poverty in america essay examples

7 Essays About Poverty: Example Essays and Prompts

Essays about poverty give valuable insight into the economic situation that we share globally. Read our guide with poverty essay examples and prompts for your paper.

In the US, the official poverty rate in 2022 was 11.5 percent, with 37.9 million people living below the poverty line. With a global pandemic, cost of living crisis, and climate change on the rise, we’ve seen poverty increase due to various factors. As many of us face adversity daily, we can look to essays about poverty from some of the world’s greatest speakers for inspiration and guidance.

There is nothing but a lack of social vision to prevent us from paying an adequate wage to every American citizen whether he be a hospital worker, laundry worker, maid or day laborer. There is nothing except shortsightedness to prevent us from guaranteeing an annual minimum—and livable—income for every American family. Martin Luther King Jr., Where Do We Go from Here: Chaos or Community?

Writing a poverty essay can be challenging due to the many factors contributing to poverty and the knock-on effects of living below the poverty line . For example, homelessness among low-income individuals stems from many different causes.

It’s important to note that poverty exists beyond the US, with many developing countries living in extreme poverty without access to essentials like clean water and housing. For help with your essays, check out our round-up of the best essay checkers .

Essays About Poverty: Top Examples

1. pensioner poverty: fear of rise over decades as uk under-40s wealth falls, 2. the surprising poverty levels across the u.s., 3. why poverty persists in america, 4. post-pandemic poverty is rising in america’s suburbs.

• 5. The Basic Facts About Children in Poverty
• 6. The State of America’s Children 
• 7. COVID-19: This is how many Americans now live below the poverty line

10 Poverty Essay Topics

1. the causes of poverty, 2. the negative effects of poverty, 3. how countries can reduce poverty rates, 4. the basic necessities and poverty, 5. how disabilities can lead to poverty, 6. how the cycle of poverty unfolds , 7. universal basic income and its relationship to poverty, 8. interview someone who has experience living in poverty, 9. the impact of the criminal justice system on poverty, 10. the different ways to create affordable housing.

There is growing concern about increasing pensioner poverty in the UK in the coming decades. Due to financial challenges like the cost of living crisis, rent increases, and the COVID-19 pandemic, under 40s have seen their finances shrink.

Osborne discusses the housing wealth gap in this article, where many under the 40s currently pay less in a pension due to rent prices. While this means they will have less pension available, they will also retire without owning a home, resulting in less personal wealth than previous generations. Osborne delves into the causes and gaps in wealth between generations in this in-depth essay.

“Those under-40s have already been identified as  facing the biggest hit from rising mortgage rates , and last week a study by the financial advice firm Hargreaves Lansdown found that almost a third of 18- to 34-year-olds had stopped or cut back on their pension contributions in order to save money.” Hilary Osborne,  The Guardian

In this 2023 essay, Jeremy Ney looks at the poverty levels across the US, stating that poverty has had the largest one-year increase in history. According to the most recent census, child poverty has more than doubled from 2021 to 2022.

Ney states that the expiration of government support and inflation has created new financial challenges for US families. With the increased cost of living and essential items like food and housing sharply increasing, more and more families have fallen below the poverty line. Throughout this essay, Ney displays statistics and data showing the wealth changes across states, ethnic groups, and households.

“Poverty in America reflects the inequality that plagues U.S. households. While certain regions have endured this pain much more than others, this new rising trend may spell ongoing challenges for even more communities.” Jeremy Ney,  TIME

In this New York Times article, a Pulitzer Prize-winning sociologist explores why poverty exists in North America.

The American poor have access to cheap, mass-produced goods, as every American does. But that doesn’t mean they can access what matters most. Matthew Desmond,  The New York Times

The U.S. Census Bureau recently released its annual data on poverty, revealing contrasting trends for 2022. While one set of findings indicated that the overall number of Americans living in poverty remained stable compared to the previous two years, another survey highlighted a concerning increase in child poverty. The rate of child poverty in the U.S. doubled from 2021 to 2022, a spike attributed mainly to the cessation of the expanded child tax credit following the pandemic. These varied outcomes underscore the Census Bureau’s multifaceted methods to measure poverty.

