|United States Economy
Americans are proud of their economic system, believing it provides
opportunities for all citizens to have good lives. Their faith is
clouded, however, by the fact that poverty persists in many parts of the
country. Government anti-poverty efforts have made some progress but
have not eradicated the problem. Similarly, periods of strong economic
growth, which bring more jobs and higher wages, have helped reduce
poverty but have not eliminated it entirely.
The federal government defines a minimum
amount of income necessary for basic maintenance of a family of four.
This amount may fluctuate depending on the cost of living and the
location of the family. In 1998, a family of four with an annual income
below $16,530 was classified as living in poverty.
The percentage of people living below the
poverty level dropped from 22.4 percent in 1959 to 11.4 percent in 1978.
But since then, it has fluctuated in a fairly narrow range. In 1998, it
stood at 12.7 percent.
What is more, the overall figures mask
much more severe pockets of poverty. In 1998, more than one-quarter of
all African-Americans (26.1 percent) lived in poverty; though
distressingly high, that figure did represent an improvement from 1979,
when 31 percent of blacks were officially classified as poor, and it was
the lowest poverty rate for this group since 1959. Families headed by
single mothers are particularly susceptible to poverty. Partly as a
result of this phenomenon, almost one in five children (18.9 percent)
was poor in 1997. The poverty rate was 36.7 percent among
African-American children and 34.4 percent among Hispanic children.
Some analysts have suggested that the
official poverty figures overstate the real extent of poverty because
they measure only cash income and exclude certain government assistance
programs such as Food Stamps, health care, and public housing. Others
point out, however, that these programs rarely cover all of a family's
food or health care needs and that there is a shortage of public
housing. Some argue that even families whose incomes are above the
official poverty level sometimes go hungry, skimping on food to pay for
such things as housing, medical care, and clothing. Still others point
out that people at the poverty level sometimes receive cash income from
casual work and in the "underground" sector of the economy,
which is never recorded in official statistics.
In any event, it is clear that the
American economic system does not apportion its rewards equally. In
1997, the wealthiest one-fifth of American families accounted for 47.2
percent of the nation's income, according to the Economic Policy
Institute, a Washington-based research organization. In contrast, the
poorest one-fifth earned just 4.2 percent of the nation's income, and
the poorest 40 percent accounted for only 14 percent of income.
Despite the generally prosperous American
economy as a whole, concerns about inequality continued during the 1980s
and 1990s. Increasing global competition threatened workers in many
traditional manufacturing industries, and their wages stagnated. At the
same time, the federal government edged away from tax policies that
sought to favor lower-income families at the expense of wealthier ones,
and it also cut spending on a number of domestic social programs
intended to help the disadvantaged. Meanwhile, wealthier families reaped
most of the gains from the booming stock market.
In the late 1990s, there were some signs
these patterns were reversing, as wage gains accelerated -- especially
among poorer workers. But at the end of the decade, it was still too
early to determine whether this trend would continue.
Source: U.S. Department of State