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Poverty Essay, Research Paper
+ (a) In general
For purposes of this chapter, the term ”homeless” or ”homeless individual or homeless person”  includes –
o (1) an individual who lacks a fixed, regular, and adequate
nighttime residence; and
(2) an individual who has a primary nighttime residence that is
(A) a supervised publicly or privately operated shelter
designed to provide temporary living accommodations (including
welfare hotels, congregate shelters, and transitional housing
for the mentally ill);
(B) an institution that provides a temporary residence for
individuals intended to be institutionalized; or
(C) a public or private place not designed for, or ordinarily
used as, a regular sleeping accommodation for human beings.
+ (b) Income eligibility
o (1) In general
A homeless individual shall be eligible for assistance under
any program provided by this chapter, only if the individual
complies with the income eligibility requirements otherwise
applicable to such program.
o (2) Exception
Notwithstanding paragraph (1), a homeless individual shall be
eligible for assistance under the Job Training Partnership Act
(29 U.S.C. 1501 et seq.).
+ (c) Exclusion
For purposes of this chapter, the term ”homeless” or ”homeless individual” does not include any individual imprisoned or otherwise detained pursuant to an Act of HUD s emergency shelter grants
+ HUD s supportive housing program
+ HUD s section 8 – single room occupancy program
+ HUD s shelter plus care program
+ Surplus federal property to assist the homeless (title V)
+ Housing initiative
+ Battered Women s Shelters
+ Housing counseling
+ Food stamps
+ Gleaning initiative – national food recovery
+ Emergency food assistance program
+ Education for Homeless Children and Youth
+ Adult education for the homeless
+ Health care for the homeless
+ Projects for Assistance in Transition from Homelessness (PATH)
+ Temporary assistance to needy families
+ Health and Human Services page for homeless
SOCIAL SECURITY BENEFITS
+ Social security benefits for the homeless
+ Rural homeless veterans reintegration project
+ Employment and training of homeless – best practices
+ HUD s jobs center
+ Runaway and homeless youth program
+ Head Start for the homeless
+ Basic centers program
+ Transitional living program for homeless youth
+ Education and prevention grants to reduce sexual abuse of runaway and street youth
Children s health Many people call or write the National Coalition for the Homeless to ask about the number of homeless people in the United States. There is no easy answer to this question, and in fact, the question itself is misleading. In most cases, homelessness is a temporary circumstance — not a permanent condition. A more appropriate measure of the magnitude of homelessness is therefore the number of people who experience homelessness over time, not the number of “homeless people.”
Studies of homelessness are complicated by problems of definitions and methodology. This fact sheet describes definitions of homelessness, methodologies for counting homeless people, recent estimates of homelessness, and estimates of the increase in homelessness over the past two decades. Additional resources for further study are also provided.
As a result of methodological and financial constraints, most studies are limited to counting people who are literally homeless — that is, in shelters or on the streets. While this approach may yield useful information about the number of people who use services such as shelters and soup kitchens, or who are easy to locate on the street, it can result in underestimates of homelessness. Many people who lack a stable, permanent residence have few shelter options because shelters are filled to capacity or are unavailable. A recent study of 30 U.S. cities found that in 1998, 26% of all requests for emergency shelter went unmet due to lack of resources (U.S. Conference of Mayors, 1998). In addition, a review of homelessness in 50 cities found that in virtually every city, the city’s official estimated number of homeless people greatly exceeded the number of emergency shelter and transitional housing spaces (National Law Center on Homelessness and Poverty, 1999). Moreover, there are few or no shelters in rural areas of the United States, despite significant levels of homelessness (Aron and Fitchen, 1996). As a result of these and other factors, many people who lack permanent housing are forced to live with relatives and friends in crowded, temporary arrangements. People living in unstable housing arrangements who lack a permanent place to stay are experiencing a kind of homelessness, but because they are not “literally homeless,” they will not be counted.
Researchers use different methods to measure homelessness. One method attempts to count all the people who are literally homeless on a given day or during a given week (point-in-time counts). A second method of counting homeless people examines the number of people who are homeless over a given period of time (period prevalence counts).