“The nation’s suburbs accounted for the majority of increases in the poor population following the onset of the pandemic” Elizabeth Kneebone and Alan Berube,  Brookings

5.  The Basic Facts About Children in Poverty

Nearly 11 million children are living in poverty in America. This essay explores ow the crisis reached this point—and what steps must be taken to solve it.

“In America, nearly 11 million children are poor. That’s 1 in 7 kids, who make up almost one-third of all people living in poverty in this country.” Areeba Haider,  Center for American Progress

6.  The State of America’s Children  

This essay articles how, despite advancements, children continue to be the most impoverished demographic in the U.S., with particular subgroups — such as children of color, those under five, offspring of single mothers, and children residing in the South — facing the most severe poverty levels.

“Growing up in poverty has wide-ranging, sometimes lifelong, effects on children, putting them at a much higher risk of experiencing behavioral, social, emotional, and health challenges. Childhood poverty also plays an instrumental role in impairing a child’s ability and capacity to learn, build skills, and succeed academically.” Children’s Defense Fund

7.  COVID-19: This is how many Americans now live below the poverty line

This essay explores how the economic repercussions of the coronavirus pandemic 2020 led to a surge in U.S. poverty rates, with unemployment figures reaching unprecedented heights. The writer provides data confirming that individuals at the lowest economic strata bore the brunt of these challenges, indicating that the recession might have exacerbated income disparities, further widening the chasm between the affluent and the underprivileged.

“Poverty in the U.S. increased in 2020 as the coronavirus pandemic hammered the economy and unemployment soared. Those at the bottom of the economic ladder were hit hardest, new figures confirm, suggesting that the recession may have widened the gap between the rich and the poor.” Elena Delavega,  World Econmic Forum

If you’re tasked with writing an essay about poverty, consider using the below topics. They offer pointers for outlining and planning an essay about this challenging topic.

One of the most specific poverty essay topics to address involves the causes of poverty. You can craft an essay to examine the most common causes of extreme poverty. Here are a few topics you might want to include:

• Racial discrimination, particularly among African Americans, has been a common cause of poverty throughout American history. Discrimination and racism can make it hard for people to get the education they need, making it nearly impossible to get a job.
• A lack of access to adequate health care can also lead to poverty. When people do not have access to healthcare, they are more likely to get sick. This could make it hard for them to go to work while also leading to major medical bills.
• Inadequate food and water can lead to poverty as well. If people’s basic needs aren’t met, they focus on finding food and water instead of getting an education they can use to find a better job.

These are just a few of the most common causes of poverty you might want to highlight in your essay. These topics could help people see why some people are more likely to become impoverished than others. You might also be interested in these essays about poverty .

Poverty affects everyone, and the impacts of an impoverished lifestyle are very real. Furthermore, the disparities when comparing adult poverty to child poverty are also significant. This opens the doors to multiple possible essay topics. Here are a few points to include:

• When children live in poverty, their development is stunted. For example, they might not be able to get to school on time due to a lack of transportation, making it hard for them to keep up with their peers. Child poverty also leads to malnutrition, which can stunt their development.
• Poverty can impact familial relationships as well. For example, members of the same family could fight for limited resources, making it hard for family members to bond. In addition, malnutrition can stunt the growth of children.
• As a side effect of poverty, people have difficulty finding a safe place to live. This creates a challenging environment for everyone involved, and it is even harder for children to grow and develop.
• When poverty leads to homelessness, it is hard for someone to get a job. They don’t have an address to use for physical communication, which leads to employment concerns.

These are just a few of the many side effects of poverty. Of course, these impacts are felt by people across the board, but it is not unusual for children to feel the effects of poverty that much more. You might also be interested in these essays about unemployment .

Different countries take different approaches to reduce the number of people living in poverty

The issue of poverty is a major human rights concern, and many countries explore poverty reduction strategies to improve people’s quality of life. You might want to examine different strategies that different countries are taking while also suggesting how some countries can do more. A few ways to write this essay include:

• Explore the poverty level in America, comparing it to the poverty level of a European country. Then, explore why different countries take different strategies.
• Compare the minimum wage in one state, such as New York, to the minimum wage in another state, such as Alabama. Why is it higher in one state? What does raising the minimum wage do to the cost of living?
• Highlight a few advocacy groups and nonprofit organizations actively lobbying their governments to do more for low-income families. Then, talk about why some efforts are more successful than others.

