Greater Poverty in the United States
There is greater poverty in the United States of America than the government's poverty formula indicates. Because of the formula, more Americans live in poverty than people who apply for federal aid. As a result, the steps put in place to reduce poverty are ineffective, and the situation is doomed to stay the same before new and more reliable ways of determining who lives in poverty are created.
Inequality and Its Effect on Wages
Furthermore, inequality has a huge effect on people's wages. If racism is minimized, the disadvantaged, who are disproportionately from minority groups, are likely to remain.
Outdated Poverty Calculation
The government uses an outdated method of calculating the poverty threshold of families to determine the people that are poor in the country. According to the class text, the process used to calculate poverty involves multiplying the cost of food by three and take takes into account the number of people in the family. The method was developed almost a half a century ago. The situations during the time were different from how things are now in the USA. Food took a significant percentage of the expenditures of families when the formula was developed. Also, the method was accurate at the time. Thus, early safety nets that were put by administrations of President Kennedy and Johnson were very successful. However, changes in the economy and the society have led to changes such as food taking a considerably lower amount of money as compared to what it took in the 60s and 70s. Therefore the definition of poverty is flawed. The formula also fails to consider the different economic situations of various places in the country. For instance, there are states in which the costs of housing are very high. When the prices of other things become high relative to the costs of food, the formula of the government becomes inaccurate leading to many people who are poor not qualifying for the government subsidy programs and safety nets.
Inefficiency of Government Safety Nets
The government safety nets are inefficient because they fail to factor in the effects of discrimination in the rates of poverty and also use the flawed formula discussed above to decide who qualifies as poor. The methods like giving food subsidies and tax credits are responsible for the rising poverty levels. The methods lock out people who are thought to be above the poverty line. Some of the people who may be above the poverty line according to the government formulae have expenses such as insurance and medical expenses that the formula does not consider. Also, because of gender discrimination and other minority related factors, some families are needy. For example, single parented families have been found to be affected a lot by poverty. Families led by female heads are especially more predisposed to poverty because of gender discrimination in employment. Therefore, a more comprehensive method of determining the people in poverty that considered more factors than just meals should be found to reduce poverty levels significantly.
A Call for Change
In summary, the government uses an outdated method to determine the people living below the poverty line. Thus, many people who deserve help are locked out leading to the middle-class people dropping below the poverty line and therefore, increasing the rates of poverty rather than reducing it. A formula that considers factors such as insurance premiums, housing costs, and health costs should be considered to alleviate poverty in the country.
