CHAPTER 3
POVERTY

BACKGROUND

The federal government began measuring poverty in 1959. During the 1960s President Lyndon Baines Johnson declared a national war on poverty. Researchers realized that very few statistical tools were available to measure the number of Americans who continued to live in poverty in one of the most affluent nations in the world. In order to fight this "war," it had to be determined who was poor and why.

During the early 1960s Mollie Orshansky of the Social Security Administration suggested that the poverty income level be defined as the income sufficient to purchase a minimally adequate amount of goods and services. The necessary data for defining and pricing a full "market basket" of goods was not available then, nor is it available now. Orshansky noted, however, that in 1955 the U.S. Department of Agriculture (USDA) had published a "Household Food Consumption Survey," which showed that the average family of three or more persons spent approximately one-third of its after-tax income on food. She multiplied the USDA's 1961 economy food plan (a no-frills food basket meeting the then-recommended dietary allowances) by three.

Basically this defined a poor family as any family or person whose after-tax income was not sufficient to purchase a minimally adequate diet if one-third of the income was spent on food. Differences were allowed for size of family, gender of the head of the household, and whether it was a farm or nonfarm family. The threshold (the level at which poverty begins) for a farm family was set at 70 percent of a nonfarm household. (The difference between farm and nonfarm households was eliminated in 1982.)

Poverty Thresholds

The poverty guidelines set by the U.S. Department of Health and Human Services (HHS) are based on the poverty thresholds as established by the U.S. Bureau of the Census. The poverty thresholds, used for statistical purposes, are updated each year to reflect inflation. People with incomes below the applicable threshold are classified as living below the poverty level.

The poverty guidelines vary by family size and composition. For a family of four in 2004 the poverty guideline was $18,850 in annual income. A person living alone who earned less than $9,310 was considered poor, as was a family of eight members making less than $31,570. Notice, in Table 3.1, that the poverty level is considerably higher in Alaska and Hawaii, where the cost of living is higher than in the contiguous forty-eight states and the District of Columbia.

The poverty guidelines set by HHS are very important because various government agencies use them as the basis for eligibility to key assistance programs. HHS uses the poverty guidelines to determine Community Services Block Grants, Low-Income Home Energy Assistance Block Grants, and Head Start allotments. The guidelines are also the basis for funding the USDA's Food Stamp Program, National School Lunch Program, and Special Supplemental Food Program for Women, Infants, and Children (WIC). The U.S. Department of Labor uses the guidelines to determine funding for the Job Corps and other employment and training programs under the Workforce Investment Act. Some state and local governments choose to use the federal poverty guidelines for some of their own programs, such as state health insurance programs and financial guidelines for child support enforcement.

POVERTY—THEN AND NOW

Since the late 1950s, Americans have seen some successes and some failures in the battle against poverty. For the total population in 1959, 22.4 percent, or 39.5 million persons, lived below the poverty level. After an initial decline through the 1960s and 1970s, the poverty rate began to increase during the early 1980s, coinciding with

a downturn in household and family incomes for all Americans. The poverty rate rose steadily until it reached an eighteen-year high of 15.2 percent in 1983, a year during which the country was climbing out of a serious economic recession. The percentage of Americans living in poverty then began dropping, falling to 12.8 percent in 1989. After that, however, the percentage increased again, reaching 15.1 percent in 1993 (39.3 million people). It then dropped to 12.7 percent in 1998 (34.5 million) and continued to drop to 11.3 percent (31.1 million) in 2000; however, because the nation's economy slowed, the poverty rate took an upturn to 34.6 million in 2002, representing 12.1 percent of the population. Figure 3.1 provides a graphic depiction of the number of poor people and the poverty rates for years 1959 through 2002.

Analysts believe the overall decline in poverty is due to both the growth in the economy and to the success of some of the antipoverty programs instituted in the late 1960s; yet not all demographic subcategories have experienced the same level of change. For example, the poverty rate of those sixty-five years of age and older has dramatically improved from 35.2 percent in 1959 to 10.4 percent in 2002. For related children under eighteen years of age in black families, however, the improvement from 65.6 percent in 1959 to 46.3 percent in 2002 shows that antipoverty programs still have not reached many people in need. Table 3.2 gives the nation's poverty rates from 1959 through 2002 for people by categories of age, race, and ethnic background.

Race and Ethnicity

Poverty rates have been consistently lower for whites than for minorities. According to the U.S. Census Bureau in Poverty in the United States: 2000 (Washington, DC, 2001), in 1959, 18.1 percent of all whites, or 28.5 million people, lived below the poverty level. By 1970 the rate declined to 9.9 percent, about where it remained for the next ten years. In 1983 the percentage of whites living in poverty reached an eighteen-year high of 12.1 percent. By 2000 it had dropped to 9.4 percent (21.3 million people); in keeping with the overall rise in the poverty rate, the number of whites in poverty in 2002 increased to 10.2 percent (23.5 million people), according to the updated Poverty in the United States: 2002 (Washington, DC, 2003).

By contrast, according to Poverty in the United States: 2000, poverty rates for African-Americans declined from 55.1 percent (9.9 million) in 1959 to 33.5 percent (7.5 million) in 1970. In 1983 rates for African-Americans were 35.7 percent, still almost triple the rate for whites. In 2000, a year in which the American economy was very strong, over one-fifth (22.1 percent, or 7.9 million) of all African-Americans were poor. This percentage was the lowest recorded poverty rate ever for African-Americans. African-American children and older persons have been particularly affected by poverty. In 2002, 31.5 percent of African-Americans under eighteen years of age and 23.6 percent of African-Americans sixty-five years or older (as opposed to 19.7 percent of African-Americans aged eighteen to sixty-four years) were poor. (See Table 3.2.) In 2002 approximately 24 percent of African-Americans (between 8.6 and 8.9 million people) were poor, according to the U.S. Census Bureau.

It was not until 1972 that the U.S. Census Bureau added the ethnicity "Hispanic" to the categories for which it regularly records statistics. That year, according to Poverty in the United States: 2000, 22.8 percent of Hispanics in the United States lived below the poverty level. Between 1972 and 1985, the number of Hispanics living below the poverty level more than doubled, from 2.4 million to 5.2 million. Over this same period, the total Hispanic population rose from 10.6 million to 18.1 million. (Persons of Hispanic origin can be of any race.) The poverty rate among Hispanics reached 29.9 percent in 1982 and then dropped to 26.2 percent in 1989. The poverty rate reached 30.7 percent, its highest recorded point, in 1994, then dropped to 29.4 in 1996 and 21.2 (or 7.2 million) in 2000. In 2002 a large proportion (28.6 percent) of Hispanics under eighteen years of age and about one-fifth (21.4 percent) of those sixty-five years and older were poor. (See Table 3.2.) Overall, the U.S. Census Bureau reported that 21.8 percent of all Hispanics (approximately 8.5 million people) were poor in 2002.

According to the U.S. Census Bureau, the Asian and Pacific Islander (API) poverty rate in 2002 overall was 10.3 percent (or 1.3 million people). The rate was lower than it was in 1987, the first year that the Census Bureau kept statistics on Asians and Pacific Islanders, when 16.1 percent lived below the poverty level. See Table 3.2 for the breakdown of poverty rates by different age groups among APIs.

Although a far higher percentage of African-Americans and Hispanics than whites were poor, over half of the 41.8 million people who were poor in 2002 were non-Hispanic whites. In the same year, 55.9 percent of poor Americans were non-Hispanic whites, 20.5 percent were African-Americans, 20 percent were Hispanics, and 2.8 percent were Asians and Pacific Islanders.

Age

In 2002, 16.7 percent of children under eighteen years old were poor; this was a decline of 6 percentage points from 22.7 percent in l993. The percent of those ages sixty-five and older below the poverty line declined from 12.2 percent in 1993 to 10.4 percent in 2002. (See Table 3.3.) From 1959 to 2002 the number of people sixty-five years and older living in poverty dropped significantly, from about 35 percent to 10.4 percent. (See Figure 3.2.)

In 2002 more than one-fourth of the nation's poor were either under eighteen years of age (16.7 percent) or sixty-five years of age and older (10.4 percent). In comparison to the population above the poverty level, children were overrepresented among the poor, while the elderly were underrepresented. Children made up about 35 percent of the poor even though they represented only a little more than one-fourth (25.4 percent) of the total population. People over sixty-five years old made up 12 percent of the total population in 2002 but only 10.4 percent of the poor. (See Figure 3.2 and Table 3.4.) Most observers credit Social Security for the sharp decline in poverty among the elderly.

CHILD POVERTY. The child poverty rate, at 16.7 percent of the nation's children under the age of eighteen, was over twice the poverty rate for adults (7.8 percent) in 2002. Very young children were at the greatest risk of being poor. According to the National Center for Children

in Poverty, the United States has the highest rate of young child poverty of all Western industrialized nations.

In 2000 nearly 18 percent of children under the age of three lived in poverty, a decline from 27 percent in 1993. Nearly 45 percent of very young children living with a female householder (with no spouse present) were poor, compared to 9 percent of children under three years old living with families headed by a married couple. Poverty rates for African-American children under age three (35 percent) and Hispanic children under three (30 percent)

are three times higher than the rates for white children (10 percent).

Childhood poverty is a matter of great concern because strong evidence exists that poverty can limit a child's physical and cognitive development. According to the Children's Defense Fund report The High Price of Poverty for Children of the South (May 1998):

• Poverty is a greater risk to children's overall health status than is living in a single-parent family.
• Poor children are twice as likely as nonpoor children to be born weighing too little or to suffer stunted growth.
• Poor children suffer more mental and physical disabilities.
• Poverty makes children hungry. Hungry children are more likely to be hyperactive and to have serious behavior problems. They are four times more likely to have difficulty concentrating in school.
• Poor children score lower on reading and math tests and are twice as likely to repeat a year of school as nonpoor children.
• Poor children earn 25 percent lower wages when they become young adults.

Regions

In 2002 the Midwest had the lowest poverty rate (10.3 percent) among the nation's four regions, followed by the Northeast with 10.9 percent and the West with 12.4 percent. Poverty rates were highest in the South (13.8 percent). (See Table 3.3.)

Family Status

About one in every ten families (10.4 percent) in the United States was living in poverty in 2002. Families headed by married couples had the lowest poverty rate (5.3 percent). More than a quarter (26.5 percent) of all families with a female householder (no husband present) were living in poverty, a 1.8 percent increase since 2000. (See Table 3.3.)

BY RACE. According to the U.S. Census Bureau in Poverty in the United States: 2002, in 2002 non-Hispanic whites (8 percent) had a much lower poverty rate than African-Americans (24.1 percent) or Hispanics (21.8 percent). In addition, Hispanic and African-American female heads of household are at particularly high risk of poverty. While 20 percent of non-Hispanic white families headed by a female with no husband present were living in poverty in 2002, 38.2 percent of female-headed African-American families and 36.4 percent of female-headed Hispanic families were poor. Asian single mothers had the lowest poverty rate at 15.2 percent in 2002.

States

State poverty rates vary widely from year to year and should be used with caution when ranking the states for statistical purposes. However, on average, over the years 2000 through 2002, Connecticut, Maryland, Minnesota, New Hampshire, and New Jersey had the lowest poverty rates, while Arkansas, the District of Columbia, Louisiana, Mississippi, and New Mexico had the highest rates. (See Table 3.5.)

Work Experience

The probability of a family living in poverty is influenced by three primary factors: the size of the family, the number of workers, and the characteristics of the wage earners. As the number of wage earners in a family increases, the probability of poverty declines. The likelihood of a second wage earner is greatest in families headed by married couples.

About 5.7 percent of all Americans who worked in 2001 lived in poverty, compared to 39.7 percent of those who did not work that year. Approximately 42 percent of poor persons age sixteen and older worked at least some of the year, with 74 percent of them working twenty-seven weeks or more. Overall, 70.5 percent of people sixteen years old and over worked at least some of the year, and about 64 percent worked twenty-seven weeks or more. (See Table 3.6.)

Most poor children live in families where one or more adults work. However, millions of working parents are not able to earn enough to lift their families out of poverty—even those who work full-time all year. In the report A Hand Up: How State Earned Income Tax Credits Help Working Families Escape Poverty in 2001 (Washington, DC: Center on Budget and Policy Priorities, 2001), Nicholas Johnson reported that in 2000 approximately 4.4 million families with children in which the parents were not elderly or disabled had incomes below the federal poverty line. Of these families, three million (69 percent) had a working parent. (See Figure 3.3.)

Education

Not surprisingly, poverty rates drop sharply as years of schooling rise. The U.S. Bureau of the Census reported that in 2002 the poverty rate was 21 percent for persons who had not completed high school, 11.1 percent for those who had graduated from high school but had not gone to college, 8.0 percent for those with some college but less than a bachelor's degree, and 4.5 percent for those with a bachelor's degree or higher.

The general relationship between education and welfare applied for all races. However, there were some large differences among the races. For example, the 2002 poverty rates for African-American and Hispanic high school graduates age twenty-five and over who had not gone to college were 22.2 percent and 14.7 percent, respectively, while white graduates had a much lower poverty rate, 9.3 percent.

MEDIAN INCOME

In its surveys, the U.S. Bureau of the Census differentiates between households and families. A "household" is an individual living alone or a group of persons living together who may or may not be related, while a "family" is composed of two or more related individuals. All families are households, but not all households are families. In 2002 there were over 111.2 million households in the United States but only 75.5 million families. (See Table 3.7.)

Household Income

The median income (half the population earns less than this amount, and half earn more) for all households in 2002 was $42,409. African-American ($29,026) and Hispanic ($33,103) households had much lower median incomes than did non-Hispanic white households ($45,086) and API households ($52,626).

Family Income

In 2002 the median income for all families was $52,704. The median family income was 2.86 times the 2002 average poverty threshold of $18,400 for a family of four. Families headed by married couples of all racial and ethnic backgrounds enjoyed the greatest financial success (a median income of $61,254), with incomes 2.11 times that of female-headed households ($29,001). (See Table 3.7.)

Per Capita Income

In its annual Current Population Survey, the U.S. Census Bureau determines the per capita income in the United States. Per capita income is computed by dividing the total money income by the total population. In other words, it represents the amount of income that every man, woman, and child would receive if the nation's total earnings were divided equally among them. In 2002 the per capita income for all Americans was $22,794. The 2002 per capita incomes for different racial and ethnic groups were: non-Hispanic whites, $26,128; Asians and Pacific Islanders, $22,810; African-Americans, $15,441; and Hispanics, $13,487. Comparing the per capita income with the poverty level for a family of four in 2002 ($18,400) reveals that the poverty level for four people is less than the per capita income.

TAX RELIEF FOR THE POOR

Both conservatives and liberals hailed the Tax Reform Act of 1986 (PL 99-514) as a major step toward relieving the tax burden of low-income families, one group of Americans whose wages and benefits have been eroding since 1979. The law enlarged and "inflation-proofed" the

Earned Income Tax Credit (EITC), which provides a refundable tax credit that both offsets taxes and often operates as a wage supplement. Only those who work can qualify. The amount is determined, in part, by how much each qualified individual or family earned. It is also adjusted to the size of the family. To be eligible for the family EITC, workers must live with their children, who must be under nineteen years old or full-time students under twenty-four years old.