Different countries take different approaches to reduce the number of people living in poverty. Poverty within each country is such a broad topic that you could write a different essay on how poverty could be decreased within the country. For more, check out our list of simple essays topics for intermediate writers .

You could also write an essay on the necessities people need to survive. You could take a look at information published by the United Nations , which focuses on getting people out of the cycle of poverty across the globe. The social problem of poverty can be addressed by giving people the necessities they need to survive, particularly in rural areas. Here are some of the areas you might want to include:

• Affordable housing
• Fresh, healthy food and clean water
• Access to an affordable education
• Access to affordable healthcare

Giving everyone these necessities could significantly improve their well-being and get people out of absolute poverty. You might even want to talk about whether these necessities vary depending on where someone is living.

There are a lot of medical and social issues that contribute to poverty, and you could write about how disabilities contribute to poverty. This is one of the most important essay topics because people could be disabled through no fault of their own. Some of the issues you might want to address in this essay include:

• Talk about the road someone faces if they become disabled while serving overseas. What is it like for people to apply for benefits through the Veterans’ Administration?
• Discuss what happens if someone becomes disabled while at work. What is it like for someone to pursue disability benefits if they are hurt doing a blue-collar job instead of a desk job?
• Research and discuss the experiences of disabled people and how their disability impacts their financial situation.

People who are disabled need to have money to survive for many reasons, such as the inability to work, limitations at home, and medical expenses. A lack of money, in this situation, can lead to a dangerous cycle that can make it hard for someone to be financially stable and live a comfortable lifestyle.

Many people talk about the cycle of poverty, yet many aren’t entirely sure what this means or what it entails. A few key points you should address in this essay include:

• When someone is born into poverty, income inequality can make it hard to get an education.
• A lack of education makes it hard for someone to get into a good school, which gives them the foundation they need to compete for a good job. 
• A lack of money can make it hard for someone to afford college, even if they get into a good school.
• Without attending a good college, it can be hard for someone to get a good job. This makes it hard for someone to support themselves or their families. 
• Without a good paycheck, it is nearly impossible for someone to keep their children out of poverty, limiting upward mobility into the middle class.

The problem of poverty is a positive feedback loop. It can be nearly impossible for those who live this every day to escape. Therefore, you might want to explore a few initiatives that could break the cycle of world poverty and explore other measures that could break this feedback loop.

Many business people and politicians have floated the idea of a universal basic income to give people the basic resources they need to survive. While this hasn’t gotten a lot of serious traction, you could write an essay to shed light on this idea. A few points to hit on include:

• What does a universal basic income mean, and how is it distributed?
• Some people are concerned about the impact this would have on taxes. How would this be paid for?
• What is the minimum amount of money someone would need to stay out of poverty? Is it different in different areas?
• What are a few of the biggest reasons major world governments haven’t passed this?

This is one of the best essay examples because it gives you a lot of room to be creative. However, there hasn’t been a concrete structure for implementing this plan, so you might want to afford one.

Another interesting topic you might want to explore is interviewing someone living in poverty or who has been impoverished. While you can talk about statistics all day, they won’t be as powerful as interviewing someone who has lived that life. A few questions you might want to ask during your interview include:

• What was it like growing up?
• How has living in poverty made it hard for you to get a job?
• What do you feel people misunderstand about those who live in poverty?
• When you need to find a meal, do you have a place you go to? Or is it somewhere different every day?
• What do you think is the main contributor to people living in poverty?

Remember that you can also craft different questions depending on your responses. You might want to let the interviewee read the essay when you are done to ensure all the information is accurate and correct.

The criminal justice system and poverty tend to go hand in hand. People with criminal records are more likely to be impoverished for several reasons. You might want to write an essay that hits on some of these points:

• Discuss the discriminatory practices of the criminal justice system both as they relate to socioeconomic status and as they relate to race.
• Explore just how hard it is for someone to get a job if they have a criminal record. Discuss how this might contribute to a life of poverty.
• Dive into how this creates a positive feedback loop. For example, when someone cannot get a job due to a criminal record, they might have to steal to survive, which worsens the issue.
• Review what the criminal justice system might be like for someone with resources when compared to someone who cannot afford to hire expert witnesses or pay for a good attorney.

