Poverty and Income Distribution

Poverty and Income Distribution

Learning Objectives:
1. Define who is poor, according to government standards
2. Describe the causes of poverty
3. Analyze the distribution of income in the United States
4. Analyze the costs and benefits of U.S. economic policy to the goal of equity

Word Cloud

What word comes to mind when you hear the word poverty?(1-2 words)

What is Poverty?

• According to the government, a poor family is one whose total income is less than the amount required to satisfy the family's minimum needs.

• The Office of Management and Budget determines the income level known as the poverty line/threshold.

• The poverty threshold is the income level below which income is insufficient to support a family or household.

​Poverty line/threshold

• The poverty line varies with size of the family

​Persons in Family Household	​Poverty Guideline
​1	​$14,580
​2	​$19,720
​3	​$24,860
​4	​$30,000

Hotspot

Which state has the highest percentage of people in poverty?

Open Ended

Spend about 30 seconds talking to a neighbor and then answer: Why do you think Louisiana has the highest percentage of people living in poverty?

• Ranked 50th in economy

• Ranked 46th in education

• Ranked 48th in opportunity

• Overall ranked 50th

https://www.usnews.com/news/best-states/louisiana

Characteristics of Louisiana

Hotspot

Which state has the smallest percentage of people living in poverty?

Open Ended

Spend about 30 seconds talking to a neighbor about why you think New Hampshire has the smallest percentage of people living in poverty and then respond here.

• ​Ranked 4th in Economy

• Ranked 19th in Education

• Ranked 1st in Opportunity

• Overall ranked 6th

  https://www.usnews.com/news/best-states/rankings

​

Characteristics of New Hampshire

The opportunity in different states can vary.
Living in the inner cities, far from higher-wage jobs in suburban areas.

​Where people live

Single-parent families are more likely to live in poverty.

​The divorce rate has risen significantly since the 1960s, as has the children born to unmarried parents.

​Family Structure

What causes Poverty?

Decline in high skill high paying manufacturing jobs.
Increase in low skill low paying service jobs.

​Low-wage service jobs

White people are getting paid more for the same work as people of color.
Men are often paid more than women for the same work.

​Unequal treatment

What causes Poverty?

Your level of education can determine your income.

​Lack of Education

What causes Poverty?

Open Ended

Of all the discussed causes for poverty, which one do you think is the biggest contributor and why?

​Income distribution

​Lets analyze this distribution of wealth. ​Spend about 30 to a minute talking to a neighbor about what you think is happening in this graph. Be prepared to discuss your answers.

Lorenz Curve

​The Economic Goal of equity

The government spends billions of dollars on programs designed to reduce poverty.
This money is spent mainly on cash assistance, education, medical benefits, and non-cash benefits.
The goal is to ensure basic standard of living for all and to provide the poor an opportunity to improve their condition.

Poll

Do you believe the government does enough to provide equity for all people in this country?

• Yes

• No

• Welfare to Workfare provides basic needs for people. This is called TANF(Temporary Assistance for Needy Families). It has a 5 year limit and the states decide how they distribute it. They then transition to the workforce with government help.

• Education Programs from pre-school to college.

• Earned Income Tax Credit(EITC) is a refundable tax credit that low-income families with children receive when they file their federal income tax return

• Enterprise Zones are areas where companies can locate and be free of certain state, local, and federal taxes and restrictions.

Government help

Poll

Now that we've seen the ways the government helps in building equity, do you think the government does enough?

• Yes

• No

Multiple Choice

Define who is poor, according to the government standards

• Family who's total income is less than the amount to satisfy the family's minimum needs

• Family who's total debt is less than the amount to satisfy the family's minimum needs

• Family who's total income far exceeds the amount to satisfy the family's minimum needs

• Family who's total debt far exceeds the amount to satisfy the family's minimum needs

Multiple Choice

The POVERTY THRESHOLD is

• lowest amount of income that a family can make to maintain a basic standard of living

• highest amount of income that a family can make before they are considered rich

• lowest amount of taxes that the gov't can collect

• highest number of people in a family that is permitted by tax law

Multiple Select

A way to measure income inequality is..

• poverty rate

• welfare

• Lorenz Curve

• HS graduation rate