Choosing between point-in-time counts and period-prevalence counts has significant implications for understanding the magnitude and dynamics of homelessness. The high turnover in the homeless population documented by recent studies (see below) suggests that many more people experience homelessness than previously thought, and that most of these people do not remain homeless. Because point-in-time studies give just a “snapshot” picture of homelessness, they only count those who are homeless at a particular time. Over time, however, some people will find housing and escape homelessness while new people will lose housing and become homeless. Systemic social and economic factors (prolonged unemployment or sudden loss of a job, lack of affordable housing, domestic violence, etc.) are frequently responsible for these episodes of homelessness. Point-in-time studies do not accurately identify these intermittently homeless people, and therefore tend to overestimate the proportion of people who are chronically homeless — particularly those who suffer from severe mental illness and/or addiction disorders and who therefore have a much harder time escaping homelessness and finding permanent housing. For these reasons, point-in-time counts are often criticized as misrepresenting the magnitude and nature of homelessness.
There is another important methodological issue that should be considered. Regardless of the time period over which the study was conducted, many people will not be counted because they are not in places researchers can easily find. This group of people, often referred to as “the unsheltered” or “hidden” homeless, frequently stay in automobiles, camp grounds, or other places that researchers cannot effectively search. For instance, a national study of formerly homeless people found that the most common places people who had been literally homeless stayed were vehicles (59.2%) and makeshift housing, such as tents, boxes, caves, or boxcars (24.6%) (Link et al., 1995). This suggests that homeless counts may miss significant numbers of people who are literally homeless, as well as those living in doubled-up situations.
NATIONAL ESTIMATES OF HOMELESSNESS
There are at least four widely used national estimates of homelessness. Many are dated, or based on dated information. For all of the reasons discussed above, none of these estimates represents “how many people are homeless.”
500,000 – 600,000 (1988)
The most widely cited example of a point-in-time estimate is the approximately 500,000-600,000 homeless people found in shelters, eating at soup kitchens, or congregating on the street during one week in 1988 (Burt and Cohen, 1989).
700,000+/night; 2 million/year (1999)
The 500,000-600,000 estimate is sometimes updated by using a projected rate of increase of 5% a year to produce an estimate of over 700,000 people homeless on any given night, and up to 2 million people who experience homelessness during one year (National Law Center on Homelessness and Poverty, 1999).
Seven million (1985-1990)
In 1990, a national telephone survey identified formerly homeless people and produced life-time and five-year prevalence estimates of homelessness. Seven percent of the respondents reported that they had been literally homeless at some point in their lives, and three percent reported being homeless at some point between 1985-1990 (Link et al.,1994). The Clinton Administration’s Priority Home! The Federal Plan to Break the Cycle of Homelessness uses this data, corrected to include children, to estimate that between 4.95 million to 9.32 million people (with a mid-point of 7 million) experienced homelessness in the latter half of the 1980s.
A second study was undertaken in 1994 to refine the analysis with more explicit definitions and detailed information. This study found that 6.5% (12 million adults nationwide) of the respondents had been literally homeless at some point in their lives, and that 3.6% (6.6 million adults nationwide) of the respondents had experienced homelessness (literal or doubled up) between 1989-1994 (Link et al., 1995). Thus, it appears that 12 million of the adult residents of the U.S. have been literally homeless at some point in their lives.
Three percent (1994)
Dennis Culhane’s study of turnover rates in shelters in New York City and Philadelphia is another example of a period prevalence count. This study revealed that 3% of Philadelphia’s population used the public shelter system between 1990 and 1992, and that in New York, 3% of the population received shelter between 1988-1992 (Culhane et al., 1994). The Culhane study also found that in New York City, a single shelter bed accomodates four different people in the course of a year; in Philadelphia, each bed accomodates six different persons per year. Because this study did not include persons in privately funded shelters or on the streets, the findings underestimate homelessness in both cities.
A study by Martha Burt compared these rates with data from seven other jurisdictions (Burt, 1994). The comparison showed that the New York City and Philadelphia rates fall well within the range of data from other regions of the country.
IS HOMELESSNESS INCREASING?
