were poor in 2015 from 16.1% in 2014 while 12.1% of the males fell under the same class when compared to 13.8% in the previous year. Regardless of the decline in the poverty rate regarding the American and international standards, approximately 75% of this group had very standards of living facilitated by high inflation and unemployment rates.

The poverty incident based on gender differences were more pronounced for the age between 18 and 64 years with 10.5% and 14.2% of men and women in this group being poor respectively (Census Bureau, 2016). On the other hand, there was a decline in the rate for the natives to 36 million Americans from 38.2 million in the previous year. Also, 11.2% representing 2.6 million of the foreign-born citizens were reported to be poor. However, there was no significant difference in this number when the two years were compared. About the families living below the poverty line, in 2015, 10.6% of the families were poor in comparison to 13.5% in 2014 (ASEC, 2015). Most of the households being poor had females being the breadwinners at 28.2% in 2015 and 30% in the previous year while those with married couples had the least number of poor families at 6.2% in 2015 and 7.1% in 2014. Also, there was decrease in the rate among the disabled people from 12.4% to 11% in 2015. All the other groups experienced the same trend in 2014 and 2015.From the 1960s, United States has been experiencing variation in poverty rates based on the demographic attributes with increases at the periods of economic recessions. This factor is enhanced by income inequalities between different groups in the U.S population. The federal government is attempting to address the issue of poverty by creating opportunities for the marginalized and imposing policies that will enhance equal distribution of resources.

References

Census Bureau.U.S.(2016). Poverty and Income.NBS. Pdf

Davern, Michael, Arthur Jones, James Lepkowski, Gestur Davidson, and Lynn A. Blewett.(2006). Unstable Inferences? An Examination of Complex Survey Sample Design Adjustments Using the Current Population Survey for Health Services Research, Inquiry, Vol. 43, No. 3, pp.283297.

Fay, Robert E. and George F. Train.(2000). Aspects of Survey and Model-Based Postcensal Estimation of Income and Poverty Characteristics for States and Counties, Proceedings of the Section on Government Statistics, American Statistical Association, Alexandria.