This paper aims to read, understand and discuss the recent news on poverty and public policy using microeconomic terminology. The essay writer two news articles selected from U.S News and World Report magazine are “Poverty Rate Hits Lowest Level Since 2001” and “Poverty Rate Drops in Seven Main Metro Areas”, and the third article, Can There Be Income Equality In The U.S?, is selected from online newspaper, The New York Times. These articles were authored by Gaby Galvin, Casey Leins and Katelyn Newman on September 10, 2019, October 14, 2019, and October 26, 2019, respectively. Galvin (2019), Leins (2019) and Newman (2019) provide the trends in the levels and distribution of households’ income and sequences of an alternative measure of poverty. They present a perspective of what has been happening to poverty in the United States since it became a goal of public policy to eradicate poverty. Leins (2019) examines the seriousness of poverty, both the proportion of individuals with income below the poverty line and the poverty gap-the amount by which poor households’ incomes fall below their poverty line.
Whatever measures that Newman (2019) and Leins (2019) use in their articles, they have found that between 2001 and 2018, households incomes have been growing rapidly, resulting in a dramatic poverty fall and a modest income inequality decline. However, Newman (2019) feels that because of increased income inequality, economic growth matters but growth matters less to the trends in the past. Looking at the trend among seven metropolitan areas, Leins (2019) find that prime-age grownups have lesser poverty rate compared to elderly and children; a Hispanic white has lower poverty rate than a black, Hispanic or other minority groups; a man has lower poverty rate than a woman, and a married-couple family has lower poverty rate that a female-headed family. All these demographic inequalities have there for many years.
According to Galvin (2019) and Newman (2019), even as the strength of the economy pulled down the poverty levels to their lowest point since 2001, the number of American population without health insurance increased considerably in 2018 for the first time. Nearly 30.3 million Americans did not have medical coverage in 2018, reversing the trend that started when the Affordable Care Act increased opportunities for some middle-earner individuals and poor to obtain insurance. Galvin (2019) adds that the poverty rates have fallen to their lowest points since 2001 as most of the U.S residents found jobs. As a result, the incomes of middle-class individuals have crept marginally higher. For the first time, although it was almost the same level as it was two decades ago, after changing for inflation, Median U.S incomes have topped $ 66, 000.
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Galvin (2019) and Leins (2019) feel that the best way out of poverty is employment. They claim that the poverty rate for unemployed individuals, which is almost 35 per cent, is 2.5 per cent much higher than the poverty rate for people who work full time throughout the year. People moving from part-time to full-time jobs have largely driven the fall in the U.S poverty rate. More than 2.5 million Americans got full-time works last year alone. “We have witnessed a huge growth in full-time, year-round jobs that would eventually bring up income for working persons”, Said Galvin (2019). But Leins (2019) feels that income inequality remains close to the highest level of the last five decades. According to Leins, a wage gain by a lower-income worker who has found a job and gained from minimum wages increase in many metropolitan areas has been inadequate to close the long-term trends of the wealthy, seeing far incomes gain than middle or a lower class. Since 2001, an income for a family earning around $ 17,000 has fallen while income household brings in around $ 200,000 per year has increased more than 10 per cent. On the other hand, Newman (2019) claims that there are a variety of factors, including economic conditions, that influence the availability of insurance because most insured Americans obtain coverage through employers.
Following the three articles, it is clear that despite the poverty rate declining, economic equality has increased. Over the last three decades, income equality has increased. Since 1970, the average annual incomes have not changed significantly in value for a household at the lowest level of the income distribution. Yet an average annual income has continued to grow for a household at the highest level. The bottom 15 per cent of households averaged $ 17,000 in annual income in 1970 compared with $ 20,000 in 2016, a growth of 12 per cent. For households in the middle of the income distribution, average income increased by forty-five per cent, growing from $57,500 in annual income in 1970 to $ 77, 800 in 2016.