One limited measure of the growth in homelessness is the increase in the number of shelter beds over time. A 1991 study examined homelessness “rates” (the number of shelter beds in a city divided by the city’s population) in 182 U.S. cities with populations over 100,000. The study found that homelessness rates tripled between 1981 and 1989 for the 182 cities as a group (Burt, 1997).
A 1997 review of research conducted over the past decade (1987-1997) in 11 communities and 4 states found that shelter capacity more than doubled in nine communities and three states during that time period (National Coalition for the Homeless, 1997). In two communities and two states, shelter capacity tripled over the decade.
These numbers are useful for measuring the growth in demand for shelter beds (and the resources made available to respond to that growth) over time. They indicate a dramatic increase in homelessness in the United States over the past two decades.
By its very nature, homelessness is impossible to measure with 100% accuracy. More important than knowing the precise number of people who experience homelessness is our progress in ending it. Recent studies suggest that the United States generates homelessness at a much higher rate than previously thought. Our task in ending homelessness is thus more important now than ever.
+ the Congress or a State law.
The National Coalition for the Homeless provided leadership in the successful effort to pass the Stewart B. McKinney Homelessness Assistance Act in 1987. Since then, NCH has continued to monitor the reauthorization and appropriations process for McKinney Act programs and other programs affecting poor and homeless people. NCH supports legislation to provide an adequate supply of affordable housing, jobs which pay a living wage, and universal access to health care. Legislative Alerts Learn about homelessness-related legislation being considered by Congress and what you can do about it. General Homelessness Issues NCH’s 2000 Federal Legislative Agenda This document provides an overview of NCH’s federal legislative priorities for 2000, including housing, health, education, income, and civil rights. The McKinney Act The Stewart B. McKinney Homeless Assistance Act was the first — and remains the only — major federal legislative response to homelessness. This fact sheet provides a brief history of the McKinney Act, describes its content and evolution, and summarizes recent trends in McKinney Act legislation and funding. Funding and Budget Issues Appropriations for Federal Homeless Programs Table of FY95-00 funding levels for homeless programs. FY2001 Budget and Homelessness This page summarizes the most recent budget and appropriations legislation and provides NCH’s recommended funding levels for federal homeless programs. Housing and Shelter Issues Community Housing Investment Trust Discusses key provisions of an NCH-sponsored initiative to create one million units of high-quality, affordable rental housing for persons whose annual incomes are less than the minimum wage, including persons with disabilities, elder age, or low-wage incomes. McKinney Side by Side Side by Side comparison of major components of proposals to amend HUD homeless legislation (July 2000). Housing and Welfare Reform: Background Information Prepared by the Center on Budget and Policy Priorities, this paper explores the impact of welfare policy on housing and the impact of housing policy on welfare. Welfare Issues Welfare to What: Early Findings on Family Hardship and Well-Being Published by the Children’s Defense Fund and the National Coalition for the Homeless in November 1998, this report examines the impacts on families two years after the signing of the federal welfare law. It presents national and local findings and compiles more than 30 state and local studies. The Executive Summary is available at http://nch.ari.net/w2wexec.html. The full report may be downloaded below. Welfare to What (Full Report – 246K) Note: To view this file, you will need Acrobat Reader.
