Question

This is all considered a singel question, so, sorry it's so long.

Economics Activity 1

Poverty in America

The United States is a diverse nation. We are made up of people of

many ages and ethnic backgrounds. As citizens, we share equal rights

and responsibilities. Yet as we strive to embrace our diversity, we must

realize that we are not equal economically. Some of us have a higher

standard of living than others. That is, some Americans live more

comfortably than others.

Some Americans live in poverty. They lack money to buy the food,

shelter, clothing, and health care they need. The government defines as

“poor” any family whose income falls below a certain level, called the

poverty line. The poverty line is based on the yearly income a family

must have to eat adequately. The government determines a poverty-line

income for families of different sizes. For 2001, the poverty line for a

family of four was set at $17,650. Any family of four whose yearly

income fell below this amount was said to be “living in poverty.”

DIRECTIONS: Answer the following questions on a separate sheet of paper.

1. What does it mean for someone to have a “high standard of living”?

2. How does the government determine the poverty line?

3. CRITICAL THINKING ACTIVITY In a magazine or online, find a photo that illustrates poverty in America. Cut it out or print it. Write a one-page story about the scene in the photo. Make yourself the main character in the scene you are describing. What is happening in the photo? What is your life like in this scene? How does your situation make you feel?

Answer 1

1. Standard of living refers to the necessaries, comforts and lux­uries which a person is accustomed to enjoy. In other words, high standard of living of the people means that the quantity and quality of their consumption is high.

A high standard of living would mean high level of wealth, comfort, material goods and necessities available to a certain socioeconomic class or a certain geographic area. The high standard of living includes factors such as high income, high gross domestic product, high national economic growth, high economic and political stability, high political and religious freedom, high environmental quality, climate, and safety. Thus, standard of living is closely related to quality of life.

2.

The official poverty measure has been used to estimate the national poverty rate from 1959 onward. The measure is used to create income thresholds that determine how many people are in poverty. Income thresholds by the official poverty measure are established by tripling the inflation-adjusted cost of a minimum food diet in 1963 and adjusting for family size, composition and the age of the householder.

The Census Bureau also provides data using ratios that compare the income levels of people or families with their poverty threshold:

• A household income above 100% of their poverty threshold is considered “above the poverty level.”
• Income above 100% but below 125% of poverty is considered “near poverty.”
• Households with incomes at or below 100% are considered “in poverty.”
• Household incomes below 50% of their poverty threshold are considered to be in “severe” or “deep poverty.”

The official poverty measure provides guidance for government poverty policy and programs. The official measure thresholds are the basis for the U.S. Department of Health and Human Services poverty guidelines which determine government program eligibility.