The analyses of these three articles show clearly that poverty has remained an unequally shared experience. While some households continue to experience a much higher level of economic hardship, poverty rates have fallen for some individuals since 1970s and safety net is elevating millions of individuals out of poverty. According to Newman (2019) and Leins (2019), the poverty rate has remained much higher among people and households living in metropolitan areas of concentrated poverty, individuals with the lowest level of education, Hispanic and black population and single-mother households. During the past 30 years, single-mother households increased substantially as a share of all households with children. However, the poverty rate for a single-mother household has reduced by fifteen per cent since 1979. In 2016, 40 per cent of single-mother households were poor, which was two times higher than all households with children (Newman, 2019). Poverty continues to be accumulated more deeply in some metropolitan areas than others in the country. Both the overall poverty rates and accumulation of poverty have continued to be high in the south and have grown in the west. The entire community can face a great challenge when some areas experience a very high level of household poverty.
Galvin and Leins’ articles demonstrate that median households’ incomes for the United States have increased substantially in 2018 for most populated metro areas. However, during the same period for the seven metro areas, the Gini coefficient of income inequality was considerably higher. Between 2017 and 2018, real median households’ incomes in the country grew by 1 per cent to $ 61,900. The figure 1 below shows the median household income in the past 13 years in the U.S: 2005-2018
|Median Household Income in the Past 13 Years in the U.S: 2005-2018
The figure above shows that since 2013, median household income has been growing every year for the country, but the year to year growth from 2017 is not bigger than the previous three years. Earlier, growth ranged from 1.6 per cent to 2.5 per cent per year. This was the second succeeding year that median household income in the United States was greater than in 2005. Comparing to median household income in 2005 for seven metro areas, median household income in 2018 was greater. The pre-recession household incomes in seven metro areas were still higher than the median household income in 2018. There is no statistical difference between the median household income for Maryland and the District of Columbia since the median household income for Maryland was $ 82,342 and the median household income for the District Of Colombia was $ 84,263.
Galvin and Newman’s articles depict that employment is an important aspect of households’ economic welfare. The labor market in the U.S has gone through significant changes for the last twenty years. Educated and high specialized workers have been in demand due to globalization, deindustrialization and technological advancements. The poverty rate remains historically low for individuals, who find full-time, throughout year employment. In recent decades, the poverty rate of non-workers, part-year or part-time workers has risen and is more volatile. Figure 2 below shows a trend in poverty by employment status.
|Percentage of Individuals between 18 and 60 Years Old in Poverty by Employment Status: 1985-2014
For the last three decades, the poverty rates for all employees have been very near to 10 per cent and were at their lowest rates in 2001, when poverty fell to 5.7. The poverty rates for part-year employees reached a low of 12.7 per cent in 2001. Their poverty rates have been continuously twice that of all employees, but in 2014 rose steadily, reaching 15.9 %. Since 1985, the poverty rates for individuals not working have remained 27 % and are more volatile than the poverty rate of working people. The poverty rate of non-working individuals in the country has increased from 27.5% between 1985 and 2000 to 33.7% in 2014. From 1985 to 2014, the poverty rates among full-time employed workers throughout the year have hovered in a narrow range.
This paper has read, understood and discussed the three news articles selected from U.S News and World report magazines on poverty and public policy using microeconomic terminology. The articles provide the trends in the levels and distribution of households’ income and sequences of an alternative measure of poverty. They present a perspective of what has been happening to poverty in the United States since it became a goal of public policy to eradicate poverty. The literature review has compared and contrasted the opinions of the authors of the articles. For example, Newman and Leins discover that between 2001 and 2018, households’ incomes have been growing rapidly, resulting in a dramatic poverty decline and income inequality declining modestly. But Galvin feels that because of increased income inequality, the economic growth matters, but growth matters less to the trends in the past. The analyses of these three articles show clearly that poverty has remained an unequally shared experience.
Galvin, G. (2019, September 10). Poverty Rate Hits Lowest Level since 2001. U.S News and World Report, 2(3), 3. Retrieved from Poverty
Leins, C. (2019, October 14). Poverty Rate Drops in 7 Major U.S. Metro Areas. U.S News and World Report, 2(5), 2. Retrieved from Poverty
Newman, K. (2019, October 26). Can There Be Income Equality In The U.S. The New York Times [New York], p. 4. Retrieved from Income Inequality