Using TANF to Reduce and Prevent Homelessness: Effective Practices and Strategies. Published in May 2000, this paper was written to provide specific examples of how states and communities have used TANF productively to reduce and prevent homelessness. Other Internet Resources on Welfare and Poverty Links to online organizations and sources of information on poverty and welfare. Education Issues School Segregation and Homeless Children and Youth This overview summarizes available information on integrated homeless education programs (those programs that help homeless children enroll, attend, and succeed in mainstream schools) and segregated classrooms or schools (those that separate homeless children from housed children on the basis of their homelessness alone). For more detailed information, including program examples, please see School Segregation and Homeless Children and Youth: Questions and Answers Reauthorization of the McKinney Act’s Education for Homeless Children and Youth Program Congress will consider legislation to reauthorize the McKinney Act’s Education of Homeless Children and Youth (EHCY) program in 1999. The EHCY program works to ensure homeless children and youth’s enrollment, attendance, and success in school. This page provides up-to-date information on reauthorization for advocates, teachers, service providers, and administrators, including analyses and summaries of reauthorization legislation, links to relevant committees, and more detailed action alerts. America’s Homeless Children: Will Their Future Be Different? A Survey of State Homeless Education Programs The McKinney Act is responsible for significant improvements in homeless children’s access to public education. However, increasing homelessness among families with children and a simultaneous reduction in federal funding threatened the progress that states and communities had made in helping homeless children and youth enroll, attend, and succeed in school. This 1997 40-state survey examines the accomplishments and challenges of homeless education programs faced with increasing demand for services and decreasing resources. Making the Grade: Successes and Challenges in Educating Homeless Children and Youth The 1996 Position Document of the National Association of State Coordinators for the Education of Homeless Children and Youth. This report summarizes the history and progress of efforts to educate homeless children and youth, profiles 30 selected state homeless education programs, and offers recommendations for improving the McKinney Education for Homeless Children and Youth program. Health Issues No Open Door: Breaking the Lock on Addiction Recovery for Homeless People This NCH report examines what has been learned in the last decade about the barriers that homeless people face in accessing addictive disorder services and the treatment and recovery interventions that are effective with the homeless population. The Projects for Assistance in Transition from Homelessness (PATH) Program Describes the function and accomplishments of the McKinney Act’s Projects for Assistance in Transition from Homelessness (PATH) program, as well as NCH’s recommendations for expanding and strengthening PATH. Homeless Treatment and Recovery Competitive Grant Program Describes NCH’s initiative to reauthorize and appropriate funds for a national competitive grant program to develop and expand addictive and mental disorder treatment and recovery opportunities for homeless persons with addictive and mental disorders Increased Demand, Decreased Supply: Challenges to the McKinney Act’s Health Care for the Homeless Program Changes in the health care marketplace, in public policy, and in the face of homelessness itself are creating new demand for health services for homeless people according to this study published by the National Health Care for the Homeless Council and the federal Bureau of Primary Health Care.
In 1996, the number of persons living in poverty was 36.5 million or 13.7 percent of the population. (This does not represent a significant change from 1995, when 36.4 million (13.8 percent) were poor.)
In 1996, 20.5 percent of children under age 18 were poor, a larger percentage than any other age group. (In 1995, the rate was 20.8 percent.) Children under the age of 18 represent 40 percent of the poverty population, even though they are only 27 percent of the total population.
The overall poverty rate for children under age six was 22.7 percent. Of children under age six living in female-headed families, 58.8 percent were poor, compared with 11.5 percent of such children in married-couple families.
The poverty rate for all whites was 11.2 percent, 8.6 percent for non-Hispanic whites, 28.4 percent for blacks, 29.4 percent for Hispanics (who may be of any race), and 14.5 percent for Asians and Pacific Islanders. (None of these race or ethnic groups experienced any significant change in the number of poor or the poverty rate between 1995 and 1996.)
The poverty rate for families was 11.0 percent, representing 7.7 million families. (In 1995, 7.5 million (10.8 percent) families were poor; this does not represent a significant change.)
Of the poor over the age of 16, 41 percent worked, and 10 percent worked year-round, full-time. (For all persons 16 years and older, 70 percent worked and 44 percent worked year-round, full-time.)
Elderly persons (over age 65) are 12 percent of the total population, but make up only nine percent of the poor; 10.8 percent of persons aged 65 and over were poor in 1996. However, the elderly made up 19 percent of the 12.8 million “near poor” (people with family incomes between (100-125 percent of their respective thresholds). A higher proportion of the elderly (7.6 percent) than the nonelderly (4.4 percent) were classified as “near poor.” In 1996, 4.8 percent of the total population were “near poor.”
The foreign-born population was disproportionately poor when compared with natives1 of the United States. With a 1996 poverty rate of 21.0 percent, the 25.8 million foreign-born individuals represented only 9.7 percent of the total population but comprised 14.8 percent of the poor. Of the foreign-born population, 16.7 million people (64.9 percent) were not naturalized citizens; 26.8 percent of non-citizens were poor; 10.4 percent of naturalized citizens were poor (the poverty rate for natives was 12.9 percent
Over the past year, over 2 million men, women, and children were homeless. Just in 1995 the demand for shelter increased by 11%.
