South-Western College Publishing - Economics  

For Richer, For Poorer
Subject Poverty
Topic Income Distribution and Poverty
Key Words Poverty, Poverty Rate
News Story

The U.S. Census Bureau reports that poverty is usually experienced for only a short period of time, although there is a core of long-term poverty-stricken Americans. Poverty exists if a three-person family earns less than $13,650, or a four-person household earns below $16,450. In 1993 and 1994, 30 percent of the population was under the poverty line for at least two months, while 5 percent were continuously below for the entire period. On average, people spent 4.5 months in poverty.

The overall figures mask great differences between subgroups. Hispanics and blacks were twice as likely as whites to experience poverty for at least two months, while single female heads of households were even more likely to suffer. Children were more likely than older people to become poor, although retirement-age persons stood a greater chance of remaining in poverty. Poverty was more common among urban residents than among non-metropolitan dwellers.

The poverty rate has fallen from 14.8 percent in 1992 to 13.7 percent in 1996. This is quite a small reduction considering the economic boom.
(Updated August 18, 1998)

Questions
  1. The poverty line is drawn at an income level of $16,450 for a family of four. How does the government estimate this figure?
  2. Why might poverty be only a short-term problem for some people?
  3. Why might poverty be more pervasive and longer-lasting for minorities?
  4. Why has the booming economy not led to a more significant reduction in the poverty rate? Think about the case of households headed by single females.
Source Scott Shepard, “Third of nation flirts with poverty,” Tampa Tribune, August 10, 1998.

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