You might want to include a few examples of disparate sentences for people in different socioeconomic situations to back up your points. 

Affordable housing can make a major difference when someone is trying to escape poverty

Many poverty-related problems could be reduced if people had access to affordable housing. While the cost of housing has increased dramatically in the United States , some initiatives exist to create affordable housing. Here are a few points to include:

• Talk about public programs that offer affordable housing to people from disadvantaged backgrounds.
• Discuss private programs, such as Habitat for Humanity , doing similar things.
• Review the positive impacts that stable housing has on both adults and children.
• Dive into other measures local and federal governments could take to provide more affordable housing for people.

There are a lot of political and social angles to address with this essay, so you might want to consider spreading this out across multiple papers. Affordable housing can make a major difference when trying to escape poverty. If you want to learn more, check out our essay writing tips !

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Why Poverty Persists in America

A Pulitzer Prize-winning sociologist offers a new explanation for an intractable problem.

A mother and son living in a Walmart parking lot in North Dakota in 2012. Credit... Eugene Richards

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By Matthew Desmond

• Published March 9, 2023 Updated April 3, 2023

In the past 50 years, scientists have mapped the entire human genome and eradicated smallpox. Here in the United States, infant-mortality rates and deaths from heart disease have fallen by roughly 70 percent, and the average American has gained almost a decade of life. Climate change was recognized as an existential threat. The internet was invented.

On the problem of poverty, though, there has been no real improvement — just a long stasis. As estimated by the federal government’s poverty line, 12.6 percent of the U.S. population was poor in 1970; two decades later, it was 13.5 percent; in 2010, it was 15.1 percent; and in 2019, it was 10.5 percent. To graph the share of Americans living in poverty over the past half-century amounts to drawing a line that resembles gently rolling hills. The line curves slightly up, then slightly down, then back up again over the years, staying steady through Democratic and Republican administrations, rising in recessions and falling in boom years.

What accounts for this lack of progress? It cannot be chalked up to how the poor are counted: Different measures spit out the same embarrassing result. When the government began reporting the Supplemental Poverty Measure in 2011, designed to overcome many of the flaws of the Official Poverty Measure, including not accounting for regional differences in costs of living and government benefits, the United States officially gained three million more poor people. Possible reductions in poverty from counting aid like food stamps and tax benefits were more than offset by recognizing how low-income people were burdened by rising housing and health care costs.

The American poor have access to cheap, mass-produced goods, as every American does. But that doesn’t mean they can access what matters most.

Any fair assessment of poverty must confront the breathtaking march of material progress. But the fact that standards of living have risen across the board doesn’t mean that poverty itself has fallen. Forty years ago, only the rich could afford cellphones. But cellphones have become more affordable over the past few decades, and now most Americans have one, including many poor people. This has led observers like Ron Haskins and Isabel Sawhill, senior fellows at the Brookings Institution, to assert that “access to certain consumer goods,” like TVs, microwave ovens and cellphones, shows that “the poor are not quite so poor after all.”

No, it doesn’t. You can’t eat a cellphone. A cellphone doesn’t grant you stable housing, affordable medical and dental care or adequate child care. In fact, as things like cellphones have become cheaper, the cost of the most necessary of life’s necessities, like health care and rent, has increased. From 2000 to 2022 in the average American city, the cost of fuel and utilities increased by 115 percent. The American poor, living as they do in the center of global capitalism, have access to cheap, mass-produced goods, as every American does. But that doesn’t mean they can access what matters most. As Michael Harrington put it 60 years ago: “It is much easier in the United States to be decently dressed than it is to be decently housed, fed or doctored.”

Why, then, when it comes to poverty reduction, have we had 50 years of nothing? When I first started looking into this depressing state of affairs, I assumed America’s efforts to reduce poverty had stalled because we stopped trying to solve the problem. I bought into the idea, popular among progressives, that the election of President Ronald Reagan (as well as that of Prime Minister Margaret Thatcher in the United Kingdom) marked the ascendancy of market fundamentalism, or “neoliberalism,” a time when governments cut aid to the poor, lowered taxes and slashed regulations. If American poverty persisted, I thought, it was because we had reduced our spending on the poor. But I was wrong.