The maximum credit for 2003 was $2,547 for taxpayers with one child, $4,204 for taxpayers with more than one child, and $382 for persons with no children. Families get less if their income is very low because they are also eligible for public assistance. Working families with one or more children receive the maximum benefit if their earnings are at least $10,700, up to an adjusted gross income of no more than $14,600. Benefits phase down gradually when income surpasses $15,000 and phase out entirely for families with two or more children earning more than 33,000. (See Figure 3.4.)

The largest EITC benefits go to families that no longer need welfare. The gradual phaseout and the availability of the EITC at above-poverty income levels help to stabilize a parent's employment by providing additional money to cover expenses associated with working, such as child care and transportation. Research has found that the EITC has been an effective work incentive and has significantly increased work participation among single mothers.

Those who do not owe income tax, or who owe an amount smaller than the credit, receive a check directly from the Internal Revenue Service (IRS) for the credit due them. Most recipients claim the credit when they file an income tax form. The EITC lifted more than 4.8 million people, including 2.6 million children, out of poverty in 2003.

Although the Tax Reform Act of 1986 has helped ease the burden of federal taxes, most of the poor still pay a substantial share of their income in state and local taxes. To relieve this tax burden, seventeen states have enacted a state EITC; sixteen states base EITCs on the federal credit. These state programs boost the income of families that move from welfare to work and prevent states from taxing poor families deeper into poverty.

HOW ACCURATE IS THE "POVERTY LEVEL"?

Almost every year since the U.S. Bureau of the Census first defined the poverty level, observers have been concerned about the accuracy of the estimated poverty level. The figure had been based on the finding that the average family in the mid-1950s spent about one-third of its income on food. That figure was multiplied by three to allow for expenditures on all other goods and services. This represented the after-tax money income of an average family relative to the amount it spent on food. Since 1965 the poverty threshold has been adjusted each year only for inflation.

Since that time, living patterns have changed, and food costs have become a smaller percentage of family spending. For example, the U.S. Bureau of Labor Statistics, in its Consumer Expenditures in 2000 (Washington, DC, 2001), reported that in 2000 the average family spent 13.6 percent of its total expenditures on food, while housing accounted for about one-third (32.4 percent) of family spending. Based on these changes in buying patterns, should the amount spent on food be multiplied by a factor of seven instead of three? Or should the poverty level be based on housing or other factors? What about geographical differences in the cost of living?

The proportion of family income spent on food is not the only change in family living since the 1950s. Both parents in a family are far more likely to be working than they were a generation ago. There is also a much greater likelihood that a single parent, most likely a mother, will be heading the family. Child-care costs, which were of little concern during the 1950s, have become a major issue for working mothers and single parents at the beginning of the twenty-first century.

Critics of the current poverty calculations tend to believe that the poverty levels have been too low, since they are based on a fifty-year-old concept of American life that does not reflect today's economic and social realities. Most feel the poverty level should be raised, probably to about 130 to 150 percent of the current levels. A 1989 study prepared by the Joint Economic Committee of Congress cited the example of a working mother with two children earning an income at the poverty level who spends $50 per week on child care and no more than 30 percent of her earnings on housing. (This is the proportion that the U.S. Department of Housing and Urban Development [HUD] has established as the basic affordability standard.) In this particular example, 30 percent of her income would equal about $226 a month for rent and utilities. Unless this woman lived in public or subsidized housing (more than two-thirds of the poor do not live in public or subsidized housing), finding an apartment for her family under this budget would be very hard. If she spent a bare minimum on food, she would have about $30 left after taxes. This $30 would have to cover medical care, clothing, personal care items, and an occasional ice cream cone for her two children.

Some are concerned because the poverty threshold is different for elderly and non-elderly Americans. When the poverty threshold was first established, it was thought that older people did not need as much food. Therefore, the value of their basic food needs was lower. Consequently, when this figure was multiplied by three to get the poverty rate, it was naturally lower than the rate for non-elderly people. (The U.S. government, however, uses the poverty rate for non-elderly Americans when determining the eligibility for welfare services for all people, including the elderly.) Critics point out that while the elderly might eat less than younger people, they have greater needs in other areas, which are not considered when their food needs are simply multiplied by three. Probably the most notable difference between the needs of the elderly and non-elderly is in the area of health care. The Bureau of Labor Statistics, in Consumer Expenditures in 2000, found that while the total population interviewed spent about 5.4 percent of their income on health care, those over sixty-five years of age spent 12.2 percent. These critics feel that the poverty level should be the same for everyone, no matter what their age.

A 1995 report prepared by the National Research Council's Panel on Poverty and Family Assistance raised several important issues regarding poverty thresholds or measurement of need. The panel recommended that new thresholds be developed, using consumer expenditure data to represent a budget for basic needs: food, clothing, shelter (including utilities), and a small allowance for miscellaneous needs. This budget would be adjusted to reflect the needs of different family types and geographic differences in costs. Research and discussion continue on these issues.

How Should Income Be Defined?

The Panel on Poverty and Family Assistance also recommended that family resources be redefined to reflect the net amount available to buy goods and services in that budget for basic needs. Critics have pointed out that the definition of income used to set the poverty figure is not accurate because it does not include the value of all welfare services as income. If the value of these services were counted as income, they believe the proportion of Americans considered to be living in poverty would be lower.

In the 1990s the Census Bureau developed several experimental methods of estimating income for evaluating poverty levels, but the bureau has had considerable difficulty determining the value of many of these subsidies. For example, the bureau first tried to consider Medicare and Medicaid at full market value (this meant taking the total amount of money that the government spent on medical care for a particular group and then dividing it by the number of people in that group). The value often was greater than the actual earnings of the low-income family, which meant that, although the family's total earnings may not have been enough to cover food and housing, adding the market value of Medicare or Medicaid to its earnings put the family above the poverty threshold.

This did not make much sense, so the Census Bureau began trying a "fungible value" (giving equivalent value to units) for Medicare and Medicaid. When the bureau measures a household's income, if the earners cannot cover the cost of housing and food, Medicare and Medicaid are given no value. However, if the family can cover the cost of food and shelter, the Census Bureau figures the difference between the household income and the amount needed to meet basic housing and food costs. It then values the health services at this difference (up to the amount of the market value of the medical benefits). This is very complicated, but the Bureau of the Census believes it gives a fair value to these services. Similar problems have developed in trying to determine the value of housing subsidies, school lunches, and other benefits.

Still other observers point out that most income definitions do not include assets and liabilities. Perhaps the poor household has some assets, including a home or car, that could be converted into income. One experimental definition of income includes capital gains on earnings, although it seems to make little difference—about 90 percent of all capital gains are earned by those in the upper fifth of the earnings scale. Including assets generally means little, since the overwhelming majority of poor families have few financial assets. The Bureau of the Census reports that more than half the poor have no assets at all and about four-fifths have assets of less than $1,000, a relatively insignificant amount from which to earn income.

Another major issue is the question of income before and after income taxes. While the Tax Reform Act of 1986 (PL 99-514) removed most poor households from the federal income tax rolls, many poor households still pay state and local taxes. Naturally, some critics claim, the taxes paid to local and state governments are funds that are no

longer available for feeding and housing the family and, therefore, should not be counted as income.

Table 3.8 lists the various experimental definitions for income that the Bureau of the Census has considered. Table 3.9 shows the effects of selected definitions on the poverty rate.

HUNGER IN AMERICA

When thinking of the consequences of poverty, people often visualize the poor being badly housed or, in the worst case, homeless, instead of people not having enough to eat. While it may be hard to imagine some Americans not having enough to eat, many Americans go to bed hungry or experience times when there is not enough food for the family.

During the 1980s a growing number of studies found that Americans, especially children, were suffering from hunger. Many observers did not believe these reports or thought they had been exaggerated. In 1984 a Task Force on Food Assistance appointed by President Ronald Reagan found that it could not "report definitive evidence on the extent of hunger" because there was no agreed-upon way to measure hunger.

To determine the extent of hunger in the United States, the Food Research and Action Center (FRAC) in Washington, D.C., an advocacy group for the poor, released the findings of the Community Childhood Hunger Identification Project (CCHIP). In this first FRAC survey, interviews were conducted in 2,335 households with incomes at or below 185 percent of poverty and with at least one child under twelve years of age. The results of this survey, released in 1991, indicated that 32 percent of U.S. households with incomes at or below 185 percent of the poverty level were hungry. At least one child out of every eight under twelve years of age suffered from hunger. Another 40 percent of low-income children were at risk for hunger.

Between 1992 and 1994 FRAC sponsored the second round of CCHIP surveys in nine states and the District of Columbia (5,282 low-income families with at least one child age twelve or under). For the purposes of its report, FRAC defined hunger as food insufficiency—skipping meals, eating less, or running out of food—that occurs because of limited household resources. The results were reported in Community Childhood Hunger Identification Project: A Survey of Childhood Hunger in the United States (Washington, DC, 1995).

Based on the findings of the second CCHIP surveys, FRAC concluded that about four million children age twelve and under experienced hunger in some part of one or more months during the previous year. Another 9.6 million children were at risk of becoming hungry.

The CCHIP survey studied one child in each household (the child with the most recent birthday) and found that, in comparison with nonhungry children, hungry children were:

• More than three times as likely to suffer from unwanted weight loss.
• More than four times as likely to suffer from fatigue.
• Almost three times as likely to suffer from irritability.
• More than three times as likely to have frequent headaches.
• Almost one and a half times as likely to have frequent ear infections.
• Four times as likely to suffer from concentration problems.
• Almost twice as likely to have frequent colds.

Based on the findings from CCHIP, FRAC concluded that although federal food programs are targeted to households most in need, a common barrier to program participation is a lack of information, particularly about eligibility guidelines. FRAC believes that if federal, state, and local governments made a greater effort to ensure that possible recipients were aware of their eligibility for food programs, such as Women, Infants, and Children (WIC) and the School Breakfast Program, there would be a large drop in hunger in the United States.

In 1997 the Urban Institute conducted the National Survey of American Families (NSAF). Nearly half of low-income families (those with family incomes up to 200 percent of the federal poverty line) who were interviewed in 1997 reported that the food they purchased ran out before they got money to buy more or they worried they would run out of food. Four out of five of these families with food problems reported suffering actual food shortages, and one out of five worried about food shortages. More children than adults lived in families that worried about or had trouble affording food, so that 54 percent of low-income children experienced the problem. The NSAF was repeated in 1999, and families reported fewer problems affording food than in 1997. Four in ten low-income families were either concerned about or had difficulty affording food, down 10 percent from 1997. However, approximately half of all low-income children still lived in families with difficulties affording food or concern about lack of food. A third NSAF was conducted in 2002, with results to be released in late 2004.

Since 1995 the Food and Nutrition Service of the U.S. Department of Agriculture (USDA) and the U.S. Census Bureau have conducted annual surveys of food security, food insecurity, and hunger. (Food-secure households are those that have access at all times to enough food for an active, healthy life. Food-insecure households are uncertain of having, or unable to acquire, enough food to meet basic needs at all times during the year.) The survey is based on an eighteen-item scale:

1. Worried food would run out before (I/we) got money to buy more
2. Food bought didn't last and (I/we) didn't have money to get more
3. Couldn't afford to eat balanced meals
4. Adult(s) cut size of meals or skipped meals
5. Respondent ate less than felt he/she should
6. Adult(s) cut size or skipped meals in three or more months
7. Respondent hungry but didn't eat because couldn't afford
8. Respondent lost weight
9. Adult(s) did not eat for whole day
10. Adult(s) did not eat for whole day in three or more months
11. Relied on few kinds of low-cost food to feed child(ren)
12. Couldn't feed child(ren) balanced meals
13. Child(ren) were not eating enough
14. Cut size of child(ren)'s meals
15. Child(ren) were hungry
16. Child(ren) skipped meals
17. Child(ren) skipped meals in three or more months
18. Child(ren) did not eat for whole day

Figure 3.5 shows that the food insecurity (uncertainty over acquiring sufficient food) and hunger have risen steadily since 1999. The number of food-insecure households rose from about 9 percent to 11.1 percent of U.S. households, and the prevalence of hunger rose from about 3 percent in 1999 to 3.5 percent in 2002. In 2002, 11.1 percent of households reported food insecurity at some time during the year, and 3.5 percent reported being hungry. (See Figure 3.6.)

Low-income households were more likely to experience food insecurity and hunger during the year. More than 14 percent of households below the poverty line reported being hungry at some time during 2002, about 3.5 times the rate in the general population. (See Figure 3.7 and Table 3.10.)

Families headed by married couples are much less likely to experience food insecurity than families headed by single females; 10.4 percent of married-couple households and 32 percent of female-headed households reported food insecurity in 2002. Food insecurity is also more prevalent among African-American families, 22 percent of whom experience food insecurity, and Hispanic families, 21.7 percent of whom experience food insecurity, than among non-Hispanic whites, 8 percent of whom experience food insecurity. (See Table 3.10).

GROWING DEMAND FOR EMERGENCY FOOD ASSISTANCE

Second Harvest National Research Study

America's Second Harvest is the nation's largest charitable hunger-relief organization, serving 23.3 million persons per year. In 2001 Mathematica Policy Research conducted a landmark study of the Second Harvest network by means of interviews with 32,000 clients and 24,000 questionnaires from local agencies. The findings are reported in Hunger in America, 2001 National Report (Myoung Kim, Jim Ohls, and Rhoda Cohen, Princeton, NJ, 2001). The study found the following characteristics of recipients of emergency food assistance:

• More than 23.3 million people sought emergency food assistance in 2001: 21.3 million at food pantries, 1.3 million at kitchens, and 0.7 million at shelters. Of the adult clients who visited emergency food programs in 2001, approximately 61.6 percent were female, 38.3 percent male.

• More than a third (38.9 percent) of all emergency client households had at least one member working.
• Sixty-four percent of the households have incomes at or below the poverty level.
• Assistance from government welfare programs (TANF, general assistance, and Supplemental Security Income) was the main source of income for 15.9 percent of all clients. Other government assistance (social security, workers' compensation, and unemployment compensation) was the main source of income for 30.5 percent of clients.
• Some 44.9 percent of recipients at all program sites were white; 35.4 percent, African-American; 16.7 percent, Hispanic; and 4.8 percent, Native American/Alaskan Native.
• Almost two-thirds (62.8 percent) of clients are high school graduates.
• Almost two-thirds (63.9 percent) of clients have applied for and 29.8 percent currently receive food stamps. See Figure 3.8 for an analysis of the use of food stamps by type of food program.
• Ten percent of all clients are homeless. Thirty-six percent reported having to choose between paying for food and paying their rent or mortgage. Figure 3.9 shows the housing situation for pantry, kitchen, and shelter clients.
• Twenty-nine percent reported that at least one household member was in poor health.

Over half of the agencies surveyed reported an increase in the number of clients serviced at program sites since 1998.

U.S. Conference of Mayors Status Report

Since 1982 the U.S. Conference of Mayors has conducted an annual survey of hunger and homelessness in U.S. cities. The 2002 survey focused on twenty-five cities and indicated a growing demand for emergency food assistance. The Status Report on Hunger and Homelessness in America's Cities: 2002 (Washington, DC: U.S. Conference of Mayors, 2002) reported that demand for emergency food assistance had increased by an average of 19 percent from the previous year in all twenty-five of the cities surveyed. Demand for emergency food among families with children increased 17 percent. Thirty-eight percent of persons requesting emergency food assistance were employed. The causes of hunger, according to officials in the surveyed cities, included low-paying jobs, unemployment, high housing costs, and weakening of the economy.