And even more Americans are at risk of homelessness. A recent HUD report found that 3 million poor Americans had worst case housing needs, paying more than 50% of their income on rent, while HUD estimates that this figure should be no more than 30%.
A missed paycheck, a health crisis, or an unpaid bill pushes poor families over the edge into homelessness.
The homeless population is diverse:
+ 25-40% work.
+ 37% are families with children.
+ 25% are children.
+ 25-30% are mentally disabled.
+ 30% are veterans.
+ 40% are drug or alcohol dependent.
To end homelessness, new policies must be implemented to address its fundamental causes:
+ Lack of Affordable Housing: Today, fewer than 30% of those eligible for low-income housing receive it. The private stock of extremely low-rent units fell by 478,000 units between 1985 and 1993, and federal housing programs have been slashed by over 75%.
+ Lagging Incomes: Incomes for the poorest Americans have not kept pace with rising housing costs. Millions of workers are shut out of the private housing market.
+ Slashed Services and Government Assistance: At the same time earned income for the poor was decreasing, assistance programs were severely cut. Fewer that 14% of disabled homeless people receive disability benefits.
Opinion polls show that the majority of Americans sup-port solutions to end homelessness. To achieve
Increasing rents, destruction of traditional low-income housing, and the cuts in federal housing programs threaten affordable housing with virtual extinction. Affordability is the critical housing problem for people with low incomes. The Low Income Housing Information Service estimates that there are twice as many low-income families searching for housing as there are units available. During the 1970’s alone, about one-half of the nation’s total stock of single room occupancy units (SRO’s) was destroyed, leaving many former occupants on the streets or in shelters. Many of these homeless people are waiting on subsidized Section 8 housing lists — a wait that can take up to six years.
Only 30% of poor people eligible for housing assistance actually receive it. According to the Department of Housing and Urban Development, in 1993 worst case housing needs reached an all-time high of 5.3 million households. They paid more than half their incomes for housing or lived in housing with serious physical problems — or both. The problem is getting worse. The number of unassisted, very low-income renter households facing housing quality problems increased by 400,000 between 1991 and 1993.
According to the most recent Census Bureau data, 36.4 million people lived at or below the poverty line in 1995 and are at serious risk of homelessness. About one in ten of the extremely poor become homeless.
With the national unemployment rate currently at 5.4%, previously-working Americans find themselves at risk of homelessness. Additionally, minimum wage earnings no longer lift families above the poverty line. More than 3 million poor Americans spend more than half of their total income on housing, yet the Department of Housing and Urban Development estimates families should spend no more than 30%. Although 20% of homeless adults are employed, many work in day-labor jobs that do not meet basic needs, while technological acceleration excludes others from a competitive job market.
Slashed public assistance has also left many people homeless or at risk of homelessness. Replacement of the Aid to Families with Dependent Children (AFDC) entitlement program– a program that was already inadequate in meeting the needs of families — with the non-entitlement block rant program will significantly increased the risk of homelessness for many Americans. According to the House Ways and Means Committee, AFDC represents less than half of the poverty threshold in three out of four states. Furthermore, earned income and asset limitations discourage individuals and families from breaking the cycle of homelessness and extreme poverty. Several states have terminated or reduced General Assistance benefits for individuals, while Social Security Income (SSI) is inadequate — and sometimes impossible to obtain — for disabled individuals. Food stamps have also been reduced, leaving a gaping hole in the so-called safety net.
The escalating health care crisis places low- and middle-income families at serious risk of homelessness, while inadequate government programs addressing mental health, child care and education impede homeless people from escaping their circumstances. The majority of the 37.9 million Americans without health insurance earn low incomes and are less likely to weather an economic crisis resulting from prolonged illness. Homeless people are twice as likely as the general population to have chronic health problems but are less likely to have access to adequate health care.
