Poverty is a world occurrence, which is primarily defined regarding material possessions and income levels. However, in US poverty is measured regarding goods and services that are considered vital to the society that is food, shelter and clothing. The ability to provide basic needs determines poverty threshold that U.S government utilizes in measuring poverty. In this case, income is the scarce resource which is required to enhance the provision of food, shelter and clothing that are responsible for maintaining good health conditions. United States poverty is cyclical in nature in that approximately 13-17% people live below the poverty line at any time of the year. While 40% of the citizens fall below the poverty threshold at specified periods within a period of 10years. However, most Americans of between ages of 24, around 58.5% spend a year below the poverty line while 23% of the elderly are in poverty. Hence, 49 million people in the US live in poverty.
Poverty in the US is attached to two main problems; the prevalence of low wages for the workers and lack of income to those who do not work. The greater percentage of the poor Americans are those working and at some point there in poverty and another time out, hence, showing evidence of cyclical poverty in the US. However, the lesser percent of the citizens not working or involved in few jobs tend to be impoverished at every point of the year. Regarding workers’ wage rates, the low-wage rate describes individuals with income which is not sufficient enough to meet the basic needs that ensure living standards above the poverty threshold. Such people are not considered indigent, but they are poor as they have to struggle to make ends meet. Besides, job loss is also associated with poverty levels in the USA. As in 2007, poverty rates for the unemployed were 21.5% and that for individuals employed on a full-time basis was 2.5%.
According to the Feeding study of America, the population that is significantly affected by poverty levels is between ages 25. 3.5 million Children and teens are impoverished and are at a higher risk of hunger. On the contrary, the elderly provides a much lower reduced population, as only 20% of the people of the old are in poverty. According to the study, poverty was as a result of the following factors. First tax levels which had an inverse relationship with the child poverty and the country’s GDP. High tax rates were associated with high poverty levels, and low tax rates relate to low poverty rates. For example, from the study, New Hampshire, a state in the US has the least tax rates which are reflected by the low poverty rates of the 46 states. Additionally, the study indicated that educational levels determined the amount of income that one held. For instance, in 2007 the average earnings high school graduates were $31,337, those with bachelor’s degree earned $56, 826, professional degree holders earned $ 100,000, and those with less than 9th grade made $16,615. Therefore, income was said to be directly related to the educational levels.
Moreover, according to the Heritage Foundation report, the poverty rates in the USA also depend on the ethnic groups. From the report, only 21% of the USA children live in poverty while 46% of the African-American children live in poverty. The disparities in poverty levels based on race are as a result of racial discrimination where high paying job opportunities are availed to the Americans. Moreover, less paying jobs or no jobs at all to the other races, hence, high poverty rates.
Effects of Poverty on USA economy
Due, to the availability of a vast number of people living below the poverty line, there have been increased reports of crime. Studies have shown that poverty has raised the cost of offences to around 1.3 of the GDP. With the high crime rate, there has been reduced efficiency in commercial operations hence a reduction in the GDP. Additionally, due to poverty the productivity and economic output of the nation has been drastically reduced. This is because the government has focused on eradicating the poverty levels other than improving the economic productivity. Also, the value of health has been highly reduced resulting in an increase in the health expenditure. Inability to obtain basic needs, there has been many cases of health matters hence, increase in health spending.
Strategies used by the government towards Poverty
The government expands its capacity in enhancing access to essential goods and services. For instance, providing portable and affordable water, free education and housing, which are all crucial in ensuring that the persons with no jobs can meet their basic needs. The US government has made initiatives that provide aid in human services. The government utilises the 20/20 initiative that situates that 20% of the national budget and 20% of foreign aid is diverted to human services. Also, the government has shared the benefits of economic growth experienced in the US through increasing the chances of employment. The government has considered employment distribution through increasing its spending and setting aside funds for development projects that create job opportunities. Lastly, the government has discouraged discrimination on ethnic groups that has led most groups impoverished. US government has ensured that very US Republican attains equal education and job opportunities and equal treatment and payments of a minimum wage. As a result, the greater percent of the African American living in poverty has been reduced.
Other strategies towards poverty
Since high tax rates are associated with poverty high rates, to eradicate or lower the poverty levels; a new tax reform should be put in place. In this case, the tax rates are reduced, and equality ensured such that progressive tax is administered. Individuals with higher income are taxed more while those with lower income are taxed less. As a result, the burden to provide basic needs to the lower income earners is reduced hence reduced poverty rates. Additionally, provision of non-profit organisations and corporations is essential. The organisations aim will be to provide support to the society with the aim of improving the living standards of the impoverished areas. Since non-profit agencies are not interested in profit making, maximum support to the society is assured. The support includes; providing food and offering training and education or scholarships to children who have performed in 9th grade but cannot attain their degree due to lack of finances. By so doing, education which is positively related to income levels is enhanced among the needy individuals hence, reducing poverty levels.
In conclusion, with the incorporation of government and other strategies, the poverty levels will be significantly reduced, and productivity enhanced in the economy hence, the higher economic output will be attained in future. Provision of affordable education will ensure that all individuals regardless of the income levels attain education hence, employment which later brings in income. Also, lowered tax rates and utilisation of progressive taxes, has a positive impact on the income levels of the lower earners. Moreover, the support from the non-profit organisation ensures that the unemployed and the low-income earners have sufficient basic needs, hence enhancing a healthy living that reduces health expenditure. As a result, increased learning opportunities, lowered tax rates, low health spending, and increased employment rates will completely eradicate poverty levels in the US leading to extensive economic growth.