POVERTY.

As an idea, poverty has had an eventful history. From roughly the eighteenth century onward, a change in moral sensibility caused a shift in the understanding of poverty as being an ideal state (for both individuals and communities) to being an execrable condition that societies should seek to ameliorate. In the twentieth and twenty-first centuries, with the growth of social welfare programs, intense academic debate has focused on the meaning and definition of the term. These debates, though they now dominate the discussion of poverty, nevertheless echo earlier discussion surrounding poor laws and social administration. This article will chart the development in sensibilities and attendant evaluations and then consider how the "problem of poverty" was framed and how it has manifested itself in contemporary debates.

Poverty as an Ideal

There is a long-standing discourse within which poverty has a positive moral connotation. Facets of this discourse are delineated below.

Self-control.

With respect to the idea of poverty as a voluntary condition, two emphases can be identified. The first of these is exemplified by Stoicism, in thinkers such as Seneca (4 b.c.e.?–65 c.e.) and Epictetus (c. 55 c.e.–135 c.e.), but is equally manifest in the ascetic tradition in Christianity and other religions. Here, like its contextual close-relations, simplicity, austerity, and severity, poverty refers to the estimable practice of temperance and continence. To live the simple life of poverty in this sense is to be in control of oneself and thus of one's actions; it is to know the true and proper value of things and to be in a position of forswearing temptations, that is, things of illusory value. The second emphasis is more civic and is embodied, though commonly retrospectively as some lost ideal, in Sparta or ancient Rome or the earliest Christian communities. One consequence, common to both emphases, of situating poverty in this lexicon is that it is a product of choice or will or reason. Thus understood it is possible to draw a conceptual distinction between poverty as a self-imposed voluntary state and being impoverished (or necessitous; that is, having no choice).

Accompanying this idealized or moralized use of poverty is a hierarchical division between reason and desire. The Greek philosopher Aristotle (384–322 b.c.e.) established the core principle when in The Nicomachean Ethics he distinguished those (the enkratic ) who exhibit discipline and act from choice not from "desire" from those (the akratic ) who lack discipline and who, as a result, pursue bodily pleasures excessively. The notion of "excess" is crucial. There is a natural norm that ought not to be transgressed. Hence, in line with this principle, the virtue of poverty is expressed by the individual who, in the light of a rational apprehension of the natural order, self-disciplines desires so that indulgence is forsworn. So the Stoic sage will drink but not get drunk and one informed with patristic teaching will forgo sex with (or as) a pregnant woman. Of course, the body has needs that must be satisfied but there is also a natural or rational limit to this satisfaction—hence only drink when thirsty and only have sex for the sake of conception. Similarly, in the civic emphasis, the virtuous citizens of Rome's early years, for example, were portrayed as exhibiting personal poverty while dedicating their resources to public monuments.

This idea of self-control, of poverty as a voluntary state, played an important role in Christian teaching and practice. In part this was negative. As St. Thomas Aquinas (c. 1224–1274) expressed it in Summa contra gentiles, poverty is commendable because it frees a man from "worldly solicitude." The more positive aspect, as also articulated by Aquinas, was that those who embraced voluntary poverty did so to follow Christ and "be useful to their community." While community here refers to society at large, perhaps, the most distinctive Christian contribution has been the establishment of institutions that explicitly identify poverty as their rationale.

Monasticism.

Institutions embracing poverty, generically known as monasteries, took their inspiration from a view of the early life of the Christians, who, expecting an imminent Second Coming, withdrew from worldly contact and tried to live a simple Christ-like life. But the eventual establishment of Christianity as the legal religion of Rome by the Emperor Constantine in the Edict of Milan (313) led to a reaction and an attempt to re-create the ideal of poverty. This appeared first in Eastern (or Orthodox) Christianity as initially individuals, then communities, fled to the deserts of Egypt. The principles of life in such communities became codified and the most influential "code" was issued by St. Basil (c. 329–379 c.e.), the archbishop of Caesaria. His Rules established the goal of monastic life—jointly to practice the Christian virtues of chastity, poverty, and sharing the common goods of the monastery. These ideas spread into western (or Latin) Christianity through the medium of (among others) St. Ambrose (339–397), who had himself spent time in the Palestinian desert. The western equivalent to Basil was St. Benedict (480–547) who also laid down his Rule. This went into great detail about monastery life, not only specifying meal times but also how much can be consumed and the proper conduct while doing so. While not strenuously ascetic the monks are instructed to chastise the body, to love fasting and not become addicted to pleasures. They should also relieve the poor. This command seemingly acknowledges that for some, poverty was not a voluntary state.

Voluntary and involuntary poverty.

The canon lawyer Huguccio of Pisa (d.1210) elaborated upon the distinction between voluntary and involuntary poverty. In his commentary (1188) on Gratian's Decretum (c. 1140), the primary canon law text, Huguccio divided the poor into three categories. There were those who while born poor willingly endured this state as an expression of their love of God, and there were those who deliberately surrendered their possessions that they might live a virtuous Christian life. Both of these exemplified voluntary poverty. The third category, however, comprised those who were destitute and liable to be inhibited from achieving the higher moral values. This was involuntary poverty. However, the thrust here is on the involuntary poor being inhibited; as the first category demonstrates, the dominant sensibility was that poverty was not of itself an evil to be extirpated. Indeed, Stoic echoes can still be heard in Huguccio's explicit identification of this category with those who are poor because they are filled with the "voracity of cupidity" (quoted in Tierney, p. 11).

Change and renewal.

It is a notable characteristic of the ideal state of poverty that it represented a pristine condition from which any change was a deterioration. This resulted in a recurrent motif of regeneration or a return to "basics." The Roman moralists treated the history of Rome in this manner. Livy (59 b.c.e.–17 c.e.) prefaced his History with the judgment that no republic, in its origin, was greater or more virtuous, because then poverty and thrift were honored, but, now, it has been brought to ruin by the introduction of luxury and avarice. Since, for Livy, history is valuable because of the lessons it imparts then this judgment in this context makes his purpose clear. He was here following the lead of (among others) Sallust (86–35 or 34 b.c.e.), who, in his The Conspiracy of Catiline (43 b.c.e.), used polemically and not disinterestedly the corruption associated with that conspiracy (64 b.c.e.) to contrast the rampant love of luxury and riches with the original dedication of the Romans to the public good, as seen in their courage, their lavish treatment for the gods, and their domestic frugality. This motif was to recur. Niccolò Machiavelli (1469–1527), in what is ostensibly a commentary on Livy, declares that the way to renew a corrupt state of affairs is "to bring them back to their original principles." And, as his version of the story of Cincinnatus makes plain, these principles were designed to keep the Roman citizens poor.

According to Machiavelli, religious, as well as political institutions, are liable to fall into corruption. It was certainly a feature of monasticism that it was continually being renewed. If one monastic order appeared to become lax, another more rigorous one was established. Given that a frequently identified source of this laxity was wealth, then these new (or renewed) orders laid emphasis on being truer to the founding ideals of poverty. Hence the Cistercian order, founded in 1098, though decisively developed by St. Bernard (1090–1153) in his Apologia (1127), was based on the original (ascetic) Rule of St. Benedict. But even the Cistercians accumulated wealth.

In the thirteenth century orders of mendicant friars were established, who being without ties to a particular institution were thought more likely to escape the accumulation and trappings of wealth. The Franciscan order, founded by St. Francis of Assisi (1181 or 1182–1226), was based on a re-created ideal of apostolic poverty (so begging was preferred to having money) and, the other great order, the Dominicans followed suit, if less wholeheartedly (always allowing for example the personal ownership of books). The adoption of these principles did not preclude, in due course, extensive intellectual debate between the two orders on the meaning of "property," in which Aquinas (a Dominican) participated vigorously. At the end of the thirteenth and beginning of the fourteenth century, the so-called spiritual wing of the Franciscan order, under the influence of the writings of John Peter Olivi, insisted on an extreme interpretation of voluntary poverty. Their open conflict with the more moderate "conventuals" led to the suppression of the spiritual party by Pope John Paul XXII. These ideals and practices are not confined to Christianity. Most of the world's religious and ethical systems adopt a similar range of attitudes. For example, one of the five great vows of Jainism is aparigraha, meaning nonpossession or nonattachment to material things (including people). Their monks (and nuns) follow this vow strictly and totally—they are permanently naked and eat only once a day—but even lay members try to follow the vow as far as they can, hence for example, they undergo prolonged fasts. Buddhism is less austere; only in the special cases of holy persons should poverty be deliberately cultivated. In Islam the emphasis is, perhaps, less on individual self-control than on responsibility toward the poor. It is a recurrent injunction in the Koran that the poor rate should be paid, and it is a mark of the unrighteous that they do not feed the poor. Often too, here, there is the periodic call to abandon current corruptions and return to the purity of the original state and in Islam's case this gathered political momentum in the later decades of the twentieth century.

Changing Conceptions of Poverty

The most far-reaching call for spiritual renewal was the Reformation, which characterized European Christendom in the sixteenth century. Martin Luther (1483–1546), himself a monk, inveighed against the corruption of Christian practice and advocated a return to a more austere theology. But, as argued in Max Weber's (1864–1920) classic work The Protestant Ethic and the Spirit of Capitalism (1904), perhaps more strikingly, the Reformation fostered a view of salvation that associated it with industry or work in conjunction with a worldly asceticism. A corollary of this was to associate indolence with lack of virtue. While this applied to the "idle rich" it also encompassed "beggars and vagabonds," whose poverty became presumptive evidence of their wickedness. Voluntary poverty now takes on a negative character, a "popish conceit," as the English Puritan theologian William Perkins (1558–1602) called it. Nonetheless, Perkins also held that poverty should be seen as providential and even those whose "calling" requires the performance of "poore and base duties" will not be base in the sight of God, if they undertake those duties in obedient faith to the glory of God.

This idealization of poverty was undermined by the Scottish philosopher David Hume (1711–1776), who explicitly criticized those he called "severe moralists" (he named Sallust as an example). These individuals are those who uphold the virtue of poverty, which they typically contrast with the vice of luxury. Hume subverted this contrast. By understanding poverty not as virtuous austerity but as necessitousness then (and this is his main aim here) luxury can lose its negative (moralized) meaning. The effect of this is to associate "ages of refinement," or luxury, with happiness and positively with virtue. Luxury nourishes commerce and this both reduces destitution and augments the resources available for amelioration.

He, therefore, who keeps himself within the bounds of nature will not feel poverty; but he who exceeds the bounds of nature will be pursued by poverty even though he has unbounded wealth.

source: Seneca, To Helvia on Consolation.

This argument was influentially developed by the Scottish economist Adam Smith (1723–1790). By being "blessed" by opulence, the members of a commercial society are able to enjoy a far better standard of living than those in earlier ages. In material terms their basic needs of food, shelter, and clothing are better and more adequately met. Beyond this, human relationships are more humane. This enhanced "quality of life" extends beyond "goods" or things to relationships. In the introduction to his text An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Smith says that the inhabitants of "savage nations of hunters and fishers" are "miserably poor," so that, as a consequence, "they are frequently reduced or, at least, think themselves reduced, to the necessity sometimes of directly destroying and sometimes abandoning their infants, their old people and those afflicted with lingering diseases, to perish with hunger or to be devoured by wild beasts." This is a powerful and important argument. Contrary to Stoic "frugality" or Christian asceticism, or Algernon Sidney's (1622–1683) characteristic neo-Stoic, or civic republican, view that poverty is "the mother and nurse of … virtue," Smith is firmly repudiating any notion that poverty is ennobling or redemptive; a life of necessity now signifies not the austere life of poverty but an impoverished one, a life of misery. And since the abundance that commerce brings is precisely such an improvement, then Smith's repudiation of the nobility of poverty is a key factor in his vindication of "modern" commercial society.

Smith is, perhaps, now best known for developing an economic theory that relied, in circumstances of "freedom and security," on the "natural effort of every individual to better his own condition" in order to carry society to "wealth and prosperity." This "effort," moreover, was capable of "surmounting a hundred impertinent obstructions with which the folly of human laws too often incumbers its operations." An example of such a folly is the English Poor Law, which, on Smith's reading, by prohibiting the mobility of labor, inhibited the spread of commerce and thence of the affluence that was the most effective remedy for poverty. Smith similarly berates the mercantilist advocacy of "low wages." In Fable of the Bees, the Dutch-born english essayist Bernard Mandeville (1670–1733)—admittedly an extreme case, a position he artfully cultivated—wrote that the poor are to be "well-managed," so that while they should not starve yet they "should receive nothing worth saving." This argument for what E. Furniss called the "utility of poverty" was rejected by Smith, who declared unambiguously in The Wealth of Nations that "no society can be flourishing and happy of which the greater part are poor and miserable," (just as Hume had earlier stated, in "Of National Characters, " that "poverty and hard labour debase the minds of the common people."

The change in sensibilities that the work of Hume and Smith represents comes to dominate. With the advent of the industrial revolution, the apparent confidence that Smith exhibited in the workings of commerce to improve the lot of the poor seemed increasingly complacent. The condition of the "working class" (as they became known) prompted a range of responses. What they shared was a moral revulsion at the dreadful circumstances in which the poor lived. Important work was done to document just how awful these conditions in fact were. Friedrich Engels' (1820–1895) Condition of the Working Class in England (1845) was a pioneer study and the seventeen-volume Life and Labour of the People in London (1891–1903) of Charles Booth (1840–1916) and Seebohm Rowntree's (1871–1954) study of York were prototype social surveys documenting the lives of the poor. Poverty gradually became in this way a topic of social science—something to be measured and statistically analyzed. But it never lost sight of its origins in moral disquiet. Rowntree, for all his deliberate attempt to "state facts," declared the finding that a quarter of his survey lived below the poverty line, in a time of unexampled prosperity, may cause "great heart-searching" (p. 304). Hence, while emphases differed, this shared moral concern prompted a search for remedies. Karl Marx (1818–1883) is the best-known analysis of capitalism. He argued that the increasing (relative) misery of the proletariat was caused by capitalism. Marx is equally recognized (if only because of the subsequent revolutions that evoked his name) for his advocacy of communism as a solution. Poverty was thus for him symptomatic; for others it was more central. Some, like Pierre-Joseph Proudhon (1809–1865), while criticizing the destructive competitiveness of capitalism, even reinvoked the moral ideal of poverty. Marx was, however, scathing of the contemporary attempts to deal with the "problem of the poor," which he alleged located the source of the problem in the poor themselves.

Such poverty is therefore commendable when a man being freed thereby from worldly solicitude, is enabled more freely to occupy himself with divine and spiritual things yet so as to retain the possibility of lawfully supporting himself, for which purpose not many things are needful. And according as the manner of living in a state of poverty demands less solicitude, so much the more is poverty to be commended: but not according as the poverty is greater.…

For those who embrace voluntary poverty ought to hold temporal things in contempt … [and who] in order to follow Christ renounce all things precisely that they may be useful to the community since by their wisdom, learning and example they enlighten the people and sustain them by their prayers and intercession.

source: St. Thomas Aquinas, Summa contra gentiles.

