Outline

1
Outline

• Comparative Poverty
• Distribution of Income and Wealth
• The Fluidity of Poverty
• Intra-Generational Mobility
• Intergenerational Mobility
• Poverty and Individual Attributes
• Human Capital and the Culture of Poverty
• Fundraising/Campus Visit
• Lots and lots and lots of datadont have a
  stroke. Be attentive to the bigger picture, the
  conclusions we draw, the general trends

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Review Question Problems

• Despite size of nation and size of population,
  public policy reduced poverty
• Key difference between US and other advanced
  industrial capitalist nations
• Social Safety netlow wages

3
Politics and Poverty

• Not because other nations have lower standard of
  Standard of Living
• Or that our poor as not as poor (See chart 2.2)

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Social Welfare Spending, (as pct. of gross
national product)
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Anti-Poverty Programs constitute about 14 of the
budgetCould change that to 25 OR simply
increase the budgetboth would result in large
political fights
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Funding the Welfare State Household Tax Wedge,
2003
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Tax Policy
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Poverty and Inequality

• Wealth and Income are distributed differently in
  different capitalist societies
• If some have moreothers have lesslets explore

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This American life

• Income-money, wages, and payments that are
  periodically received from investments
• For most people a paycheck
• 10 Volunteers Up Front

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Americas Middle Class

• What does the data show about the distribution of
  income in America?

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All CapitalistBut Inequality Varies

• Ratio of Top 10 to Bottom 10

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This American life

• Wealth-assets, particularly those that are income
  producing.
• For most people (60) their homefor many, no
  wealth
• 10 Volunteers Up Front

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Fewer People Own More Wealth

• 1976 richest 10 of the U.S. population owned
  50 of all wealth.

• 2001 richest 10 of
• the U.S. population owned 70 of all wealth.

Source Edward N. Wolff, Recent Trends in
Wealth Ownership
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Try this with a pizza tonight
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US has highest rate of inequality in Wealth
Distribution (Gini Index closer to 100 the gt
inequality)
Japan 24.9
Sweden 25
Germany 30
UK 36
US 40
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The Fluid Nature of Poverty

• More musical chairs shortlybut for now,
  fluidity
• 3. Rank suggests that we need to recognize the
  fluid nature of poverty. Please explain what he
  means by this, being sure to cite the text as
  evidence in your answer.

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Weaving in and out

• 3. Rank suggests that we need to recognize the
  fluid nature of poverty. Please explain what he
  means by this, being sure to cite the text as
  evidence in your answer.
• Individuals ands households tend to weave their
  way in and out of poverty depending on the
  occurrence or nonoccurrence of detrimental events
  (e.g. job loss, family disruption, ill health).
  Of course, the amount by which individuals find
  themselves above the poverty line is often quite
  modest, so the future detrimental events can
  throw them back below the poverty line(Rank
  2005 30).

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Weaving in and out of poverty

• Social Mobility
• The movement between different positions within
  a society.
• Occupations, income brackets, social classes

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Social Mobility

• Sociologists Study Two Forms of Social Mobility
• Intergenerational- compares the position of
  parents to that of their children
• If Parents were middle class, how likely are you
  be very wealthy
• Intra-generational- comparing the position of a
  person over an extended period of time.
• Start out as a mail clerk and end up CEO
• Both concepts tell us something useful about
  society

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Intra-generational Poverty

• newer longitudinal data show that a majority of
  poor individuals actually remain poor for only
  short periods of time and a relatively high
  proportion of people have experienced poverty at
  one point or another. (Iceland, p.48)
• Spells of poverty
• 45 percent end within 1 year
• 70 percent end within 3 years
• Only 12 percent last 10 years or more
• But what is the rest of the story

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The Poverty Yo-Yo

• But despite the shortness of many poverty
  spells, it is quite common for people who leave
  poverty to fall back into it a short time later.
• about ½ of those who end poverty spells fall
  back into it a short time later. (Iceland, p.49)
• 50 of Blacks and 30 of whites who fall into
  poverty in some year will be poor in 5 or more of
  the next ten years. (Iceland, p.49)

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Intergenerational Poverty

• About 1 in 4 who were consistently poor before
  age 17 were still poor at ages 25-27 (Iceland,
  p.50)
• African Americans, 1 in 3Whites, 1 in 12
• Forces us to consider why the difference?
• Geography, culture, discrimination?
• So 75 of kids born in poor families will not
  poor in their late 20s, BUT
• These kids are more likely to be poor than kids
  born to the non-poor,
• Most will remain at the bottom of the class
  structurenear poorsee next slide

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Comparative MobilityUS Lags

• By international standards, the United States has
  an unusually low level of intergenerational
  mobility our parents income is highly
  predictive of our incomes as adults.
• Recent research surveyed by the Organization for
  Economic Cooperation and Development, a
  governmental think tank for the rich nations,
  found that mobility in the United States is lower
  than in other industrial countries. One study
  found that mobility between generations people
  doing better or worse than their parents is
  weaker in America than in Denmark, Austria,
  Norway, Finland, Canada, Sweden, Germany, Spain
  and France. In America, there is more than a 40
  percent chance that if a father is in the bottom
  fifth of the earnings distribution, his son will
  end up there, too. In Denmark, the equivalent
  odds are under 25 percent, and they are less than
  30 percent in Britain (NYT 7/13/07).
• Explanations as to why?