Reagan expanded corporate power, deeply cut taxes on the rich and rolled back spending on some antipoverty initiatives, especially in housing. But he was unable to make large-scale, long-term cuts to many of the programs that make up the American welfare state. Throughout Reagan’s eight years as president, antipoverty spending grew, and it continued to grow after he left office. Spending on the nation’s 13 largest means-tested programs — aid reserved for Americans who fall below a certain income level — went from $1,015 a person the year Reagan was elected president to $3,419 a person one year into Donald Trump’s administration, a 237 percent increase.

Most of this increase was due to health care spending, and Medicaid in particular. But even if we exclude Medicaid from the calculation, we find that federal investments in means-tested programs increased by 130 percent from 1980 to 2018, from $630 to $1,448 per person.

“Neoliberalism” is now part of the left’s lexicon, but I looked in vain to find it in the plain print of federal budgets, at least as far as aid to the poor was concerned. There is no evidence that the United States has become stingier over time. The opposite is true.

This makes the country’s stalled progress on poverty even more baffling. Decade after decade, the poverty rate has remained flat even as federal relief has surged.

If we have more than doubled government spending on poverty and achieved so little, one reason is that the American welfare state is a leaky bucket. Take welfare, for example: When it was administered through the Aid to Families With Dependent Children program, almost all of its funds were used to provide single-parent families with cash assistance. But when President Bill Clinton reformed welfare in 1996, replacing the old model with Temporary Assistance for Needy Families (TANF), he transformed the program into a block grant that gives states considerable leeway in deciding how to distribute the money. As a result, states have come up with rather creative ways to spend TANF dollars. Arizona has used welfare money to pay for abstinence-only sex education. Pennsylvania diverted TANF funds to anti-abortion crisis-pregnancy centers. Maine used the money to support a Christian summer camp. Nationwide, for every dollar budgeted for TANF in 2020, poor families directly received just 22 cents.

We’ve approached the poverty question by pointing to poor people themselves, when we should have been focusing on exploitation.

A fair amount of government aid earmarked for the poor never reaches them. But this does not fully solve the puzzle of why poverty has been so stubbornly persistent, because many of the country’s largest social-welfare programs distribute funds directly to people. Roughly 85 percent of the Supplemental Nutrition Assistance Program budget is dedicated to funding food stamps themselves, and almost 93 percent of Medicaid dollars flow directly to beneficiaries.

There are, it would seem, deeper structural forces at play, ones that have to do with the way the American poor are routinely taken advantage of. The primary reason for our stalled progress on poverty reduction has to do with the fact that we have not confronted the unrelenting exploitation of the poor in the labor, housing and financial markets.

As a theory of poverty, “exploitation” elicits a muddled response, causing us to think of course and but, no in the same instant. The word carries a moral charge, but social scientists have a fairly coolheaded way to measure exploitation: When we are underpaid relative to the value of what we produce, we experience labor exploitation; when we are overcharged relative to the value of something we purchase, we experience consumer exploitation. For example, if a family paid $1,000 a month to rent an apartment with a market value of $20,000, that family would experience a higher level of renter exploitation than a family who paid the same amount for an apartment with a market valuation of $100,000. When we don’t own property or can’t access credit, we become dependent on people who do and can, which in turn invites exploitation, because a bad deal for you is a good deal for me.

Our vulnerability to exploitation grows as our liberty shrinks. Because labor laws often fail to protect undocumented workers in practice, more than a third are paid below minimum wage, and nearly 85 percent are not paid overtime. Many of us who are U.S. citizens, or who crossed borders through official checkpoints, would not work for these wages. We don’t have to. If they migrate here as adults, those undocumented workers choose the terms of their arrangement. But just because desperate people accept and even seek out exploitative conditions doesn’t make those conditions any less exploitative. Sometimes exploitation is simply the best bad option.