The Problem of the Poor

The "problem of the poor" was always one of a threat to social order and thus always had a political dimension. For example, in Aristotle's classification of constitutions in The Politics, democracy was identified as a perverse form, since it was rule by the "many" for the good of the many (not "all"). The many are immediately said to be the poor. This association between the poor and inferior political order endured. The "mob" was perceived as an ever present threat and European history has been marked by the recurrent eruptions of urban riots and peasant uprisings.

One of the striking things about the ideal of poverty was that very often in practice it served to underwrite a hierarchical status quo. For example, innumerable sumptuary laws were passed in the Roman republic and empire, and all European "states" followed suit throughout the early modern period. This legislation sought to preserve the extant social pecking-order, to attempt to confine the incidence of a good and prevent its diffusion. Luxury, "new" wealth, always threatened to overturn this hierarchy; Hume's defense of luxury, as part of his reconfiguration of poverty from ideal to a state of necessitousness, was a critique of this rationale. From the "ideal" perspective, those in the lower ranks of these societies may well want some of those privileged goods but that "wanting" was a mark of their unworthiness; their lack of the requisite self-control, and if self-control is lost then the stability of the social order is under threat. Hume's view contains a rebuttal of that disparagement. In so doing he was representing the "modern" view of human nature. Humans are motivated by their desires and the work of reason is not to control these but to steer them effectively. It is this same understanding of the effective springs of human motivation that underpins the shift in moral sensibilities that displaced the ideal view of poverty by one which conceived of it as state of material distress.

Poor laws.

Sumptuary laws were only indirectly concerned with the question of the poor and poverty. More overt measures were undertaken. A petition to the English Parliament of 1376 linked poverty with idleness and criminality. This was before the English Peasants' Revolt of 1381, which had been preceded by an uprising in France in 1358, and there were similar revolts in Florence in 1378 and the Low Countries in 1382. In early modern Europe, attempts were made to deal with poverty administratively. The Elizabethan Poor Law (1601), which Perkins, in Treatise of the Vocations, called an "excellent statute" and "in substance the very law of God," charged each parish with the responsibility to support their own poor. Adam Smith put its origin down to Henry VIII's dissolution of the monasteries, which had previously been the major source of charitable relief for the impoverished and destitute. This law was revisited over the years. The Act of Settlement of 1662 enabled parishes to eject immigrant paupers—ostensibly to counteract inequality of provision. The whole system was overhauled in 1834 after a royal commission into the Poor Laws. The new poor law nonetheless retained the basic distinction, made by Perkins and other advocates of the original poor law, between the deserving poor who worked (independent laborers) and the undeserving who were dependent on "public largesse" (paupers, sturdy beggars). The latter were less "eligible" for relief than the former; that is, the relief had to be less attractive than that available to even the poorest laborer (otherwise there would be no incentive to work). The tenability of the distinction was assailed from its origins, and a further commission in 1909 was divided in its recommendations. The majority view still distinguished between unwilled and willful incapacity and saw an important role for charity. The minority view, led by Beatrice Webb (1858–1943), an early leader of the Fabian Society, which published a cheap and best-selling version of her "view," wanted a radical break with the past both administratively and with respect to the principle that the causes of poverty lay in individuals (in some moral defect) rather than having a social origin. With the emergence of explicitly welfare states in the second half of the twentieth century the basic thrust of the minority view was implemented.

I am forced to admit that [my description] instead of being exaggerated … is far from black enough to convey a true impression of the filth, ruin and uninhabitableness … and such a district exists in the heart of second city of England [Manchester], the first manufacturing city of the world.… Everything which here arouses horror and indignation is of recent origin, belongs to the industrial epoch … [which] alone enables the owners of these cattlesheds to rent them for high prices, to plunder the poverty of the workers, to undermine the health of thousands in order that they alone may grow rich.

source: Friedrich Engels, The Condition of the Working Class in England, 1845.

Polizei.

Because Britain was the most advanced industrial society, it is there that many of the issues surrounding the problem of poverty were articulated and why so many British sources and experience figure so prominently in its history. Britain, however, had no monopoly. The French, for example, had a system of hôpiteux and the Dutch spinhausen, which functioned like English workhouses, although the parish-based localism of the English system was distinctive. While most of the associated literature dealt with practical issues, such as curbing the spread of begging, there were more theoretical treatments. Prominent among these is the systematic development by a group of theorists, known as the cameralists, of the notion of Polizei (police). The task of the Polizei was to care for the "order, security and welfare of subjects" (the German philosopher and administrator Johann Justi [1720–1771], quoted in Knemeyer). The Prussian code of 1794 institutionalized the idea, and the best-known theoretical appropriation of the term was by Georg Wilhelm Friedrich Hegel (1770–1831), who used the idea of Polizei to refer, in general, to the administration of the contingencies of "civil society" (bürgerliche Gesellschaft ) and included, more particularly, therein an examination of the question of "modern poverty." What is "modern" is not being destitute but in having a "disposition" toward one's plight, attributing it (say, a failed harvest) not to fate or God's punishment but to a social cause. This attitude to poverty breeds what Hegel calls a "rabble" (die Pöbel ) and he is, uncharacteristically, indeterminate when it comes to finding a solution. Marx, Hegel's most famous critic, saw the solution (implicitly) in a cooperative society based on the common ownership of the means of production, where, it follows, there would be no exploitative relations, and where the organizing principle would be, in a famous—if unoriginal—phrase, "from each according to his ability, to each according to his needs."

Relativism and Equality

The idea of needs, while always perhaps implicit in the notion of poverty, has come to the fore in contemporary debates. The crux of these debates is whether poverty is necessarily relative. At the root of Hume's critique of the "severe" morality of poverty was his replacement of the categorical distinction between necessity and luxury to one where these are points on a scale. This then enabled him consistently to argue (as many others did likewise) that onetime luxuries could become necessities. Adam Smith defined "necessaries" as "not only commodities which are indispensably necessary for the support of life but whatever the customs of the country renders it indecent for creditable, even of the lowest order, to be without." Hence in Smith's time, a day laborer would be ashamed to appear in public without a linen shirt (its nonpossession, indeed, would denote a "disgraceful degree of poverty") when the Greeks and Romans of an earlier age lived very comfortably though they had no linen.

Relative or absolute?

In modern debates, this fluidity in the meaning of necessity has been taken to be a vindication of the "relativity" of poverty. A major advocate of this position is the sociologist Peter Townsend, who declares that poverty can be defined "only in terms of the concept of relative deprivation" (p. 31). More precisely the standard of deprivation is socially relative and Townsend is critical of an "absolute concept" that would be based on some universal, extra-social, notion of "needs." Townsend holds that needs must be defined as more than some biological minimum and, rather, as "the conditions of life which ordinarily define membership of society." These conditions comprise "diets, amenities, standards and activities which are common or customary" (p. 915). The reference to "custom" is a deliberate echo of Smith's argument. The poor are now identified as those who lack the resources to participate in those customary conditions definitive of social membership and who are as a consequence "excluded from ordinary living patterns" (p. 31).

To its critics, Townsend's relativity approach leads to the absurd conclusion that someone could be called poor because they could buy only one Cadillac a day while others in the same community could buy two, or that more people can be "poor" in California than in, for example, Chad. It follows, further, that poverty cannot be eliminated, no antipoverty program can ever be entirely successful. To these critics there has to be an absolute core, since only from such a secure basis is it possible meaningfully to identify poverty and only then does it become possible to conceive of poverty's elimination. Hence the number of people with inadequate sustenance, shelter, and life expectancy is greater in Chad than in California, and, thus, there are more in poverty in the former than in the latter location.

Whether poverty is regarded as a form of social exclusion or as the deprivation of basic needs, the shared assumption is that it is a morally pernicious state of affairs. It is bad in itself because suffering is bad in itself and not, as the "virtuous" view would claim, a condition of "indifference" or even sanctity. This is the modern sensibility and it is now dominant—in no way can poverty be an ideal. The corollary of this is that the existence of poverty is indefensible and there is a moral imperative to seek remediable action, which to be effective is now typically thought to require the activity or intervention of the state. Here the poverty debate enters into the mainstream of contemporary moral, social, and political theory.

Poverty in itself does not reduce people to a rabble; a rabble is created only by the disposition associated with poverty, by inward rebellion against the rich, against society, the government etc.… The rabble do not have sufficient honour to gain their own livelihood through their own work yet claim they have a right to receive their livelihood. No one can assert a right against nature but within the conditions of society hardship at once assumes the form of a wrong inflicted on this or that class. The important question of how poverty can be reconciled is one which agitates and torments modern societies especially.

source: Georg Wilhelm Friedrich Hegel, Elements of the Philosophy of Right, 1821.

Contemporary debate.

On one side there are liberals (such as the Austrian economist F. A. Hayek [1899–1992]) who argue that the best remedy to poverty is to permit inequality in the form of wide income differentials so that the incentive to gain these high rewards produces the social wealth (and higher tax revenues) that enables the lot of the impoverished to be improved. Indeed, Hayek claims that in this way "poverty in the absolute sense has been abolished" (vol. 2, p. 139). This belongs in the Smithian tradition—Smith himself had said that universal poverty was conjoined with absolute equality in the earliest (hunter-gatherer) societies. The thrust of the argument here is that what matters morally is individuals having enough to sustain themselves, not that others might have more than enough. On the other side are welfare socialists, like Townsend, who (as previously noted) picks up a different aspect of Smith. Socialists are far less complacent about inequality. Townsend's own prescription is the abolition of "excessive" income and wealth and the establishment of a more egalitarian society. These two positions do not exhaust the field. There are welfare liberals (including John Rawls [1921–2002] in his A Theory of Justice [1971]) who think that inequalities in income and wealth are justified so long as the lot of the least-well-off is maximized. There are also more radical approaches that seek appropriately the root of the problem and locate this in a socially induced emphasis on production and consumption. The anthropologist Marshall Sahlins, for example and unwittingly echoing Thomas Paine in Agrarian Justice (1797) about the American Indians, argues that poverty is a problem created by the market-industrial system and when the lives of those assumed to be in dire poverty, such as the Bushmen of the Kalahari, are examined they can be discerned to live in "a kind of material plenty"—they are content with few possessions. This approach has affinities to environmental or "green" thought, which enjoins what one of its influential sources, E. F. Schumacher, in Small Is Beautiful (1973), has called "Buddhist economics." Without ever expressing the point explicitly it is, from the perspective of the history of ideas, possible to see here a reprise of the ideal of poverty, understood as self-control. The Bushmen have (so to speak) heeded the wisdom of the Stoic sage and have no wants beyond what they need; they do not experience poverty.

Conclusion

Poverty is an idea with a history that is particularly instructive. In the twenty-first century, poverty as a state of material and social deprivation is regarded as the standard meaning. But when examined historically, it can be seen that this meaning has far from dominated. In the history of Western experience (with echoes elsewhere) poverty had for a long period been considered a preferred condition, one where humans demonstrated their control both of their own nature and of the circumstances in which they found themselves.

See also Capitalism ; Christianity ; Liberalism ; Monasticism ; Property ; Stoicism ; Wealth .

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——. Treatise of the Vocations (1597-1601). In his Works. Cambridge: John Legate, 1612.

Rowntree, B. Seebohm. Poverty: A Study of Town Life. 2nd ed. London: Macmillan, 1902.

Sahlins, Marshall. Stone Age Economics. London: Tavistock, 1974.

Sen, Amartya. "Poor: Relatively Speaking." Oxford Economic Papers 35 (1983): 153–169.

Sidney, A. Discourses concerning Government. 1698. Edited by T. West. Indianapolis: Liberty, 1988.

Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. 1776. Edited by R. H. Campbell and A. S. Skinner. Oxford and New York: Oxford University Press, 1976.

Tierney, Brian. Medieval Poor Law: A Sketch of Canonical Theory and Its Application in England. Berkeley: University of California Press, 1959.

Townsend, Peter. Poverty in the United Kingdom: A Survey of Household Resources and Standards of Living. Berkeley: University of California Press, 1979.

Weber, Max. The Protestant Ethic and the "Spirit" of Capitalism and Other Writings. Translated and edited by Peter Baehr and Gordon C. Wells. New York: Penguin, 2002.

SECONDARY SOURCES

Berry, Christopher J. The Idea of Luxury: A Conceptual and Historical Investigation. Cambridge, U.K., and New York: Cambridge University Press, 1994. Covers episodically issues and debates from the Greeks to the present day.

Himmelfarb, Gertrude. The Idea of Poverty: England in the Early Industrial Age. New York: Knopf, 1984. Contentiously reviews orthodox interpretations.

Sen, Amartya. Poverty and Famines: An Essay on Entitlement and Deprivation. Oxford and New York: Oxford University Press, 1981. A modern perspective by a Nobel prize winner in economics.

Wood, Diana. Medieval Economic Thought. Cambridge, U.K., and New York: Cambridge University Press, 2002. A useful overview.

Christopher J. Berry

POVERTY

In 1999, in the United States, 3.2 million people age sixty-five and over, representing 9.7 percent of the older population, were officially classified as poor, that is, their income (or that of their families) fell below the income threshold defined by the Census Bureau as the poverty line for their family size. This percentage represented an all-time low for the poverty rate among older persons, which has declined fairly steadily since U.S. poverty statistics first became available in 1959. This decline was dramatic during the 1960s, during which time the rate dropped from about 35 percent to about 25 percent, and there were further sharp declines in the early 1970s (to about 15 percent) in the wake of significant Social Security increases that took place in that period. Plateauing during the "stagflation" of the late 1970s, the elderly poverty rate has since undergone further gradual improvement.

This evolution was accompanied by an equally dramatic shift in the age distribution of poverty. In 1959, older persons were experiencing rates of poverty substantially higher than those of any other age group. Their disadvantage, relative to children, did not diminish during the late 1960s as the War on Poverty was initiated; it actually appears to have widened somewhat during this period, when antipoverty initiatives focused heavily on families with children. By 1969, the child poverty rate had declined to below 15 percent (a rate it has not achieved since), compared to about 25 percent for older persons. However, beginning in the early 1970s, these age groups experienced a sharp reversal of relative fortune. By 1974, the 65+ poverty rate had improved to the point that it had overtaken the child poverty rate, and the two rates have continued to diverge. During the Reagan era of the 1980s, child poverty rates worsened while those for older people improved, and the gap has remained since. In the mid-1990s, the 65+ poverty rate began to dip below the rate for those aged eighteen to sixty-four, and was slightly below that rate in 1999 (U.S. Bureau of the Census, 2000, p. ix).

Half-Full or half-empty?

These developments might be, and often have been, viewed as an unalloyed "good-news" story for older people. Indeed, particularly in conjunction with findings suggesting that the highest-income portion of the older population is becoming increasingly affluent (Crystal, 1982; Crystal and Waehrer, 1996), some have suggested that the major remaining social policy question is why these gains have not been shared by members of other age groups, especially children.

Other data, however, provide reason for concern. Of particular significance is the high proportion of near-poor older people. In 1999, 13.2 percent of older people had incomes between 100 percent and 150 percent of the poverty line, a higher proportion than was the case either for children or for those of working age. Altogether, a total of 22.9 percent of older people lived below 150 percent of the poverty line (U.S. Bureau of the Census, 2000, p. 2).