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SoAt this point

• You should know have a better idea of how we
  measure poverty
• You should have a better idea of the factshow
  much poverty, how persistent is it, how US
  compares
• You have been introduced to the ideas that the
  labor market and government programs impact
  poverty rates
• Now lets consider explanations for poverty

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• 1. Rank suggests that most social scientists and
  commentators have in effect focused on who loses
  out at the economic game, rather than addressing
  the fact that the game producers losers in the
  first place(Rank 2005 50). Please explain what
  Rank means by this statement. In might help to
  read the whole chapter before you answer this
  question.
• More volunteers please

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• Most social scientists (sociologists, economists,
  etc.) focus on individual attributes of the poor
• Thats finebut Rank thinks that is inadequateit
  focuses on who loses the game rather than noting
  that the game produces losers.

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Individual Attributes Often Pointed To

• Human Capital Education, training, experience
  and other qualities that increase worth in the
  labor market
• College degree allows more job opportunities than
  a HS degree
• Increases in human capital usually decreases
  labor market competition, and thus boost pay
  (Brain surgeons vs. janitor)
• Lack of human capital decreases job opportunities
• If there is a correlation between lack of human
  capital and povertyif the more human capital you
  have, the less likely you are to be poorwhat is
  the obvious public policy strategywhat should we
  try to do?

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Individual Attributes Sometimes Pointed To

• Beyond human capital, some focus on culture
• Culture of poverty
• a theory that explains poverty as the result of a
  set of norms and values- a culture- that is
  uniquely characteristic of the poor
• Poor are governed by own code of values and
  behavior
• Eroded work ethic, dependency on government
  programs
• Lack of educational aspirations and achievement
• Increased acceptance of single parenthood
• Criminal activity
• Alcohol and drub abuse

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Some problems with Culture of PovertyNot Much
Evidence

• Overall, studies examining cultural differences
  do not provide overwhelming evidence that most of
  the poor people adhere to very different value
  systems than non-poor people (Iceland 2006 97)
• Segments of the poor might possess cultural
  differences, but they are small percentage of the
  overall population of poor people
• Underclass
• the element of the poor who are chronically
  unemployed, largely dependent on social welfare,
  and socially isolated from the mainstream
  society.
• Little Connection to Labor Market
• Geographic Concentration Isolation

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Blue Vertical Lines are Economic Recessions

• What happens to poverty when the economy stops
  growing...how does this pose a problems to
  culture based explanations?

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Structural Explanations

• Thats finebut Rank thinks that is inadequateit
  focuses on who loses the game rather than noting
  that the game produces losers.

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Next

• Well further explore the causes of poverty

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Outline

• Structure of Poverty
• The Labor Market and Poverty
• The Safety Net and Poverty
• The Likelihood of Poverty
• Structural Vulnerability Explanation
• TAP program 3-5 M,T,W
• Mandatory Reflection question due next Tuesday
• Review questionsso, so. This is 40 of your
  gradeIm not going to just give these points
  awaytake these seriouslywork at them

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• 2. You are at party with a guy named Rush who
  tells you that in the United States there are
  plenty of good jobs for all who want them and
  therefore there is no reason anyone should be
  poor. Another guy named Mark is at the party and
  he tells Rush that he is wrong, the American
  labor market has demonstrated an inability to
  support all families. After reading chapter 3,
  please explain what Mark means, being sure to
  incorporate at least two pieces of evidence from
  the text into your answer.

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Inability of the Labor Market to Support All
Families

• To reduce poverty, many focus on labor supply
• Improve human capital
• Work for welfare to change attitudes of poor
• Rank suggests we need to focus on labor demand
• Increasing the number of quality jobs
• Rainwater and Burtless report that 25 of all
  full time workers are low wage workersfar more
  than in other nations
• Note next slide

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Full Time, Year Round Poverty Wages (family of
four)
                                                  
                                                  
                      
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Inability of the Labor Market to Support All
Families

• Beyond low wages, there is also a mismatch
  between the number of available jobs and the
  number of those who need them(Rank 2005 54)
• Even when economy is boomingthere is
  unemployment
• Rank notes that in 2001, that meant 7 million
  people

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Inability of the Labor Market to Support All
Families

• Are the jobs that household head are working at
  capable of getting a family out of poverty?
• Lets just consider all households working full
  time?

