Introduction
As two sides of the same coin, poverty and inequality have far-reaching effects on American society. This piece examines the official American government definition of poverty, the demographics most severely affected by poverty, and the extent of the income gap in the United States. The mentioned issue appears to be pressing for the US; thus, it seems relevant to discuss.
How the United States Government Identifies Poverty
The official poverty line set by the United States government is directly proportional to a person’s income. To qualify for federal assistance programs such as Medicaid and SNAP, income must fall below specific levels established by the Department of Health and Human Services (HHS). The national poverty level for a family in 2021 was approximately $26,500, adjusted for inflation, family size, and region, which corresponds to 11.6% of people living in poverty (USA Facts).
Groups Disproportionately in Poverty
Multiple demographic subsets are disproportionately affected by poverty. The rates of child poverty, for example, are much greater than those of the general population. The poverty rate for children under the age of 18 in 2021 was 15.3%, which was higher than the general poverty rate of 11.6% in the USA (USA Facts). African Americans in the United States, in particular, endure higher poverty rates than non-Hispanic whites. Discrimination and gaps in educational and occupational opportunities are two historical and structural elements that contribute to this disparity.
There is a correlation between poverty and the prevalence of single moms in their families. This gap is partly due to the particular economic difficulties faced by single parents, including fewer daycare options and reduced earning potential. The poverty rate is persistently greater in rural regions than in urban ones (Reeves and Rothwell). Low wages, poor health care, and a lack of educational opportunities all contribute to the cycle of poverty that plagues these areas. It is more difficult for disabled people to find gainful jobs, and they may have to depend on government disability aid, which often leaves them living at or below the poverty level.
Widespreadness of Economic Disparity
In recent decades, Americans have become increasingly aware of the issue of economic disparity. Several factors contribute to this widening gap. Many low- and middle-income employees have seen little to no increase in their salaries over the past several years, despite the steady rise in their living costs. This disparity widens the gap between the well-off and the impoverished.
Even greater wealth inequality exists, with the wealthiest people in the country owning a disproportionate share of the country’s wealth. The ability of low-income individuals to climb the economic ladder is significantly hindered by the current wealth gap (Reeves and Rothwell). Tax laws have contributed to income disparity by allowing the wealthy to pay a lesser share of their income in taxes relative to the middle class and the poor.
Income disparity is further exacerbated by a lack of opportunities to advance one’s education. It is a vicious circle, as students from wealthier families have easier access to more extensive educational opportunities. The lack of universal healthcare exacerbates the problem, as those with lower incomes may struggle to afford necessary medical treatment. It should also be noted that in the US and Canada, the average Gini Coefficient, which stands for an indicator of inequality, is higher than in Europe (Table 1). The consequences for health and the budget are dire as a result.
Table 1. Average Gini Coefficient and GDP Per Capita By Region in 2010 (Santacreu and Zhu)
Conclusion
The effects of poverty and inequality are far-reaching and interconnected. Children, minorities, single-parent families, and those with disabilities are more at risk of poverty, even though the U.S. government uses income levels to define poverty. Wage stagnation, wealth disparities, tax policies, and unequal access to education and healthcare all contribute to income inequality, a significant barrier to economic growth.
Works Cited
Reeves, Richard, and Jonathan Rothwell. “Class and COVID: How the Less Affluent Face Double Risks.” Brookings, 2020.
Santacreu, Ana, and Heting Zhu. “How Does U.S. Income Inequality Compare Worldwide?” Federal Reserve Bank of St. Louis, 2017.
USA Facts. “Percent of people in poverty.” USA Facts.