Independence Day brings various patriotic and celebratory associations such as fireworks, picnics, soaring eagles, the pursuit of happiness, and the Statute of Liberty.
A message symbolized by Lady Liberty suggests opportunities for success still exist in America. This sentiment is captured in the poem “The New Colossus,” which includes the line, “Give me your tired, your poor, your huddled masses yearning to breathe free…”
Our American shores have long been viewed as the land of opportunity, and pursuing the American Dream an important part of our heritage.
But for many in our country, poverty stands in the way of financial independence and a comfortable lifestyle.
Research findings this week define poverty, discuss circumstances and conditions that create it, identify geographical areas and demographics where poverty has become particularly problematic, and provide possible solutions to help alleviate poverty’s burdens.
Read on and consider your environment. How might your credit union address poverty and help consumers celebrate financial security?
‘I believe that, as long as there is plenty, poverty is evil.’–Robert Kennedy
“What are Poverty Thresholds and Poverty Guidelines?” There are two variations on the federal poverty measure: poverty thresholds, which are detailed and have statistical use; and poverty guidelines, a simplified version of thresholds, with administrative use.
Note for a family of four in the U.S., the 2014 poverty guideline is $23,850.
With an established measure of poverty, consider “Statistics of Poverty in America,” according to Brookings. Here you’ll find various poverty facts of note, among them:
- 15% of Americans lived in poverty in 2012;
- 47% of children of single-mother families lived below the federal poverty level in in 2012; and
- $2,254 was the average amount of the Earned Income Tax Credit. It kept 6.5 million Americans—including 3.3 million kids—from poverty.
A further look at “Who’s Poor in America?” is provided by the Pew Research Center in its examination of the 50 years since President Lyndon Johnson’s proclaimed War on Poverty.
It is explained here that the Census Bureau’s official poverty rate “has fallen only modestly, from 19% in 1964 to 15% in 2012,” while some say progress has been more substantial with other measures.
However, “What’s inarguable… is that the demographics of America’s poor have shifted over the decades.”
Some of these demographic shifts:
- “Most poor Americans are in their prime working years,” 57% in 2012, and 41.7% in 1959;
- Far fewer seniors are poor today (9.1%) than in 1966 (28.5%), due in large part to Social Security.
- Family structure has changed for the poor. In 1973, 51.4% of poor families were headed by a married couple, while in 2012 this number had fallen to 38.9%. Women headed 45.4% of poor households in 2012.
- Poverty among blacks has dropped sharply but has risen among Hispanics.
Another shift is noted by the Census Bureau with “Changes in Areas with Concentrated Poverty: 2000 to 2010.” Every state has areas with above average poverty rates, and a designated “poverty area” reflects a poverty rate in excess of 20%.
The percentage of people living in such poverty areas between 1990 and 2000 fell from 20% percent to 18.1%. However, between 2000 and 2010, the percentage of residents in poverty areas increased from 18.1% to 25.7%.
“While the overall population grew by 10% over the decade, the number of people living in poverty areas grew by about 56%.”
This detailed report presents the geographic distribution of poverty. Among those living in poverty areas during 2010, “51.1% lived in central cities of metropolitan areas, 28.6% in suburban areas, and 20.4% lived outside of metropolitan areas.”
Meanwhile, rural America isn’t faring as well, says “Poverty and Deep Poverty Increasing in Rural America,” from the U.S. Department of Agriculture.
Here, “deep poverty” is defined as “having cash income below half of one’s poverty threshold. In 2012, that meant a subsistence level of less than $1,000 a month for a family of four.”
In 2012, 6.6% of the U.S. population lived in deep poverty.
“Deep poverty among children is more acute in rural areas (12.2%) than in urban areas (9.2%)… Children have experienced higher rates of growth in deep poverty over the last decade, particularly in rural areas.”
These distressing poverty statistics do not take into account those “Living in Near Poverty in the United States” who likely also struggle to make ends meet. “In 2012, 14.7 million people in the U.S. had family incomes between 100% and 125% of their poverty threshold.”
‘Anticipate charity by preventing poverty.’–Maimonides, medieval Spanish philosopher
Research findings include two resources presenting possible solutions to alleviate or prevent poverty.
First, see “Disrupting Poverty: Coming Together to Build Financial Security for Individuals and Communities,” a report by The Paul G. Allen Family Foundation.
This group in the Pacific Northwest identifies “six projects that are taking bold approaches” to disrupt poverty to “help practitioners and funders as they look for opportunities to strengthen financial security and foster wealth-building initiatives.”
Some of their projects:
- Microenterprise development;
- Innovative housing services; and
- Neighborhood revitalization programs.
Partnerships and collaborations are identified as important components to success in such endeavors that create financial security.
Second, “Increasing the minimum wage would have two principal effects on low-wage workers,” according to the Congressional Budget Office in “The Effects of a Minimum-Wage Increase on Employment and Family Income.” Namely, higher pay would benefit families but would probably eliminate some jobs.
This detailed report theorizes that a minimum wage increase to $10.10 per hour would come with 900,000 fewer people existing below the poverty threshold. A rate of $9 per hour would result in 300,000 fewer.
How can your credit union help those who struggle in poverty to celebrate security and financial independence instead?
In the words of entrepreneur Naveen Jain, “Helping people boost themselves out of poverty is the best way to make a lasting positive difference in a person’s life.”