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Definitions of Poverty Absolute Standard Cost of Food Budget Times 3 $19,971 for a Family of Four $10,160 for a Single Person Median Income = $46,326 (2005) 2005: 37 million people (12.6%) Relative Standard (European Union) 50% of the Median Income World Bank

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definitions of poverty
Definitions of Poverty

Absolute Standard

  • Cost of Food Budget Times 3
  • $19,971 for a Family of Four
  • $10,160 for a Single Person
  • Median Income = $46,326 (2005)
  • 2005: 37 million people (12.6%)

Relative Standard (European Union)

  • 50% of the Median Income
  • World Bank
  • Extreme Poverty = $1 per day
  • (1.1 billion)
  • Moderate Poverty = $1 to $2 per day (1.6 billion)
poverty thresholds for 2005
Poverty Thresholds for 2005
  • One Person Under 65 $10,160
  • One Adult, One Child $13,461
  • Two Adults, No Children $13,078
  • One Adult, Two Children $15,735
  • Two Adults, Two Children $19,806
  • Two Adults Three Children $23,307
  • Nine People $40,288
definitions of poverty3
Definitions of Poverty

Absolute Standard

  • Cost of Food Budget Times 3
  • $19,971 for a Family of Four
  • $10,160 for a Single Person
  • Median Income = $46,326 (2005)
  • 2005: 37 million people (12.6%)

Relative Standard (European Union)

  • 50% of the Median Income
  • World Bank
  • Extreme Poverty = $1 per day
  • (1.1 billion)
  • Moderate Poverty = $1 to $2 per day (1.6 billion)
poverty rates over time
Poverty Rates Over Time
  • Absolute Standard Relative Standard
  • 1949 39% 25%
  • 1969 12.1% 21%
  • 1979 11.7%
  • 1989 12.8
  • 1995 13.8
  • 1999 11.3 26%
  • 2001 11.7
  • 2002 12.1
  • 2003 12.5
  • 2004 12.7
  • 2005 12.6
poverty rates
Poverty Rates
  • Absolute(2004) Relative(2000)
  • All People 12.6% 21.1%
  • Ethnicity
  • White 10.8% 15.7%
  • Black 24.6% 35.5%
  • Asian 9.9% 18.9%
  • Hispanic 21.8% 37.0%
  • Native American 25.9% NA
  • Age
  • Under 18 17.4%
  • 18 to 64 11.2%
  • 65 and up 10.5%
  • Family Type
  • Married Couple 5.6% 12.7%
  • Married With Children 6.9% 14.2%
  • Female Headed with Children 35.3% 52.6%
  • Unrelated 18.9% 34.1%
  • Education (Age 25+)
  • Less than High School 22.2% 42.6%
  • High School 9.2% 19.7%
  • Some College 5.9% 13.4%
  • College Graduate 3.2% 6.4%
  • Citizenship
  • Native 12.0% 20.2%
  • Naturalized Citizen 10.2% 19.7%
  • Not a Citizen 21.6% 34.4%
international comparisons
International Comparisons
  • 50% of the Median Income
  • Total Population Children
  • Australia (1994) 14.3% 15.8%
  • Austria (2000) 7.7% 7.8%
  • Belgium (2000) 8.0% 6.7%
  • Canada (2000) 11.4% 14.9%
  • Denmark (1992) 7.2% 5.0%
  • Finland (2000) 5.4% 2.8%
  • France (1994) 8.0% 7.9%
  • Germany (2000) 8.3% 9.0%
  • Italy (2000) 12.7% 16.6%
  • Mexico (2002) 20.2% 24.8%
  • Netherlands (1999) 7.3% 9.8%
  • Spain (2000) 14.3% 16.1%
  • Sweden (2000) 6.5% 4.2%
  • Switzerland (2002) 7.6% 6.7%
  • Taiwan (2000) 9.1% 8.0%
  • United Kingdom (1999) 12.4% 15.3%
  • United States (2000) 17.0% 21.9%
distribution of income
Distribution of Income
  • Percent of Income
  • 2003 1967
  • Lowest Quintile 3.4% 4.0%
  • Second Quintile 8.7% 10.8%
  • Third Quintile 14.8% 17.3%
  • Fourth Quintile 23.4% 24.2%
  • Top Quintile 49.8% 43.8%
  • Top 5% 22.4% 17.5%
distribution of wealth
Distribution of Wealth
  • 2001 1983
  • Bottom 40% 0.3% 0.9%
  • 3rd 20% 3.9% 5.2%
  • 4th 20% 11.3% 12.3%
  • Top 20% 84.4% 81.3%
  • Top 5% 59.2%
  • Top 1% 33.4%
aid to families with dependent children afdc
Aid to Families with Dependent Children (AFDC)
  • 1. Recipients
  • a. Single mothers with children
  • b. In California, also two-parent families if the main
  • earner is unemployed
  • c. Income is below a certain amount
  • 2. Benefits for a mother with 2 children and no other
  • income
  • a. 1996: $565 per month
  • b. 2001: $645 per month
  • c. Declined $0.30 for every dollar earned working
  • d. Also eligible for Food Stamps and Medicaid and possibly Rent
  • Supplements
  • 3. Numbers as of 1996
  • a. 2.6 million people in California; 12.9 million people nationally
  • b. Perhaps ¼ of recipients collected for 10 years or more
  • 4. Perverse Incentives
  • a. Incentive not to work
  • b. Incentive for fathers not to pay child support
  • c. Incentive for single mothers to live separately from their own parents
  • d. Incentive for more out-of-wedlock births
personal responsibility and work opportunity act of 1996
Personal Responsibility and Work Opportunity Act of 1996
  • 1. New Name: Temporary Assistance for Needy Families – TANF (Cal Works)
  • 2. The recipient can collect benefits for no more than two years.
  • The two years is to be used to get ready for employment.
  • The recipient can collect benefits for no more than five years in a lifetime.
  • 3. Characteristics of Recipients
  • 40% had failed to finish high school
  • 75% were in the bottom 25% on aptitude tests
  • 4. Numbers receiving assistance fell from 1996 to 2001
  • a. Americans: from 12.9 million to 5.3 million
  • b. Californians: from 2.6 million to 1.2 million
  • c. Percent of Americans fell from 4.5% to 1.9%
  • 5. Gain from working rather than being on welfare:
  • $2,000 per year in 1986 and $7,100 per year in 1997
  • 6. Employment Rates of Single Mothers:
  • 60% in 1994 72% in 1999