| 1. |
What is the federal poverty guideline – the dollar amount that the government uses to determine if a family of four is poor?
Answer: $22,050
The formula for creating this poverty standard was developed in the 1960s and it was based on the fact that food costs were one-third of a typical family’s budget. So federal officials estimated the price of food goods that would be needed for one year, and they multiplied that number by three to get the poverty threshold.
Federal Poverty Guideline = 3 X Annual Food Costs
Since the 1960s, the relative costs of basic necessities have changed dramatically. Food now makes up only one-sixth of a typical family’s overall budget.
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Change in Relative Cost of Food
1960 |
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| 2007 | |
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The costs of housing and health care have risen significantly, while the relative cost of food has decreased. Yet the poverty standard is still calculated by using three as the multiplier. For this and other more complex reasons, the current poverty standard significantly underestimates the number of people who are poor. |
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2. |
How many people are poor in the United States? |
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Answer: 39.8 million
To put some perspective on that number, 39 million is the sum total of the populations of the states in orange in the map below.
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How many people are poor in Minnesota? |
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Answer: 480,000
Even though Minnesota has the third lowest rate of poverty in the nation, we still have about 480,000 people living in poverty. |
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| 3. |
True or false? The majority of those who live in poverty are persons of color. |
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Answer: False. The majority of persons living in poverty are white. As demonstrated in the following chart, white people have the lowest rate of poverty, but in absolute numbers, they make up the largest segment of the poverty population.
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U.S. Poverty Rates by Race |
| Average 2003-05 |
# in Poverty |
% in poverty |
| All races |
37,300,000 |
12.6 % |
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| White |
26,990,000 |
8.6% |
| African American |
9,300,000 |
24.7% |
| Native American |
573,000 |
25.3% |
| Asian American |
1,576,000 |
11.8% |
| Hispanic |
10,987,000 |
23.2% |
| Source: U.S. Census Data |
The odds of suffering from poverty are three times greater for African Americans than for white people. This ratio has been consistent over the last three decades, both when the economy is prospering and when the economy is in recession. Such a disparity results primarily from social and economic institutions and policies that provide fewer opportunities for African Americans and greater opportunities for white people.
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| 4. |
What age group in our nation is most likely to be poor?
Answer: Children, especially young children, have the highest poverty rates in our nation.
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U.S. Poverty Rates by Age |
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Age |
Poverty Rate |
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Younger than 5 |
20.0% |
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Younger than 18 |
19% |
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Age 45 - 54 |
8.2% |
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65 and older |
9.7% |
| Source: U.S. Census Data |
This chart includes one of the most disturbing of all statistics on poverty in the United States -- namely, that 20 percent of all children younger than 5 live in poverty. This means one in every five children in our nation is living in conditions that lack the basic material necessities for a decent life.
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| 5. |
How does the United States compare with the following industrialized nations in terms of its success in lifting families out of poverty?
Answer: The United States ranks last among industrialized nations on this measure. |
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Comparison of Governments' Success in Reducing Poverty
| Country |
Poverty rates
before government
assistance
|
Poverty rates
after government
assistance
|
Rate of success
in reducing
poverty |
| Canada |
29 |
10 |
66% |
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Finland |
33 |
4 |
88% |
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France |
39 |
8 |
79% |
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Germany |
29 |
7 |
76% |
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Netherlands |
30 |
7 |
77% |
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Norway |
27 |
4 |
85% |
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Sweden |
36 |
3 |
92% |
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United Kingdom |
38 |
13 |
66% |
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United States |
29 |
18 |
38% |
| Source: Luxembourg Income Study (2001) |
All of these industrialized nations have similar poverty rates before any government action is taken. The United States has exactly the same rate of poverty as Canada and Germany.
However, the poverty rates drop dramatically in most nations as a result of government assistance. The rates for Canada and Germany, for example, drop to 10 percent and 7 percent respectively.
The last column shows the percentage of those initially poor who were lifted out of poverty because of government assistance. On this last measure, the United States falls far short when compared to other industrialized nations.
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6.
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How is wealth distributed in the United States?
Answer: Wealth in the United States is more unequally distributed than in any other industrialized nation. The gap between rich and poor is now greater than at any point since the 1920s.
Distribution of Wealth (Net Assets) in the United States
This portion of
the population ... |
owns this share
of the nation's wealth |
| Bottom 40% |
.2% (One-fifth of one percent) |
| Top 20% |
83% |
| Top 1% |
38% |
The following pie chart gives a more detailed picture of how unequally the nation's wealth is divided. The numbers inside the pie chart represent the percentage of wealth that is held by the parts of the population indicated by the numbers outside the circle.
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Recent data on income distribution have pointed to the same overall picture -- extreme and growing inequality. For example, during 2005 (the most recent year for which data are available), total income reported to the Internal Revenue Service rose by 9 percent. However, all of the gains went to the richest tenth of the population. Income for the other 90 percent of Americans declined by 0.6 percent.
Income growth has become so concentrated that the 300,000 Americans who make up the top 0.1 percent collectively received as much income as the 150 million Americans in the lower half of the population.
U.S. Income, 2005
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Combined income of 300,000 Americans who make up
the top one-tenth
of one percent
of the population
$500 billion |
= |
Combined income of
the 150,000,000 Americans who
make up the lower 50% of the population
$500 billion
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Source: Census Bureau, 2007 |
You can join Catholic Charities in the effort to end poverty by becoming more informed and more involved. Please join us in this important work.
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