Taking a longitudinal, rather than a "snap-shot," perspective on late-life poverty also suggests that impoverishment is a very real possibility in older life, despite relatively low cross-sectional poverty rates. Rank and Hirschl (1999) used life table analyses of Panel Study of Income Dynamics data to examine the probability that individuals with various characteristics will experience a year below the poverty line at some point after age sixty. Overall, they estimated that this will occur for 40 percent of America's elderly population and that 48 percent will experience a year below 125 percent of the poverty line. These rates were much higher for those with less than 12 years of education and for African Americans. For example, 88 percent of unmarried, African-American women with less than twelve years of education were projected to fall into poverty at some point in old age, as compared with 13 percent of married white females with twelve or more years of education. In addition to increasing the risk for transitions into poverty, these same factors have also been shown to inhibit escape from poverty among elders (Jensen and McLaughlin, 1997), leading to more persistent old-age poverty among these subgroups.

In addition to highlighting the important role of racial differences and marital status, these results also confirm the importance of educational attainment in determining the risk of late-life impoverishment. This is consistent with other evidence that early advantages, such as those gained by formal education (typically completed by one's mid-twenties) shape individuals' economic destinies in a continued, and even increased, fashion many decades later in the life course, through a process of cumulative advantage and disadvantage (Crystal and Shea, 1990). For example, Crystal, Shea, and Krishnaswami (1992) found that years of education explain more of the variance in income after age sixty-five than at earlier ages, despite the many vicissitudes of life in the intervening decades. It is likely that among baby boomers, individuals with limited formal education will be at even greater risk of late-life impoverishment when they reach old age, since income gaps by education have been considerably higher for baby boomers than for earlier cohorts (Crystal and Johnson, 1998).

Comparing poverty rates across life stages

Perhaps of even greater concern is the question of whether the official poverty line sufficiently reflects the needs of older people, particularly in a society in which so many aspects of health care, long-term care, and other needs related to disabilities of aging depend on older people's own resources rather than public provision. Further, the poverty line for elderly individuals and for two-person, elderly-headed households is somewhat lower than the line for the nonelderly, although it is not clear that their economic needs are really less. For example, in 1999, for an older person living alone, the poverty line was $7,990, compared to $8,667 for a nonelderly person; for a two-person, elderly-headed family the poverty line was $10,075, compared to $11,214 for a nonelderly family. On the other hand, some have argued that the situation is even better for older people than the poverty figures show because the value of Medicare is not included in the poverty-line calculation.

The conventional poverty line has been widely acknowledged to be rather arbitrary in its construction. It dates from the 1960s, when it became important to planners of the War on Poverty to have a measure of a minimally adequate living level with which to define poverty and monitor progress toward the ambitious goal of eliminating it—an objective toward which there has only been real progress, ironically, with the older population, despite the War on Poverty's emphasis on children.

The basic idea underlying the original construction of the poverty definition, which was undertaken in the 1960s for the federal government by Mollie Orshansky, was straightforward to the point of being simplistic. Essentially, based on some studies that suggested that lower-income people spent about one-third of their income on food, Orshansky constructed food budgets for a minimally adequate diet, and multiplied these budget amounts by three. These original poverty line figures have been updated subsequently, based on Consumer Price Survey inflation adjusters. They have been criticized since their creation, both from the left (largely on the basis that a static measure of this kind does not incorporate increasing expectations for minimal adequacy in a society of increasing prosperity) and from the right (largely on the basis that they overestimate deprivation and have under-represented progress, since they do not incorporate the value of in-kind benefits such as Food Stamps, Medicaid, Medicare, and housing subsidies).

Those who believe that trends in the existing poverty measure present a more positive picture than they should have often argued that a relative income measure, such as a specified percentage of the median income, would be a more appropriate measure of trends in poverty than the existing poverty lines, because it would take account of the increasing cost of social participation at a basic level (automobiles, flush toilets, or air conditioning in Southern climates might be considered more of a necessity in 1999 than in 1965). Those who believe that the trends present an overly negative picture have often argued for valuing in-kind benefits in the poverty calculation. The argument here may be strongest for benefits like Food Stamps, which are near equivalents of cash. The argument for including health benefits seems more tenuous, as it does not appropriately address the greater health care needs of older persons, who even with Medicare spend more out-of-pocket on health care than do the non-elderly. Crediting each older individual with the average value of his or her Medicare benefit, as measured by average spending on behalf of all older people, attributes a large sum of "income" to each older person, though most are not receiving anything like that amount of services, since the distribution of Medicaid spending is highly skewed and a significant share of it takes place near the time of death. Such a calculation would distort cross-age comparisons by crediting the older age group with greater income because of their higher use of medical services. It would also distort time-trend analyses, making older people seem increasingly well-off as the cost of medical care services increases, thus reducing their income available for other purposes. If one attempted to attribute varying amounts of in-kind income to older individuals based on their actual or predicted Medicare expenditures, one would have the even more illogical result that older individuals get richer as they get sicker.

There have been a number of attempts to construct alternative poverty measures. A National Academy of Sciences (NAS) panel reviewed these issues and issued a report that recommended new ways to measure poverty. This report (see Citro and Michael, 1995) was critical both of the current measure's noninclusion of in-kind benefits and its failure to take account of the ways in which the cost of various goods, such as food, housing, and medical care, has changed relative to other goods since the early 1960s. Most recently, in response to such concerns, the Census Bureau has calculated poverty rates based on four alternative measures of poverty, one of which generally follows the NAS recommendations (Short, Garner, Johnson, and Doyle, 1999). This alternative measure adjusts poverty thresholds by geographical differences in the cost of living, counts noncash benefits as income, and subtracts from income some work-related, housing, and childcare expenses. The other three alternative measures include: the Different Child Care Method (DCM) assigns fixed amounts of child-care expenses to working families with children, based on the number and age of the children; the Difference Equivalence Scale (DES) uses a new method for adjusting for changes in expenses as family size increases; and the No Geographic Adjustment (NGA) measure, that, unlike the NAS measure, does not adjust thresholds for geographic differences in the cost of living. The alternative measures were standardized to the 1997 official poverty lines in such a fashion that each produced the same overall (all-ages) U.S. poverty rate as the official rate, and the measures were applied to income data for 1999. Interestingly, the 65+ poverty rate was considerably higher for each of the alternative measures than for the current official measure, while the child poverty rate was lower (there was little change for working-age persons). For example, while the 1999 poverty rate for persons 65 and over was 9.7 percent by the official measure, it was 13.3 percent (NAS), 13.0 percent (DCM), 13.7 percent (DES), and 13.6 percent (NGA) for the four alternative measures. By contrast, the poverty rate for persons under eighteen years of age was 16.9 percent under the official measure, but was 14.8 percent (NAS), 15.5 percent (DCM), 14.3 percent (DES), and 14.6 percent (NGA) for the four alternative measures. These results tend to support the argument that the official poverty lines underestimate the real prevalence of poverty among older people.

It is also important to note that the relatively low elderly poverty rate is not an indication that older people do not need Social Security; the rate is low only as a result of the presence of Social Security and would be far higher without it. For example, the Census Bureau found that without government transfers (mainly from Social Security) the 1999 poverty rate for persons over age sixty-five would have been 47 percent. Social Security has an important equalizing effect on income distribution—while there is evidence that inequality is higher among older people than at any younger age (Crystal and Shea, 1990), inequality would be far worse without Social Security. Social Security's tremendous success in reducing poverty in old age results in large part from its progressive income replacement design. It replaces a higher proportion of low incomes than of higher ones, while collecting the same contributions as a percentage of income (up to a ceiling)—a redistribution strategy that would be difficult to maintain to the same extent if part of Social Security benefits were replaced with individual private retirement accounts.

Differential needs and out-of-pocket health care costs

Of particular relevance in evaluating efforts to calculate needs-to-income for older people, as the official poverty lines do, is the burden of out-of-pocket health care costs. Clearly, the health care needs of older people are greater than those of younger people, a factor not taken into account in the official poverty lines. While it is sometimes assumed that a needs-tested safety net exists for the poorest elderly, most older people living at near-poverty or worse are not reached by that safety net. For example, Medicaid (which covers Medicare's co-payments and deductibles as well as services such as prescription drugs and long-term health care that are not covered by Medicare) is received by less than half of older people in the lowest income quintile (Crystal et al., 2000).

The two major types of out-of-pocket expenditures that are significant for older people are payments to health care providers and insurance premiums, including Medicare Part B premiums. About one-third of Medicare beneficiaries receive help in filling Medicare's gaps through retiree group health benefits from a former employer or a spouse's former employer, typically at no cost or at a highly-subsidized price; these benefits tend to be unavailable to individuals who held lower-paying jobs and those with less education. More than one-third of Medicare beneficiaries purchase individual supplemental policies (Medigap) in the marketplace. Prices of these products are unsubsidized and their coverage is limited.

Out-of-pocket costs for prescription drugs, a major category of health care not covered by Medicare, have received considerable attention. There has been less attention to the costs of dental services, also uncovered by Medicare, and of home health and assistive care. Analyses using the 1995 Medicare Current Beneficiary Survey (MCBS) indicate that despite Medicaid coverage for some, older people in the lowest income quintile (roughly equivalent to those living below about 140 percent of poverty) were spending 32 percent of their incomes on health care expenditures (in 1995). Prescription drugs accounted for 40 percent of their payments for health care goods and services (as opposed to 26 percent for those in the highest-income bracket), and dental care accounted for 12 percent (Crystal et al., 2000). With these high levels of financial need for health care, it seems illogical that the poverty line for elderly-headed households is lower than that for non-elderly-headed households, suggesting that the official poverty lines underestimate true poverty among older people.

Late-life poverty in the United States and abroad

Social Security, as noted above, does incorporate a redistributive element and plays an equalizing role that reduces old-age inequality. However, it lacks, even in combination with related programs such as Supplemental Security Income (SSI), a high minimum benefit and provides less protection for lower-income individuals than do systems in a number of other developed countries. Smeeding, Rainwater, and Torrey (1993) compared levels of late-life inequality and minimum benefits in public pension systems (as a percentage of median income) across a number of countries. The United States provided the lowest minimum benefit (defined by the means-tested SSI level) at 34 percent of median income, and experienced the highest level of late-life inequality. Countries such as France, Canada, and Australia guaranteed benefits close to 50 percent of median income and experienced intermediate levels of late-life inequality, while the Netherlands and Sweden, with their well-developed social welfare systems, provided guarantees of 72 percent and 66 percent of median income, respectively, and experienced the lowest rates of late-life inequality. Countries such as the Netherlands and Sweden with high minimum retirement income guarantees have largely eliminated late-life economic poverty. Of course, these and their other social welfare protections typically have come at the cost of a higher payroll tax and other taxation rates on working-age citizens than have been found politically acceptable in the United States.

While the existing U.S. poverty measure has significant limitations in comparing poverty rates across years or age groups, it is nevertheless a useful indicator of a group among the older population that is clearly experiencing economic privation. Similarly, near-poverty (e.g., those living below 150 percent of the poverty line) is a useful way to define a group that, while not in quite as dire straits, also experiences considerable privation and is an appropriate target for efforts to address unmet needs in the older population. It is therefore helpful to examine the characteristics of the older population living in poverty. Not surprisingly, they are disproportionately female, and living alone, have chronic health conditions, and are over seventy-five years of age. In 1999, 69.7 percent were women. The poverty rate (in 1999) was 26.4 percent among African American women and 5.7 percent among white men. Similarly, among the 7.5 million elderly Americans living below 150 percent of the poverty line, 68.4 percent were women (47.1 percent of African American women fell into this category, and 14.7 percent of men). These differentials reflect lagged effects of differences in early advantages and disadvantages, differences in economic opportunities during the working years, the economic impact of differential rates of disability and ill health across socioeconomic groups in later life, and similar factors. This process of cumulative advantage and disadvantage reflects the fact that despite some redistributional features, retirement income systems in the United States are based heavily on pre-retirement earnings. The circumstances of the substantial population living below 150 percent of poverty (almost one-quarter of the older population) contrast sharply with those of more affluent older adults, representing a continuation of a long-standing "two worlds of aging" pattern in the United States (see Crystal, 1981).

Stephen Crystal

See also Consumer Price Index and COLAs; Economic Well-Being; Income Support for Nonworkers, National Approaches; Inequality; Life Cycle Theories of Savings and Consumption; Savings.

BIBLIOGRAPHY

Chulis, G.; Eppig, F.; Hogan, M. O.; Waldo, D.; and Arnett, R. "Data Watch: Health Insurance and the Elderly." Health Affairs Spring 1993: 111–118.

Citro, C. F., and Michael, R. T. Measuring Poverty: A New Approach. Washington, D.C.: National Academy Press, 1995.

Crystal, S. America's Old Age Crisis: Public Policy and the Two Worlds of Aging. New York: Basic Books, 1982.

Crystal, S.; Harman, J.; Sambamoorthi, U.; Johnson, R.; and Kumar, R. "Out of Pocket Health Care Costs Among Older Americans." Journal of Gerontology: Social Sciences 55B, no. 1 (2000): S51–S62.

Crystal, S., and Johnson, R. The Changing Retirement Prospects of American Families: Impact of Labor Market Shifts on Economic Outcomes. Public Policy Institute Publication #98-01. Washington, D.C.: AARP, 1998.

Crystal, S., and Shea, D. "Cumulative Advantage, Cumulative Disadvantage, and Inequality Among Elderly People." The Gerontologist 30, no. 4 (1990): 437–443.

Crystal, S.; Shea, D.; and Krishnaswami, S. "Educational Attainment, Occupational History, and Stratification: Determinants of Later-Life Economic Resources." Journal of Gerontology: Social Sciences 47, no. 5 (1992): S213–S221.

Crystal, S., and Waehrer, K. "Later-Life Economic Inequality in Longitudinal Perspective." Journal of Gerontology: Social Sciences 51B, no. 6 (1996): S307–S318.

Jensen, L., and McLaughlin, D. "The Escape from Poverty Among Rural and Urban Elders." The Gerontologist 37 (1997): 462–468.

Karoly, L., and Rogowski, J. "The Effect of Access to Post-Retirement Health Insurance on the Decision to Retire Early." Industrial and Labor Relations Review 48 (1994): 103–123.

Lillard, L.; Rogowski, J.; and Kington, R. "Long-Term Determinants of Patterns of Health Insurance Coverage in the Medicare Population." The Gerontologist 37 (1997): 314–323.

Rank, M., and Hirschl, T. "Estimating the Proportion of Elderly Americans Ever Experiencing Poverty During Their Elderly Years." Journal of Gerontology: Social Sciences 54B, no. 4 (1999): S184–S193.

Short, K.; Garner, T.; Johnson, D.; and Doyle, P. Experimental Poverty Measures: 1990 to 1997. U.S. Census Bureau, Current Population Reports, Consumer Income, P60-205. Washington, D.C.: U.S. Government Printing Office, 1999.

Smeeding, T.; Torrey, B. B.; and Rainwater, L. Going to Extremes: An International Perspective on the Economic Status of the U.S. Aged. Working Paper No. 87. Luxembourg: Luxembourg Income Study, 1993.

U.S. Bureau of the Census, Current Population Reports; Series P-60, No. 210, Poverty in the United States: 1999. Washington, D.C.: Bureau of the Census, 2000.

