Poverty Level example essay topic

The Economics of Poverty in American Society Living in the United States, many of us do not think about poverty too much. Most people in the United States are above poverty level. They do not think about the less fortunate of America. Economics is the main factor of poverty in American Society, and more specifically, macroeconomics since it deals with the aggregate economy. To understand poverty and the poverty level, we need to see how the United States determines the poverty level each year. The United States Department of Agriculture in 1955 determined that one third of the income level for a family of three or more was spent on food.

Thus, multiply the amount of income spent on food for the year by three and you approximately have the poverty level. If a family's income falls below the poverty level, then they are considered to be living in poverty. Poverty thresholds do vary geographically. Alaska and Hawaii are the only two states to have a different poverty threshold since they have a higher price of living. Since then, there have been some modifications to this standard, but it has essentially stayed the same. The poverty level is then increased each year by the same percentage increase as the average Consumer Price Index.

The most current figures on poverty are from the year 2000. In 2000, approximately 11.3 percent of the U.S. population was below the poverty level. The official poverty line in 2000 was as determined by the Department of Health and Human Services was $17,050 for a family of four. Blacks and Hispanics had the highest amount in poverty with 22.1 and 21.2 percent under the poverty level, respectively. By age, 16.2 percent were under the age of eighteen, 9.4 percent were between 18 and 64, and 10.2 percent were 65 and over. Location of the family is also a determinant of poverty with the inner cities holding 16.1 percent of the poverty-stricken while only 7.8 percent lived in the suburbs.

To bring this to more present data, the poverty level for a family of four in 2002 is $18,100. The United States government has many programs to help combat poverty. The main program is through welfare. The welfare program is where money is given to applicable recipients whose household assets are below the federal or state mandated limits.

This is to help them get back on their feet again. The Food Stamp program is where stamps are offered to be used on food goods only. This can help alleviate cash flow problems and allow families to save their money. The program Temporary Assistance for Needy Families was created in 1996 by the Welfare Reform Law. They provide assistance to needy families and also help with job opportunities.

Another program is Supplemental Security Income, affiliated with the Social Security Program. The program is for the elderly, blind, or disabled people with little or no income. They provide money for food, clothes, and shelter to those qualifying. Poverty is a problem in macroeconomics for many reasons. Unemployment affects the United States by putting a burden on the government for support through the programs stated above and similar others.

These programs are supported by the taxpayers, with around 44 percent of federal expenditures being used for support programs such as Social Security and Medicaid. Poverty programs fall into these categories. Then the notion of the principles of taxation come into play, where only those using the services should pay for the services, but the poor can not pay for them. The problem then goes full circle in macroeconomics. Summing this all together, economics is definitely at the base of poverty in American society.

Some people simply do not earn enough money today to help cover their daily expenses. In a world where people are competing for a limited amount of resources, someone is bound to get stuck on the short end.