Challenges to Poverty | Literature Review

Added on - 30 Sep 2019

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Literature ReviewAround one in five children living in the U.S. are living in poverty and this percentage iscomparatively higher for selected population sub groups. As per the reports of UNICEFInnocenti Research Centre (2012), among the world’s 35 richest countries, the United States hasbeen ranked as the second highest regarding the poverty and is surpasses only in Romania. Thechallenges related to poverty have increased by the lingering effects of the Great Recession of2007 leading to challenges in numeracy, literacy, and educational attainment.The poverty status is determined by the U.S. Census Bureau by comparing the pre-tax cashincome with the threshold being customized at thrice of the total cost of the 1963’s minimumfood diet. This is updated annually using the Consumer Price Index for the inflation and isaccordingly adjusted according to the composition, family size, and age of householder. Whenthe people living together are related to each other by marriage, birth and adoption, they aretermed as the family by the official poverty measure, a statistical tool for gauging the progressagainst the poverty. While setting the poverty line, the poverty rate must be based on the familyresources’ full accounting. According to the official measure, a family is considered to be poorwhen the income coming from all the family members fall below the poverty line.However, the poverty measurements in the United States have been seen to be highly flawed andwith widespread consensus for over three decades of debate and discussion has not resulted inany considerable change in the statistic. The official poverty measure of the United States hasbeen the same as it was developed in the 1960s. This measure has been criticized heavily as thecurrent indicator of the poverty will full documentation on the basis of the family cash income.Further this poverty measure is using the absolute threshold of the poverty which is not in paceand accordance with the current standard of living and does not even differ by geographic area.
Various transformation has been seen in the political and academic discussion on poverty andpoverty measures over the past three decades (Haveman 2000). In order to erase this problem,and to have insights of the changed behavior and nature, it is important to understand poverty(Patrick Moynihan, 1969). It is important to consider that the poverty line varies highly withfamily size. Every year, the message has been provided to the policymakers and the public by theofficial statistic regarding the poverty trends, even when it has been argued by many that aminimally decent living standard is not same as it was in the mid-1960s. A study by H. LukeShaefer and Kathryn Edin where the trends of extreme poverty were examined defining theextreme poverty as living on less than $2 per day, and it is considered as the World Bank metricof global poverty. In their study, they found that extreme poverty on the basis of money incomeis seen to increase from 1996 to 2011 from 1.7 percent to 4.4 percent. On adding refundable taxcredits and non-cash benefits, the extreme poverty is seen to rise from 1.1 to 1.6 percent in thesame span. This indicated that poverty has increased and it could have been much worse withoutadditional resources that are being provided by the safety net programs.
The National Academy of Sciences (NAS) and its 1995 panel have studied the poverty measureand criticized it thoroughly, mentioning the following points:While counting the family income, the poverty measurement excludes the in-kindbenefits like housing assistance and food stamps.While calculating the net income of the family on the basis of their working members, thecost of earning incomes like child care costs has been ignored.While determining the consumption needs of the family, the regional variation in the costof living is disregarded, mainly in the cost of housing.
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