POWER OF ATTORNEY

See Advance directives for health care

PRESCRIPTION DRUGS

See Medication costs and reimbursement

POVERTY

Scholarly as well as ideological debate has long centered around the most elementary questions concerning poverty. What is poverty? How can it be measured? What causes it? Is it a natural phenomenon or a symptom of a poorly ordered society? Though answers to all these questions abound, there is no definitive answer to any one of them, nor can there ever be, for the questions are not purely demographic, but moral, ethical, and political as well. Poverty is a concept, not a fact, and must be understood as such. Even though no definitive answers are possible, this does not mean that all answers are thereby equal; many are based on ignorant assumptions and ill-formed judgments. Sociologists involved in poverty research seek to make sure that all understand the meaning and consequences of various points of view, and that both theoretical and policy research is based soundly upon clear definitions and reliable data.

Even the definition of "poverty" is problematic. The word is derived from the French pauvre, meaning "poor." Poverty is simply the state of lacking material possessions, of having little or no means to support oneself. All would agree that anyone lacking the means necessary to remain alive is in poverty, but beyond that there is little agreement. Some scholars and policy makers would draw the poverty line at the bare subsistence level, like Rowntree's "the minimum necessaries for the maintenance of merely physical efficiency" (1901, p. viii). Others argue for poverty definitions that include persons whose level of living is above subsistence but who have inadequate means; among those holding to the latter, further arguments concern the definition of adequacy. Social science cannot resolve the most basic arguments. For example, the level of living implied by the poverty threshold in the United States would be seen as desirable and unattainable in many other countries, yet few would suggest that poverty in the United States be defined by such outside standards. Sociologists can evaluate the demographic and economic assumptions underlying standards of poverty, but not the standards themselves.

CONCEPTIONS OF POVERTY

Poverty can be defined in absolute or relative terms. The subsistence line is a good example of an absolute definition (i.e., below this line one does not have sufficient resources to survive). A criterion based on some arbitrary formula, such that poverty equals some fraction of the median income or below, is a good example of a relative definition (e.g., "All persons earning less than 25 percent of the median income are poor"). In all industrial societies an absolute definition will have far fewer persons officially in poverty than will a relative definition, creating natural political pressure for absolute definitions. For example, a study in 1976 revealed that if poverty was defined as having 50 percent of the median income, data on income distributions would show that an unchanging 19 percent of the population had been poor for almost the past two decades (U.S. DHEW 1976). Absolute definitions show declines in poverty over time in industrial nations. There are valid arguments for both types of definitions. Some argue that relative definitions of poverty render the term meaningless in affluent societies, and make cross-national comparisons difficult—for example, in an advanced industrial society, 50 percent of national median income could leave one adequately provided for, while the same percentage in many less industrialized societies would not provide basic necessities to sustain life. On the other hand, within societies there is evidence that most people see poverty in relative terms rather than as an absolute standard (Rainwater 1974; Kilpatrick 1973). That is, popular conceptions of what level of living constitutes poverty have been found to change as general affluence goes up and down. Advocates of relative measures point out that any absolute measure is arbitrary and thus meaningless. A reasonable definition of the poor, they argue, should be one that demarcates the lower tail of the income distribution as the poor, whatever the absolute metric represented by that tail, for those persons will be poor by the standards of that time and place. As the average level of income rises and falls, they argue, what is seen as poverty will, and should, change. Advocates of absolute measures of poverty do not deny that perception of poverty is intimately tied to distributional inequality, but argue that relative definitions are too vague for policy purposes. An absolute standard, defined on some concrete level of living, is a goal that can possibly be attained. Once it is attained, they say, a new goal could be set. Eliminating poverty as defined by relative standards is a far more difficult goal, both practically and politically. T. H. Marshall noted, "the question of what range of inequality is acceptable above the 'poverty line' can only marginally, if at all, be affected by or affect the decision of where that line should be drawn" (1981, p. 52).

Relative versus absolute poverty is a distributional distinction, but there are other important distinctions as well. A social distinction, and one with considerable political import, is usually made between the "deserving poor" and the "undeserving poor." In their brief summary of the historical origins of this distinction, Morris and Williamson (1986, pp. 6–12) maintain that it became significant in the fourteenth century, when, for a variety of reasons (the decline of feudalism, the rise of a market economy with concomitant periodic labor dislocations, bubonic plague–induced regional labor shortages), the poor became geographically mobile for the first time. Before that, the local Catholic parish, with its "Blessed are the poor" theology, was the primary caretaker of the indigent. Mobility caused an increase in the number of able-bodied individuals needing temporary assistance, and troubles arising from their presence contributed to a growing antipathy toward the able-bodied poor.

Katz (1989) also traces the origins of the "undeserving poor" in part to demographic factors. He points out that, prior to the twentieth century, poverty was a seemingly unalterable fact of life, and most people would spend their lives in it. Thus no moral taint was attached to poverty. The only policy question usually involved the locus of responsibility for aid, and the answer was a simple one: Responsibility was local, and those needy persons not belonging to the community could be "resettled." Increased population mobility made the settlement provisions unworkable, and the original distinction between the genuinely needy and "rogues, vagabonds, and sturdy beggars" hardened into a moral distinction between the poor, who needed no public relief, and "paupers," those needing assistance because of personal failings (Katz 1989, pp. 12–14).

Feagin (1975, chap. 2) locates the origins of negative attitudes toward the poor in the Protestant Reformation. Under Protestantism, he notes, the "work ethic"—the ideology of individualism—became a central tenet of the Western belief system. Poverty, in the extreme Calvinist version of this viewpoint, is largely a consequence of laziness and vice, and can even be regarded as just punishment from a righteous God. The rise of Puritan thought contributed to the increasing disfavor with which the unemployed and destitute were regarded. It became a matter of faith that poverty was individually caused and must thereby be individually cured. These ideas became secularized, and programs to aid the poor thereafter focused on curing the individual faults that led to poverty: Potential problems in the structure of society that caused unemployment and underemployment were not to be scrutinized in search of a solution. The notion of poverty continues to be in flux. As Marshall (1981) noted, the concept has been with us since antiquity, but its meaning has not been constant through the ages.

Most sociologists today distinguish among three major types of explanations of poverty: individual, situational, and structural theories. Individual theories attribute the primary cause of poverty to individual failings or, more neutrally, to individual differences—the central argument being that the poor are different from the nonpoor in some significant way. Situational theories agree that the poor are different from the nonpoor, but argue that the differences are a result of poverty, not a cause of it. Structural theories see differences in individual attributes as irrelevant, and argue that poverty has only societal-level origins: The characteristics of economic systems create poverty, not the characteristics of individuals.

THEORY AND POLICY

The epitome of the individual viewpoint in the social sciences was the once-dominant "culture of poverty" explanation for destitution. Oscar Lewis (1961, 1966) is usually credited with this idea, which sees poverty not only as economic deprivation, or the absence of something, but also as a way of life, the presence of specific subcultural values and attitudes passed down from generation to generation. Lewis saw the structure of life among the poor as functional, a set of coping mechanisms without which the poor could not survive their harsh circumstances. But there were negative consequences of the value system as well, he noted. Family life was disorganized, there was an absence of childhood as a prolonged lifecycle stage, a proliferation of consensual marriages, and a very high incidence of spouse and child abandonment—all of which left individuals unprepared and unable to take advantage of opportunities. Exacerbating the problem, the poor were divorced from participation in and integration into the major institutions of society, leading to constant hostility, suspicion, and apathy. Many have maintained that the culture-of-poverty viewpoint dovetailed perfectly with a politically liberal view of the world. It blamed the poor as a group for their poverty, but held no single person individually responsible, nor did it blame the structure of the economy or the society. This view of the poor led to antipoverty policies directed at changing the attitudes and values of those in poverty, so that they could "break out" of the dysfunctional cultural traits they had inherited. It led political liberals and radicals to attempts to "organize the poor." Political conservatives transformed the explanation into one that held the poor more culpable individually and the problem into one that was intractable—"benign neglect" being then the only sensible solution (Banfield 1958, 1970; Katz 1989). There were many problems with the culture-of-poverty explanation. Most serious was the fact that the cultural scenario simply doesn't fit. Only a minority of the poor are poor throughout their lives; most move in and out of poverty. Also, a substantial proportion of those in poverty are either women with children who fell into poverty when abandoned by a spouse, or the elderly who became poor when their worklives ended: Neither event could be explainable by the culture of the class of destination. Many studies falsified specific aspects of the culture-of-poverty thesis (for a review, see Katz 1989, pp. 41 ff.), and Hyman Rodman's influential notion of the "lower-class value stretch" (1971) offered an alternative explanation (the poor actually share mainstream values, but must "stretch" them to fit their circumstances—remove the poverty, and they fit neatly into dominant culture—attempts to alter their "culture" are unnecessary, and meaningless, since "culture" is not the problem). Nonetheless, the culture-of-poverty thesis was (and to some extent still is) a very popular explanation for poverty. This is probably so in part because it fits so well the individualistic biases of most Americans. Surveys of attitudes toward poverty have shown that most persons prefer "individualistic" explanations of poverty, which place the responsibility for poverty primarily on the poor themselves. A minority of Americans subscribe to "structural" explanations that blame external social and economic factors, and this minority consists largely of the young, the less educated, lower income groups, nonwhites, and Jews (Feagin 1975, p. 98).

A more sophisticated recent treatment incorporating some of the explanatory power of the culture of poverty argument without that theory's untenable assumptions is William Wilson's depiction of the "underclass" (1987). This recent work by Wilson on the underclass has been criticized by some as a return to classical culture of poverty theory in a new guise. It is not, of course, and represents a very different type of explanation. Wilson defines the underclass as an economically disadvantaged group whose marginal economic position and weak attachment to the labor force is "uniquely reinforced by the neighborhood or social milieu" (Wilson 1993, p. 23). Changes in the geography of employment, industrial specialization, and other factors have resulted in a rise in joblessness among urban minorities, which has in turn led to an increase in other social dislocations. Primary among those other factors has been the steady out-migration of working-class and middleclass families from the inner cities, which groups would normally provide a social buffer. Wilson notes: "in a neighborhood with a paucity of regularly employed families and with the overwhelming majority of families having spells of long-term joblessness, people experience a social isolation that excludes them from the job network system that permeates other neighborhoods and that is so important . . . other alternatives such as welfare . . . are not only increasingly relied on, they come to be seen as a way of life" (1987, p. 57). The 1990 U.S. Census showed that about 15 percent of the poor lived in neighborhoods where the poverty rate was at least 40 percent (O'Hare 1996). In these neighborhoods, where few are likely to have resources or job networks, reside Wilson's "underclass." Unlike the culture-of-poverty theory, Wilson's theory analyzes the structural and cultural resources of poor places, rather than the socialized attitudes and values of poor people. Wilson contends that "ghetto-specific cultural traits" are relevant in understanding the behavior of inner-city poor people, but these traits, contra culture-of-poverty theory, do not have a life of their own. That is, they are an effect of deprivation and social isolation, not a cause of it, and they command very little commitment—they are not self-perpetuating. "Social isolation," Wilson's key concept, implies not differential socialization of the inner-city poor, but rather their lack of cultural resources supporting the desirability and possibility of achieving culturally normative aspirations. The individual characteristics normally associated with a culture of poverty argument represent expected and even rational responses to adverse environments, not socialized belief systems. While Wilson's work has been very influential in the social sciences, one of the most politically influential recent works on poverty policy has been that of Murray (1984). Murray argued that the viewpoint that individuals ultimately cause their own poverty changed in the 1960s to the viewpoint that the structure of society was ultimately responsible. This alteration in the intellectual consensus, which freed the poor from responsibility for their poverty, was fatally misguided, he argues, and caused great damage to the poor. Despite enormously increased expenditures on social welfare from 1965 on, he maintains, progress against poverty ceased at that point. In the face of steadily improving economic conditions, the period 1965–1980 was marked by increases in poverty, family breakdown, crime, and voluntary unemployment. Murray argues that this occurred precisely because of the increased expenditures on social welfare, not despite them. Work incentive declined during these years because of government policies that rewarded lack of employment and nonintact family structure. It is a standard economic principle that any activity that is subsidized will tend to increase. Murray's arguments have had policy impact, but have been subject to extensive criticism by students of the field.

As evidence of the disincentive to work brought about by social welfare payments, Murray cites the Negative Income Tax (NIT) experiments. These were large social experiments designed to assess the effects of a guaranteed income. The first NIT experiment was a four-year study in New Jersey from the late 1960s to the early 1970s. In this study, 1,375 intact "permanently poor" families were selected, and 725 of them were assigned to one of eight NIT plans. It was found that the reduction in labor-market activity for males caused by a guaranteed income was not significant, but that there were some reductions for females (5–10 percent of activity), most of which could be explained by the substitution of labor-market activity for increased child care (home employment). In a larger NIT study conducted throughout the 1970s, the Seattle-Denver Income Maintenance Experiment (usually referred to in the literature as the SIME-DIME study), much larger work disincentives were found, about 10 percent for men, 20 percent for their spouses, and up to 30 percent for women heading single-family households (see Haveman 1987, chap. 9, for an excellent summary of the many NIT experiments). Murray offered these findings as evidence that existing welfare programs contributed to poverty by creating work disincentives. Cain (1985) pointed out that the experiments provided much higher benefits than existing welfare programs, and also noted that, given the low pay for women at that level, the 20 percent reduction for wives would have a trivial effect on family income. If it resulted in a proportionate substitution of work at home, the reduction could actually lead to an improvement in the lives of the poor. Commentators have presented arguments against almost every point made by Murray, insisting that either his measures or his interpretations are wrong. For example, Murray's measure of economic growth, the gross national product (GNP), did increase throughout the 1970s, but real wages declined, and inflation and unemployment increased—poverty was not increasing during good times, as he argues. His other assertions have been similarly challenged (for summaries, see McLanahan et al. 1985; Katz 1989, chap. 4), but though his arguments and empirical findings simply do not stand up to close scrutiny, the broad viewpoint his work represents remains important in policy deliberations, probably because they offer pseudoscientific support for the biases of many.

MEASURES OF POVERTY

In the United States, official poverty estimates are based on the Orshansky Index. The index is named for Mollie Orshansky of the Social Security Administration, who first proposed it (Orshansky 1965). It is an absolute poverty measure, based on the calculated cost of food sufficient for an adequate nutritional level and on the assumption that persons must spend one-third of their after-tax income on food. Thus, the poverty level is theoretically three times the annual cost of a nutritionally adequate "market basket." This cost was refined by stratifying poor families by size, composition, and farm/nonfarm, and by creating different income cutoffs for poverty for families of differing types. Originally there were 124 income cutoff points, but by 1980 the separate thresholds for farm families and female-headed households had been eliminated, and the number of thresholds reduced to 48. Since 1969 the poverty line has been regularly updated using the Consumer Price Index (CPI) to adjust for increased costs. The original index was based on the least costly of four nutritionally adequate food plans developed by the Department of Agriculture. Since a 1955 Department of Agriculture survey of food consumption patterns had determined that families of three or more spent approximately one-third of their income on food, the original poverty index was simply triple the average cost of the economy food plan. This index was altered for smaller families to compensate for their higher fixed costs, and for farm families to compensate for their lower costs (the farm threshold began as 70 percent of the nonfarm for an equivalent household, and was raised to 85 percent in 1969). Originally, the poverty index was adjusted yearly by taking into account the cost of the food items in the Department of Agriculture economy budget, but this changed in 1969 to a simple CPI adjustment (U.S. Bureau of the Census 1982).