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Inability of the Labor Market to Support All
Families

• Are the jobs that household head are working at
  capable of getting a family out of poverty?
• 9.4 of households were working at jobs in which
  their earnings could not pull a family out of
  poverty

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• 3. You are at party with a guy named Bill who
  tells you that there are vast amounts of tax
  dollars being spent on public assistance and
  that America does more than any other nation to
  reduce poverty. Another guy named Mark is at the
  party and he tells Bill thats just not true and
  suggests that US efforts to reduce poverty are
  actually minimal. After reading chapter 3, please
  explain what Mark means, being sure to
  incorporate at least two pieces of evidence from
  the text into your answer

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Ineffectiveness of Social Safety Net

• US allocates smaller proportion of Gross Domestic
  Product to social welfare

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Less Generous Safety Net

• Means tested health care for poorest (medicaid)
  vs. healthcare for all citizens
• Less generous unemployment
• How would this relate to the number of low wage
  jobs available in an economy?

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Ineffectiveness of Social Safety Net
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• 4. You are at party with a guy named Cant
  Happentome. He tells you that poverty only
  affects a small number of Americans so we need
  not worry about it. Another guy named Mark is at
  the party and he tells Cant recent research
  suggests he is wrong about the risk of poverty,
  and that more people will experience poverty than
  he thinks. After reading chapter 3, please
  explain what Mark means, being sure to
  incorporate at least one piece of evidence from
  the text into your answer.

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Widespread Life Course Risk of Poverty

• Someone interpret

Table 3.5 Cumulative Percent of Americans Experiencing Poverty (Ranke 200563) Table 3.5 Cumulative Percent of Americans Experiencing Poverty (Ranke 200563) Table 3.5 Cumulative Percent of Americans Experiencing Poverty (Ranke 200563) Table 3.5 Cumulative Percent of Americans Experiencing Poverty (Ranke 200563)
Level of Poverty Level of Poverty Level of Poverty Level of Poverty
Age Below 1.0 of poverty Below 1.25 Below 1.5
20 10.6 15 19.1
35 31.4 39 46.9
55 45.0 52.8 61
75 58.5 68 76
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Widespread Life Course Risk of Poverty

• Life Course analysis of poverty shows that by old
  age, 58.5 of us will experience poverty at some
  point in our lives

Table 3.5 Cumulative Percent of Americans Experiencing Poverty (Ranke 200563) Table 3.5 Cumulative Percent of Americans Experiencing Poverty (Ranke 200563) Table 3.5 Cumulative Percent of Americans Experiencing Poverty (Ranke 200563) Table 3.5 Cumulative Percent of Americans Experiencing Poverty (Ranke 200563)
Level of Poverty Level of Poverty Level of Poverty Level of Poverty
Age Below 1.0 of poverty Below 1.25 Below 1.5
20 10.6 15 19.1
35 31.4 39 46.9
55 45.0 52.8 61
75 58.5 68 76
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Widespread Life Course Risk of Poverty

• a clear majority of Americans will experience
  poverty at some point during their lifetime.
  Rather than an isolated event that occurs only
  among what has been labeled the underclass,
  poverty is an experience that the majority of
  American will encounter firsthand during
  adulthood(Rank 2005 65)

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•  5. Rank develops a structural vulnerability
  explanation of poverty that consists of three
  components. In your own words, summarize his
  explanations. Be sure to touch on all three
  components. 

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Structural Vulnerability Explanation AKAwho is
most likely to lose at musical chairs

• Certain characteristics make some people more
  vulnerable to poverty if they lose a job, have a
  health crisis or experience a family crisis
• Lack of human capital

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Structural Vulnerability Explanation AKAwho is
most likely to lose at musical chairs

• Acquisition of Human Capital is strongly
  influenced by social class
• Monopoly game
• I start with 5000 and 3 good properties Bernard
  gets 1,500 and no properties Melissa gets 250
• If we play hundreds of gameswho is most likely
  to win and lose?

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Structural Vulnerability Explanation AKAwho is
most likely to lose at musical chairs

• Acquisition of Human Capital is strongly
  influenced by social class
• Life
• Good pre-natal care, normal brain development,
  educated parents strong vocabulary (2000), baby
  ivy pre-school _at_ 24,000 a year, excellent K-12
  school, private tutors, SAT courses, college
• Bad pre-natal care, abnormal brain development,
  limited vocabulary (600), cruddy pre-school,
  lousy schools, you guys, no SAT
  coursesCollege?...Note the next chart

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Interpret
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Structural Vulnerability Explanation AKAwho is
most likely to lose at musical chairs

• Certain characteristics make some people more
  vulnerable to poverty if they lose a job, have a
  health crisis or experience a family crisis
• Lack of Human Capital
• Acquisition of Human Capital is strongly
  influenced by social class
• Individual Characteristics help explain who
  loses, but structural forces ensure that there
  will be losers in the first place
• Note Ranks Chart

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Structural Vulnerability Model

• We will explore both
• Rank provides us with a structural account of the
  game
• Rank, Wilson, Massey and others that we will read
  help us understand why some (inner city African
  Americans women) are more likely to lose game

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Fundraising and a Trip to Campus

• A moderator to facilitate discussion
• Fundraising Ideas
• Assignment of tasks
• Trip to Campus
• Ideas?
• Assignment of tasks