Additionally, under-resourced substance abuse programs prevent thousands of low-income individuals from receiving treatment. And although 23-30% of homeless people suffer from mental illness, fewer than 3% of homeless men and 14% of homeless women receive their entitled disability benefits, while deinstitutionalization policies of the 1960’s left many individuals abandoned to the streets with no services or means of support. Of the 2,000 federally-supported facilities planned to reintegrate these individuals into society, fewer than 800 materialized.
In the United States, available day care meets only a fraction of total need. Millions of parents must choose between seeking employment and caring for their children, resulting in the reliance of many families on the welfare system. Education policy also increases social disparities. Residency requirements, inability to obtain school records, and lack of transportation are primary barriers to public education for the more than 750,000 homeless children annually. Almost 23% of school-aged homeless children are regularly shut out from school.
There are more homeless people in the United States than resources available to help them — more than 750,000 homeless people on any given night and only 250,000 spaces available in shelters. People have no place else to be — except in public.
Cities across the country are responding to this disparity, not by addressing the causes of homelessness, but by passing and enforcing laws punishing homeless people for begging as well as for sleeping and even sitting in public — even though there are no alternative places for homeless people to sleep or sit. At least 72 cities have pursued efforts to criminalize activities associated with homelessness. For example:
+ In Cleveland, police officers pursued a policy of driving homeless people from downtown areas to remote industrial areas and leaving them there.
+ The City of Santa Monica passed ordinances ensuring that there is no public place where homeless people can sleep. The City also passed laws to prevent private individuals from distributing food to hungry people.
+ In an effort to keep homeless people away from downtown businesses, the City of Seattle vigorously enforces laws preventing homeless people from even sitting down to rest in public downtown areas.
both the shortage of affordable housing and the inadequacy of income to meet basic needs. Permanent solutions must also address the additional need for treatment for people suffering from disabilities.
Permanent solutions must:
+ Ensure Affordable Housing. Provide subsidies to make existing housing affordable; create additional affordable housing through rehabilitation and, where needed, new construction.
+ Ensure Adequate Income. Ensure that working men and women earn enough to meet basic needs, including housing; ensure that those able to work have access to
+ jobs and job training; ensure that those not able to work are provided assistance adequate to meet basic needs, including housing.
+ Ensure Social Services. Ensure access to social services, including health care, child care, mental health care and substance abuse treatment.
+ Prohibit Discrimination. Prohibit laws that discriminate against homeless people, including laws that specifically target them or activities they must engage in because they are homeless.
Permanent solutions must also prevent people from becoming homeless. New policies that address the underlying structural causes of homelessness — by addressing housing, income and treatment problems — must coincide with specific prevention policies to stem the rising tide of homelessness.
Increasingly, homelessness affects not only the very poor, but also working and middle class Americans. Middle class families are increasingly unable to afford to buy, or even rent, their own homes. Middle class workers are now facing rising unemployment, coupled with declining assistance from “safety net” programs.
Permanent solutions to homelessness reintegrate homeless people into society and foster self-empowerment. Policies that produce affordable housing by employing homeless people are among the necessary policies that strengthen the economy while also helping to end homelessness.
Despite recent media reports to the contrary, polls consistently reveal that the majority of the American public supports aid to the homeless. According to the polls, the majority of the public understands the underlying causes of homelessness, and 81% would pay additional taxes to fund increased aid.
The most dramatic stat in a 1997 Center on Budget’s analysis (Trends in the Distribution of After-Tax Income) is that the wealthiest one percent of Americans (2.6 million people) received as much after-tax income in 1994 as the bottom 35 percent of the population combined (88 million people). In contrast, in 1977, the bottom 35 percent had nearly twice as much after-tax income as the top one percent. During the 17 years between 1977 and 1994, the wealthiest one percent saw their income shoot up 72 percent, to $374,000 a year. At the same time, the poorest fifth of the population saw their incomes drop 16 percent. One stat brings home the meaning of this shift: if families in the bottom fifth had received the same share of income in 1994 as they did in 1977, each family would have had an additional $2654 in income. Instead, each family in the top one percent had an additional $132,955 in income!