Over the years there have been many criticisms of the official poverty measure and its assumptions (for summaries and extended discussion, see U.S. DHEW 1976; Haveman 1987). The first set of problems, some argue, come from the fact that the very basis of the measure is flawed. The economy food budget at the measure's core is derived from an outdated survey that may not reflect changes in tastes and options. Further, the multiplication of food costs by three is only appropriate for some types of families, other types must spend greater or lesser proportions on food. Some estimates indicate that the poor spend half or more of their income on food; the more well-to-do spend one-third or less. Even if the multiplier was correct, the original Department of Agriculture survey discovered it for posttax income; in the poverty measure it is applied to pretax income, though the poor pay little in taxes. Other problems often cited include the fact that the "economy budget" assumes sufficient knowledge for wise shopping—a dubious assumption for the poor—and the fact that the poor are often locked into paying much higher prices than average because of a lack of transportation. An additional problem is that the poverty thresholds are not updated by using changes in the actual price of food, but instead by changes in the CPI, which includes changes in the price of many other items such as clothing, shelter, transportation, fuel, medical fees, recreation, furniture, appliances, personal services, and many other items probably irrelevant to the expenses of the poor. Findings are mixed, but it is generally agreed that the losses in purchasing power suffered by the poor in inflationary periods is understated by the CPI (see Oster et al. 1978, p. 25). A second set of problems derives from the fact that the definition is based on income only. Both in-kind transfers and assets are excluded. Excluding in-kind transfers means that government-provided food, shelter, or medical care is not counted. Excluding assets means that a wealthy family with little current income could be counted as poor.

DEMOGRAPHY OF POVERTY

In 1987 the average poverty threshold for a family of four was $11,611 per year (all figures in this paragraph are from U.S. Bureau of the Census 1989a, p. 163; 1989b, p. 166; 1990). This means the assumed annual cost of an adequate diet for four persons was $3,870.33, or about 88 cents per meal per person. For a single person the poverty threshold was $5,778, and the food allowance $1.76 per meal. In 1986 the poverty threshold was $11,203, allowing 85 cents per meal, and in 1988 it had risen to $12,091, or 92 cents per meal. In the United States in 1987 there were 32,341,000 persons below the poverty threshold, or 13.4 percent of the population. In 1988 there were 31,878,000, or 13.1 percent, almost a half-million fewer persons below official poverty than the year before. These figures underestimate official poverty somewhat, since they are based on the Current Population Survey, which is primarily a household survey and thus does not count the homeless not in shelters. The decline from 1987 to 1988 in the number in poverty is part of a long-term trend. In 1960 there were 8 million more—39,851,000 persons—who by today's guidelines would have been counted as officially in poverty, representing 22.2 percent of the population. By the official, absolute standard, poverty has greatly decreased over the past three decades, both in terms of the actual number of persons below the threshold and, even more dramatically, by the percentage of the population in poverty (U.S. Bureau of the Census 1989). This decrease actually took place over two decades, since the number of people in poverty in 1970 had declined to only 25,420,000, or 12.6 percent of the population, and the number and percentage have risen since then, but never back as high as the 1960 levels. Poverty is not evenly spread over the population. Of those below the official poverty level in 1988, 57.1 percent were female, 29.6 percent were black, and 16.9 percent were Hispanic. Female-headed families with children were disproportionately poor. In poverty in 1988 were 38.2 percent of all such white families and 56.3 percent of all such black families (this is a gender phenomenon, not a single-parent one, since in 1988 only 18 percent of male-headed single parent families were below the poverty threshold). The age composition of the poor population has changed. In 1968, 38.6 percent of those in poverty were of working age (18–64), while twenty years later 49.6 percent of those in poverty were of working age. From 1968 to 1988 the percentage of the poor population over 65 declined from 18.2 percent to 10.9 percent, and the percentage who were children under 18 declined from 43.1 percent to 39.5 percent. A higher percentage of working-age poor is seen by some as a sign of worse times. It almost certainly reflects not only economic downturns but also in part ideological biases toward helping the presumably able-bodied poor; most antipoverty programs have been specifically aimed at the old or the young. O'Hare (1996) points out that the poverty rate and the number of poor in the 1990s exceed those figures in the 1970s. He notes that all the dramatic postwar decline in poverty rates occurred before 1973. After that, poverty rates in the United States rose through the early 1980s, then declined, but never back to the 1973 level.

Despite extensive debate about the policy implications of various definitions of poverty, and the inherent difficulty of locating this population, one can have confidence that the poor are being counted with reasonable precision. More than one generation of social scientists have contributed to the refinement of the measures of poverty, and existing statistical series are based on data collected by the U.S. Bureau of the Census—an organization with very high technical competence. Nonetheless, there is one group, the extremely poor, whose numbers are in doubt. All current measurement relies on the household unit, and assumes some standard type of domicile. As Rossi puts it, "our national unemployment and poverty statistics pertain only to that portion of the domiciled population that lives in conventional housing" (1989, p. 73). An extremely poor person living, perhaps temporarily, in a household where other adults had sufficient income would not be counted as being in poverty. Even more important, the literally homeless who live on the street, and those whose homes consist of hotels, motels, rooming houses, or shelters are not counted at all in the yearly Current Population Survey (the decennial census does attempt to count those in temporary quarters, but the 1990 census was the first to even attempt to count those housed in unconventional ways or not at all). The studies of Rossi and his colleagues indicate that the number of extremely poor people in the United States (those whose income is less than two-thirds of the poverty level) is somewhere between four and seven million. The number of literally homeless poor people, those who do not figure into the official poverty counts, must be estimated. The best available estimate is that they number between 250,000 and 350,000, about 5–8 percent of the extremely poor population (Rossi 1989). The number of extremely poor people has more than doubled since 1970, while the population was increasing only by 20 percent (Rossi 1989, p. 78). The extremely poor are at considerable risk of becoming literally homeless. When they do so, they will disappear from official statistics (just as the unemployed cease being officially unemployed soon after they give up the search for work). To see that official statistics remain reliable in the face of increasing extreme poverty is the most recent methodological challenge in the field.

POVERTY IN LOW-INCOME COUNTRIES

Most of the discussion thus far has concerned poverty in the United States. Comparing poverty across countries is a difficult enterprise, but is important to do if one is to put poverty in any individual country in perspective. Poverty in the United States and in other highly industrialized countries simply does not fall into the same category as poverty in less industrialized nations. Many of those classified as in poverty in the United States would be seen as reasonably well off by international standards. This means that, although many countries report a "percentage-in-poverty" figure for their populations, these figures cannot be sensibly compared, since the concept of what constitutes poverty varies so widely. Statistics from the United Nations Development Program 1998 Human Development Report can illustrate this stark contrast. In 1998, in the fourty-four countries the U.N. classifies as "least developed," about 29 percent of the population was not expected to survive to age 40. Compare this to the 5 percent not expected to survive to that age in the industrial countries. In the least developed countries, 43 percent of the population has no access to safe water, 64 percent no access to sanitation, and 51 percent no access to health services (considering all developing countries rather than just the poorest, those figures would be 29 percent, 20 percent, and 58 percent, respectively). This level of living is characteristic of very few people in industrial nations, making poverty comparisons almost meaningless. The World Bank has attempted to provide international comparisons of poverty by creating a measure of the percentage of a country's population living on less than $1 a day, calculated in 1985 international prices and "adjusted to local currency using purchasing power parities" (World Bank 1999, p. 69). The $1-a-day figure was chosen because this is the typical poverty line in low-income countries. World Bank figures indicate that about 1.3 billion people live on less than $1 a day. Twenty-seven countries in which over 25 percent of the population lives with resources at less than this level were counted, as were fourteen countries (Guatemala, Guinea-Bissau, Honduras, India, Kenya, Lesotho, Madagascar, Nepal, Niger, Peru, Rwanda, Senegal, Uganda, Zambia) where approximately half or more of the population lives on less than $1 a day.

It is clear that while relative poverty is a serious moral and political issue in industrial countries, absolute poverty—at levels unheard of in industrial countries—is a far more serious problem in much of the rest of the world.

The study of poverty is a difficult field, and is not properly a purely sociological endeavor. As even this brief overview shows, a thorough understanding requires the combined talents of sociologists, economists, demographers, political scientists, historians, and philosophers. All these fields have contributed to our understanding of the phenomenon.

references

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——1970 The Unheavenly City. Boston: Little, Brown.

Cain, Glen 1985 "Comments on Murray's Analysis of the Impact of the War on Poverty on the Labor Market Behavior of the Poor." In Sara McLanahan, et al., eds., Losing Ground: A Critique, Special Report No. 38. Institute for Research on Poverty, University of Wisconsin.

Feagin, Joe R. 1975 Subordinating the Poor: Welfare andAmerican Beliefs. Englewood Cliffs, N.J.: Prentice-Hall.

Haveman, Robert H. 1987 Poverty Policy and PovertyResearch: The Great Society and the Social Sciences. Madison: University of Wisconsin Press.

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Wayne J. Villemez

POVERTY

POVERTY. While aspects of poverty in the United States have changed significantly since colonial times, debates about how best to alleviate this condition continue to revolve around issues of morality as well as economics. In eighteenth-and early-nineteenth-century America, most people worked throughout their lives at a succession of unstable jobs, under unhealthy conditions. Widows, immigrants, the ill, and the elderly generally had few sources of support outside their own poor families. Town-ships and counties resorted to such drastic solutions as auctioning off poor local residents to local farmers. Indigent nonresidents would simply be sent out of town. The primary form of public assistance, known as "out-door relief," consisted of food, fuel, or small amounts of money. Poorhouses were founded to serve the indigent more cheaply than outdoor relief while discouraging them from applying for further public assistance. Especially in the North, poorhouses attempted to improve their residents' personal habits. Supervised work, such as farming, weaving, and furniture building, was required; alcohol was forbidden.

Poorhouses became notorious for overcrowding, filth, disease, and corrupt management. Reformers also increasingly criticized outdoor relief for demoralizing the poor and attracting idlers and drunks. By the Civil War (1861–1865), private relief associations run by evangelical Protestants, immigrant groups, and upper-class women's groups had begun to assume a more bureaucratic form. The Charity Organization Society, founded in Buffalo, New York, in 1877 (chapters were established in most U.S. cities by 1892) attempted to systematize relief by sending volunteers to investigate the circumstances of each applicant and advise them on how to live a respectable life. Handouts were to be given only in cases of extreme need. This approach, known as "scientific charity," proved impractical. Yet elements of its method evolved into the caseworker system of social welfare agencies.

At the end of the nineteenth century, one-fifth to one-quarter of the poorhouse population was long-term—primarily elderly people, along with the mentally ill and the chronically sick. Most inmates—out-of-work men, or women giving birth to illegitimate children—stayed only for a week or two at a time. Poor children were generally separated from their parents and moved into orphan asylums. Increasingly, the able-bodied homeless slept on police station floors and in the new shelters (municipal houses or wayfarers' lodges) that began to open around the turn of the century.

Defining Poverty Levels

Attempts to define poverty levels in the United States have long been arbitrary and controversial. From about 1899 to 1946, poverty minimum subsistence levels were based on "standard budgets"—goods and services a family of a certain size would need to live at a certain level. In his 1904 book Poverty Social Worker, Robert Hunter set one of the first national poverty line figures: below $460 annually for a five-person family in the North; below $300 for the same size family in the South. A study commissioned by the Congressional Joint Committee on the Economic Report in 1949 determined the poverty line to be $1,000 for farm families and $2,000 for nonfarm families.

In 1965, the federal government adopted landmark poverty thresholds, devised by economist Molly Orshansky, that took into account household sizes and types (such as elderly or nonelderly). Specifying an amount of money adequate for a family might be fraught with difficulties, Orshansky wrote, but it was possible to determine a level that was clearly insufficient. She based her figures on information from the Department of Agriculture, using the "economy" food plan—the cheapest of the four standard food plans, intended for "temporary or emergency use when funds are low"—and a survey showing that families of three or more people spent about one-third of their after-tax income on food. Lacking minimum-need standards for other household necessities (such as housing, clothing, and transportation), Orshansky simply multiplied these food costs by three to determine minimum family budgets.

In 1969, the thresholds began to be indexed to the Consumer Price Index rather than the cost of the economy food plan. The weighted average poverty thresholds established by the U.S. Census Bureau for 2001 range from $8,494 for an individual 65 or older to $39,413 for a family of nine people or more with one related child under eighteen.

This measurement of poverty has been widely criticized. It does not account for noncash government benefits, such as free school lunches or food stamps, and it fails to account for geographic differences in the cost of living. Critics also believe the thresholds do not properly reflect the overall rise in U.S. income since the 1960s.

Who Are the Poor?

Measurements of the extent of poverty in the United States depend, of course, on how it is defined. Poverty is a relative term; it must be understood differently for an affluent postindustrial culture than for a developing country. As the economist John Kenneth Galbraith wrote, "People are poverty-stricken when their income, even if adequate for survival, falls markedly behind that of the community."

In his groundbreaking 1962 book The Other America: Poverty in the United States, Michael Harrington called attention to a group of between 40 million and 50 million Americans (20 to 25 percent of the population at that time) living without adequate nutrition, housing, medical care, and education—people deprived of the standard of living shared by the rest of society. Harrington derived his figures from several sources, including a late-1950s survey by sociologist Robert J. Lampman and family budget levels from the Bureau of Labor Statistics.

In 2000, 11.3 percent of the population—31.1 million people—were considered poor, continuing a decline in poverty that began during the economic boom of the mid-1990s, when the poor accounted for 14.5 percent of the population. Before then, the last major decline occurred between 1960, when the rate was 22.2 percent, and 1973 (11.1 percent).

As of 2002, child poverty rates also had fallen since their peak in 1993. Yet more than 11 million children—16.2 percent of all Americans 18 years old or younger—were living in poverty, about the same number recorded in 1980. This group included 17 percent of all children under the age of six. About 5 million children were living in extreme poverty, in families with incomes less than half of the poverty line. Among African Americans, the childhood poverty rate was 30 percent; among Latino families it was 28 percent.

The enormity of this continuing problem cannot be overstressed. The infant mortality rate is more than 50 percent higher in poor families. Children growing up in poverty are more likely to drop out of high school and become parents in their teens, more likely to have junk food diets that predispose them to childhood obesity and diabetes, more likely to suffer chronic health conditions and mental retardation, and more likely to lack positive role models for academic and job success. Thirty-five percent of single-parent families live in poverty, more than twice the national average. Teenagers in poor families are more likely than other teens to be single parents. Poor single parents attempting to join the workforce are seriously hampered by the need to find affordable quality health care and child care (which can consume more than 20 percent of a poor working mother's income).

Another way to look at poverty by the numbers is to see how total income is shared in the United States and whether the poor are closing the gap between themselves and the rest of society. Harrington noted that the increase in the share of personal income earned by the poorest one-fifth of the population between 1935 and 1945 was reversed between 1945 and 1958. The poor increased their share in the late 1960s, only to see these gains reversed once more, beginning in the 1980s.

In 1968, the Citizens Board of Inquiry Into Hunger and Malnutrition in America estimated that 14 million Americans were going hungry. Nearly thirty years later, the U.S. Department of Agriculture reported that nearly 35 million Americans were unable to supply their families with sufficient amounts of food. Other poverty markers include lack of education: The poverty rate for high school dropouts is three times the rate for those who have a high school diploma.

In 1960, the federal Commission on Rural Poverty report, The People Left Behind, found that nearly one-third of rural Americans lived in poverty. Their homes were substandard, their access to health care was rare, and their education—particularly among the children of black field workers—was minimal. By the late 1990s, the percentage of poor rural Americans declined to 16 percent, partly due to mechanization and closure of coal mines in Appalachia, which caused workers to migrate to urban areas. Electricity and plumbing are now standard, but isolated rural residents have fewer child care options and social and educational services than their urban peers.

The nearly 9 million rural poor—one-fifth of the poor population—are 55 percent white, 32 percent black, and 8 percent Hispanic. Migrant field workers from Mexico and Central America, who struggle to support families on substandard pay, generally live in crowded, makeshift housing. Native Americans are also hard hit by poverty; more than a quarter of the population lives below the poverty line. On reservations, the unemployment rate is three times the average for rest of the U.S. population, with high levels of alcoholism and tuberculosis as well.

While the stereotype of the poor is of a group that goes from cradle to grave without improving its lot, there is substantial movement in and out of poverty. About one-third of the poor in any given year will not be among the poor the following year. Only 12 percent of the poor re-main poor for five or more years. A national study in the 1990s found that more than half of these "poverty spells" lasted one year or less. The reasons people slide into poverty include divorce, job loss, and incomes that do not keep pace with the cost of living, especially in low-wage occupations.

Other common misconceptions about the poor are not borne out by the figures. While poverty rates are greater among blacks and Hispanics than among other ethnic groups, non-Hispanic whites comprise 48 percent of the poor, African Americans account for 22.1 percent, and Hispanics, 22 percent. Less than half (42 percent) of the poor live in central cities, and less than 25 percent live in inner-city ghettos. Surprisingly, more than one-third (36 percent) of the poor live in the suburbs.

Official poverty figures do not include the homeless (or people in institutions—jails, mental institutions, foster care, nursing homes), but the best estimates put the homeless population at anywhere from 500,000 to more than 800,000. The ranks of the homeless swelled when enlightened social policy of the 1970s—deinstitutionalizing the mentally ill with the goal of reintegrating them into society—fell afoul of budget cutbacks and lack of community follow-through in the 1980s.

There are many economic and social reasons poverty remains a major problem in the United States. As American companies have opened manufacturing plants abroad, where labor is cheaper and lower benefit standards are the norm, well-paying, of ten unionized, jobs for blue-collar workers have disappeared from American cities. Other jobs have moved to the car-dependent suburbs, out of reach to a population largely dependent on public transportation. Meanwhile, the expanding service sector is split between high-paying professional employment in business and technology, and low-wage service industry jobs (janitors, maids, fast-food and retail workers). While one person is employed in about 60 percent of poor families, minimum-wage jobs—of ten lacking health and other benefits—do not pay enough to keep families from poverty. With little or no accumulated wealth, the poor and their families have no savings to fall back on if they lose a job or have unanticipated expenses.

The Welfare System

The foundation of the welfare system and the government's only program of mass public assistance—the Aid to Families with Dependent Children (AFDC)—was established during the Great Depression as part of the 1935 Economic Security Act. The federal government paid half the cost of the program for the families of needy children and established broad guidelines. State governments picked up the rest of the cost, set payment levels, and administered the program. Food Stamps (Food and Nutritional Assistance) also originated during the New Deal, as a means of supplementing farm income with coupons that could be redeemed for food.

Social programs in the United States tend to operate in thirty-year cycles. The "rediscovery" of poverty after the Great Depression began with the publication of such influential books as John Kenneth Galbraith's The Affluent Society (1958) and Michael Harrington's The Other America: Poverty in the United States (1962), in which he argued that the poor—in particular, children, the elderly, and nonwhites, increasingly isolated in urban ghettos—had become invisible to the middle-class white majority. Although President John F. Kennedy's support of antipoverty proposals was cut short by his assassination, President Lyndon B. Johnson announced a "War on Poverty" in his 1964 inaugural speech. The success of Johnson's Great Society program—which included urban renewal and a broadscale fight against poverty, disease, and lack of access to education and housing—was greatly helped by relatively low unemployment and inflation, a federal budget surplus, the growing civil rights movement, and an increasing level of public confidence in sociological studies. Certain aspects of these social programs were enhanced in the 1970s, under the administration of President Richard Nixon.

In 1967, the Kerner Commission, appointed by President Johnson to study the causes of the riots that swept American inner cities that year, recommended that the federal government establish "uniform national standards" of welfare aid "at least as high as the annual 'poverty level' of income" (which was then $3,335 for an urban family of four). The commission also advised that states be required to participate in the Unemployed Parents program of the AFDC and that welfare mothers of young children no longer be required to work.

AFDC cash benefits were pegged to the number of children in the family, which caused some critics to believe that women on welfare were having more children to boost the amount of their checks, or separating from the father of their children in order to qualify for this benefit. (However, while the proportion of mother-only households increased during the years of the program, the real value of the payments decreased.) About one-third of AFDC recipients were found to remain in the program for six or more years. The Family Support Act of 1988 expanded AFDC benefits to families with two unemployed parents and required absent parents to pay child support. Eight years later, however, AFDC was eliminated and replaced by block grants to states, which administer their own programs.

President Kennedy revived the food stamp program in 1961; nine years later, Congress set a minimum benefit level for food stamps—which were now free—and offered them at a low cost to families over the poverty line; eligibility was broadened later in the 1970s. All funds for the program, administered by state welfare agencies, are provided by the federal government.

Under Medicaid, established in 1965, the federal government pays matching funds to states to cover a portion of medical expenses for low-income elderly, blind, and disabled persons, and for members of low-income families with dependent children. States have considerable latitude in setting eligibility, benefits, and payments to service providers. In 1963, a physician had never examined 20 percent of Americans below the poverty level; in 1970, this number fell to 8 percent. Prenatal visits by pregnant women increased dramatically, which contributed to an overall drop in infant mortality of 33 percent (50 percent in some poor areas) between 1965 and 1972.

Initiated in 1972, Supplemental Security Income (SSI) gives cash benefits to elderly, blind, and disabled persons in order to bring their income to federally established minimum levels. The program is administered by the Social Security Administration, with some benefits supplemented by individual states.

Beginning in the 1970s, Section 8 Low-Income Housing—administered by the Department of Housing and Urban Development (HUD)—initiated payments to private developers who set aside apartments at below-market rates for low-income families. Now known as the Housing Choice Voucher Program, it accounts for more than half of federal funds spent on housing for the poor; low-rent public housing accounts for another 25 percent. Only about 19 percent of the poor receive housing benefits, however, compared with about 40 percent receiving cash benefits from AFDC and SSI. The Earned Income Tax Credit (EITC), expanded under the administrations of Presidents Ronald Reagan, George Bush, and Bill Clinton, gives workers a tax break based on their earned income, adjusted gross income, and the number of children they have. In 2001, the income of recipients with no qualifying children had to be less than $10,710; with two or more qualifying children, the income limit was $32,121. This program was appealing to policymakers because it rewards workers (benefits increase with increased income), helps families with children, and works through the tax code, with no need for a separate bureaucracy.

Other social programs have increased the availability of services to the poor, including day care for children, health care, work-training, special programs for agricultural workers, and free legal assistance. While Social Security, instituted in 1935, is not based on need—it is based on the amount of Social Security tax paid on wages—this entitlement, with its substantial monthly payments, has played a huge role in keeping the elderly from poverty.

The Welfare Backlash

Beginning in the mid-1970s, the phenomenon of the "inner city" as a cauldron of joblessness, major crime, drug addiction, teenage pregnancy, and welfare dependency began to make headlines. For more than a decade, liberals had decried the low level of benefits welfare clients received while conservatives argued that welfare breeds dependency. Increasingly, welfare applicants were the offspring of welfare families. Tabloid stories of "welfare queens" using their government stipend to buy Cadillacs only inflamed the debate. Many agreed that welfare served to tide people over when they hit bottom but created a subclass of citizens with little dignity or self-respect.

During the Reagan administration, many social programs were reduced in scope or eliminated. The self-perpetuating nature of poverty noted by influential sociologist Oscar Lewis—who coined the phrase "the culture of poverty"—was seized upon by conservatives eager to end welfare. Lewis's sympathetic description of the way six-year-old slum children in South America had become so accustomed to a hopeless view of the world that they seem unlikely to be able to escape from poverty was intended to shift attention from individual poverty victims to the culture of impoverished communities. But conservatives used his views to argue that the children of ghetto families lack a work ethic. This sentiment was exacerbated during the 1980s by lack of income growth among middle-class wage earners, which made many leery of "handouts" going to a group of ten perceived as undeserving. (In fact, nearly half the income the poor received came from wages; welfare accounted for only 25 percent of the total.)

By the 1992 presidential campaign, Bill Clinton was promising to "end welfare as we know it." The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 officially ended the entitlement status of welfare and (as revised in 1997) denied assistance to newly arrived legal emigrants. The goal of this program was to reduce the welfare rolls, increase the number of working poor, and reduce out-of-wedlock births.

AFDC was replaced by Temporary Assistance for Needy Families (TANF), a $16.5 billion block grant program to the states to fund "welfare-to-work" programs. Unlike AFDC, which supplied federal matching funds of one to four dollars for every dollar in state appropriations, TANF's block grants are not tied to state expenditures. The new rules require that 50 percent of able-bodied adults receiving assistance be cut off after two years, and that 80 percent of each state's welfare recipients receive no more than five years of aid in a lifetime. Adults who do not have children under age six must work at least 30 hours per week to receive food stamps; unmarried teenage mothers receiving welfare benefits must attend school and live with an adult.

The burden on former welfare recipients has been significant. Finding and keeping even a temporary, low-paid job is generally a daunting undertaking for someone with a shaky or nonexistent job history, few skills, and little experience with the schedules and social skills working people take for granted. People new to the job market of ten must find the money for child care and transportation to work. Cut off from Medicaid benefits after one year and usually uninsured at work, this population has become even more vulnerable to health crises.

Changing Views of the Poor

The prevailing nineteenth-century view of the poor, whether religious or sectarian, rested on the assumption that weak moral fiber was to blame for their situation. In the twentieth century, thinking about poverty shifted to a greater emphasis on social and environmental factors. Robert Hunter, author of Poverty (1904), boldly declared that most of the poor "are bred of miserable and unjust social conditions. …" In Democracy and Social Ethics (1902), Jane Addams—cofounder of Hull House, which offered community services to the poor in Chicago—questioned the reformers' insistence on thrift and hard work as specific virtues for the poor, because the rich were not held to the same standards. The best way to ensure virtuous behavior on the part of the poor, she wrote, was to push for shorter hours, better wages (including a level of pay for women that would keep them from turning to prostitution), restrictions on child labor, and alternatives to the temptations of the saloon.

Yet overreliance on government handouts continued to be seen as a moral issue even in the midst of the Great Depression, when New Deal policies were created to promote economic recovery, not specifically to eliminate poverty. In 1935, President Franklin D. Roosevelt said, "Continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber."

In the 1960s, the reigning belief was that behavior associated with the ghetto was due not to ingrained cultural characteristics, but rather to segregation and a history of limited opportunities that—coupled with bitter personal experiences—made the prospect of a better life through hard work seem unrealistic. Urban field studies undertaken in the late 1960s were interpreted in light of this point of view.

Black ghettos were once home to middle-class as well as lower-class African Americans. As William Julius Wilson has pointed out, this social geography offered young people a range of role models and job contacts. By the 1970s, the growth of suburbs and civil rights legislation had enabled middle-class African Americans to move out of the inner city. Without an adequate tax base to fund good schools and other city services or middle-class incomes to support banks, shops, and other services, neighborhoods declined. High-density housing projects built in the 1950s to replace old slums tore apart the tight-knit fabric of communities and created an apathetic culture that became the festering center of unemployment, drug addiction, and crime. The inner-city population is also a particularly youthful one, and the fourteen-to twenty-five-year-old group is statistically more likely to commit crime, be welfare dependent, and have out-of-wedlock births.

One of the most controversial documents of the 1960s was "The Negro Family: The Case for National Action," by Daniel Patrick Moynihan, a white paper issued by the Department of Labor in 1965. Moynihan wrote that the instability of black families was a primary cause of poverty, and that welfare policies should encourage intact families and work as a means of integrating these families into the mainstream. Critics took Moynihan to task for blaming the poor rather than advocating societal change.

Another influential book, Regulating the Poor: The Functions of Public Welfare, by Frances Fox Piven and Richard A. Cloward (1971), proposed that welfare recipients should not be encouraged to work at a menial job just to bring in some money and avoid idleness—they should hold out for jobs that pay a living wage—and that welfare is necessary to the economic survival of women, whose jobs traditionally pay less than men's.

Charles Murray's book Losing Ground: American Social Policy, 1950–1980, published in 1984, was one of several prominent studies that decried liberal social policies for creating a welfare-dependent population during the 1970s. In Murray's view, the federal government should withdraw from the welfare business, and the poor—except for the truly deserving, whose needs would be served by private charity and local government—should take responsibility for their own lives. Murray's critics say the economic downturn was responsible for increased unemployment, which in turn made more people poor during the 1970s. Also to blame, they say, was a decline in real wages—the actual purchasing power of income—and the effect of baby boomers entering the job market. Critics maintain that the poverty rate would have risen even farther had Great Society programs not been in place.

BIBLIOGRAPHY

Bane, Mary Jo, and David T. Ellwood. Welfare Realities: From Rhetoric to Reform. Cambridge, Mass.: Harvard University Press, 1994.

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Danziger, Sheldon H., et al. Confronting Poverty: Prescriptions for Change. Cambridge, Mass.: Harvard University Press, 1994.

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Edin, Kathryn, and Laura Lein. Making Ends Meet: How Single Mothers Survive Welfare and Low-Wage Work. New York: Russell Sage Foundation, 1997.

Harrington, Michael. The Other America: Poverty in the United States. New York: Macmillan. 1962.

Jencks, Christopher. Rethinking Social Policy: Race, Poverty, and the Underclass. Cambridge, Mass.: Harvard University Press, 1992.

———, and Paul E. Peterson, eds. The Urban Underclass. Washington, D.C.: Brookings Institute, 1991.

Katz, Michael B. In the Shadow of the Poorhouse: A Social History of Welfare in America. New York: Basic Books, 1996.

Lavelle, Robert, et al. America's New War on Poverty: A Reader for Action. San Francisco: KQED Books, 1995.

Moynihan, Daniel P. Maximum Feasible Misunderstanding: Community Action in the War on Poverty. New York: The Free Press, 1969.

Murray, Charles. Losing Ground: American Social Policy, 1950– 1980. New York: Basic Books, 1984.

O'Hare, William P. A New Look at Poverty in America. Washington, D.C.: Populations Reference Bureau, Inc., vol. 51, no. 2, Sept. 1996.

Schwartz, Joel. Fighting Poverty with Virtue: Moral Reform and America's Urban Poor, 1825–2000. Bloomington: Indiana University Press, 2000.

Schwarz, John E., and Thomas J. Volgy. The Forgotten Americans. New York: Norton, 1992.

Wilson, William Julius. The Truly Disadvantaged: The Inner City, the Underclass, and Public Policy. Chicago: University of Chicago Press, 1987.

CathyCurtis

See alsoUrban Redevelopment ; Urbanization ; andvol. 9:The New American Poverty ; In the Slums, 1890 .