Families in the middle of the income spectrum also lost ground, though not as much. The middle fifth’s share of national income declined from 16.3 percent to 15.2 percent, an average loss of $1800 in income. “These income trends since 1977 primarily reflect the effects of changes in the private economy,” concludes the Center on Budget’s analysis. People at the top are being paid much more while those in low-skill jobs are making much less. “Changes in technology and international trade, as well as the weakening of unions, are among the factors that appear to be driving these diverging paths.” Poverty declines in 1997, but not by much The latest statistics from the Census Bureau show that several years of economic growth has lowered the poverty rate, but very slowly, from 13.7 percent in 1995 to 13.3 percent in 1997. But this is still higher than the rate in 1989 (13.1 percent), shortly before the recession of the early 1990s. One out of eight Americans is poor. One of five children (19.9 percent) is poor. And those who are poor keeping falling further behind. In 1997, the average poor family fell another $200 further below the poverty line. Their income is $6602 below the poverty level. In 1996, the number of “very poor” Americans — those making less than half the poverty line — increased by a half million, up to 14.4 million people. The poverty line for a family of four was $16,036 in 1996. This deepening of poverty “appears to be related to a weakening of safety net programs,” according to the Center on Budget and Policy Priorities. It found that “declines in the number of people receiving basic assistance targeted on needy families have far outstripped the decline in the number of people who are poor.” For example, the number of female-headed families with children who are poor declined 4.3 percent. But the number of such families who receive assistance declined 22.6 percent, or more than five times as fast. Between 1995 and 1997, the decline in the number of people receiving food stamps was five times greater than the decline in the number of people living in poverty. The Center on Budget cites unpublished Census Bureau data that show that the number of children lifted out of poverty by programs such as welfare and food stamps decreased by 700,000 between 1995 and 1997. How do we compare? This decrease in support for low income Americans will solidify the U.S.’s status as the country with the most unequal distribution of income in the developed world. A very interesting new study by Timothy Smeeding of Syracuse University compared inequality among 22 nations, using data from the Luxembourg Income Study (American Income Inequality in a Cross-National Perspective: Why Are We So Different?). He looked at adjusted disposable income (which includes wages plus government transfer payments –which would includes things like welfare and Social Security — less direct taxes) for households near the top (90th percentile) and near the bottom (10th percentile). In this country, the wealthiest 10 percent enjoy nearly six times more income than those in the bottom 10 percent. The ratio between the top and bottom — 5.78 — was much greater in the U.S. than any other country. It is double the ratio in many countries and 60 percent higher than the average ratio. (Given the extreme wealth of the top one percent of Americans, this ratio probably significantly understates the actual differences between the very rich and the poor.) The major cause of this disparity, Smeeding found, is this country’s “very low relative incomes at the bottom.” The poorest 10 percent of households have only 36 percent of the income of households at the middle. In contrast, low-income households in most other countries have at least half the average income for that country. But does inequality matter as much in this country since average income in the U.S. is the highest in the world? Are those at the bottom in this country really worse off than those at the bottom in other countries? Smeeding examined these questions, using a database that compares purchasing power in 15 countries. He found that low-income Americans were still worse off than low-income people in every other country but one — the United Kingdom. (Plus, this comparison does not take into account the fact that low-income households in the U.S. must spend more on services such as health care and child care that are more heavily subsidized in other countries.) At the other end, rich Americans have 42 percent more income than the rich in the other nations! What causes our greater inequality? Smeeding says his research points to two factors: low wages and meager income supports for low income families with children and low income elderly people. Smeeding also looked at another common response to inequality in the U.S.: it’s okay because Americans are much more economically mobile: the poor can become the rich! Smeeding found that it’s true that many once middle income Americans have become rich. But, he writes, studies of income and mobility across nations clearly show that “economic mobility is not greater in the United States than in other nations.” Indeed, “economic mobility in the United States has not increased with rising inequality and may, in fact, have fallen in recent years.” Timothy Smeeding is the director of the Center for Policy Research, The Maxwell School, Syracuse University. The study is available on the university’s web site
How many people live below the poverty level and what is the poverty rate for the most current year?
The poverty rate decreased in 1997 to 13.3%, down from 13.7% in 1996. The number of poor people remained statistically significant at 35.6 million people.
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