Consider how many employers now get one over on American workers. The United States offers some of the lowest wages in the industrialized world. A larger share of workers in the United States make “low pay” — earning less than two-thirds of median wages — than in any other country belonging to the Organization for Economic Cooperation and Development. According to the group, nearly 23 percent of American workers labor in low-paying jobs, compared with roughly 17 percent in Britain, 11 percent in Japan and 5 percent in Italy. Poverty wages have swollen the ranks of the American working poor, most of whom are 35 or older.

One popular theory for the loss of good jobs is deindustrialization, which caused the shuttering of factories and the hollowing out of communities that had sprung up around them. Such a passive word, “deindustrialization” — leaving the impression that it just happened somehow, as if the country got deindustrialization the way a forest gets infested by bark beetles. But economic forces framed as inexorable, like deindustrialization and the acceleration of global trade, are often helped along by policy decisions like the 1994 North American Free Trade Agreement, which made it easier for companies to move their factories to Mexico and contributed to the loss of hundreds of thousands of American jobs. The world has changed, but it has changed for other economies as well. Yet Belgium and Canada and many other countries haven’t experienced the kind of wage stagnation and surge in income inequality that the United States has.

Those countries managed to keep their unions. We didn’t. Throughout the 1950s and 1960s, nearly a third of all U.S. workers carried union cards. These were the days of the United Automobile Workers, led by Walter Reuther, once savagely beaten by Ford’s brass-knuckle boys, and of the mighty American Federation of Labor and Congress of Industrial Organizations that together represented around 15 million workers, more than the population of California at the time.

In their heyday, unions put up a fight. In 1970 alone, 2.4 million union members participated in work stoppages, wildcat strikes and tense standoffs with company heads. The labor movement fought for better pay and safer working conditions and supported antipoverty policies. Their efforts paid off for both unionized and nonunionized workers, as companies like Eastman Kodak were compelled to provide generous compensation and benefits to their workers to prevent them from organizing. By one estimate, the wages of nonunionized men without a college degree would be 8 percent higher today if union strength remained what it was in the late 1970s, a time when worker pay climbed, chief-executive compensation was reined in and the country experienced the most economically equitable period in modern history.

It is important to note that Old Labor was often a white man’s refuge. In the 1930s, many unions outwardly discriminated against Black workers or segregated them into Jim Crow local chapters. In the 1960s, unions like the Brotherhood of Railway and Steamship Clerks and the United Brotherhood of Carpenters and Joiners of America enforced segregation within their ranks. Unions harmed themselves through their self-defeating racism and were further weakened by a changing economy. But organized labor was also attacked by political adversaries. As unions flagged, business interests sensed an opportunity. Corporate lobbyists made deep inroads in both political parties, beginning a public-relations campaign that pressured policymakers to roll back worker protections.

A national litmus test arrived in 1981, when 13,000 unionized air traffic controllers left their posts after contract negotiations with the Federal Aviation Administration broke down. When the workers refused to return, Reagan fired all of them. The public’s response was muted, and corporate America learned that it could crush unions with minimal blowback. And so it went, in one industry after another.

Today almost all private-sector employees (94 percent) are without a union, though roughly half of nonunion workers say they would organize if given the chance. They rarely are. Employers have at their disposal an arsenal of tactics designed to prevent collective bargaining, from hiring union-busting firms to telling employees that they could lose their jobs if they vote yes. Those strategies are legal, but companies also make illegal moves to block unions, like disciplining workers for trying to organize or threatening to close facilities. In 2016 and 2017, the National Labor Relations Board charged 42 percent of employers with violating federal law during union campaigns. In nearly a third of cases, this involved illegally firing workers for organizing.

Corporate lobbyists told us that organized labor was a drag on the economy — that once the companies had cleared out all these fusty, lumbering unions, the economy would rev up, raising everyone’s fortunes. But that didn’t come to pass. The negative effects of unions have been wildly overstated, and there is now evidence that unions play a role in increasing company productivity, for example by reducing turnover. The U.S. Bureau of Labor Statistics measures productivity as how efficiently companies turn inputs (like materials and labor) into outputs (like goods and services). Historically, productivity, wages and profits rise and fall in lock step. But the American economy is less productive today than it was in the post-World War II period, when unions were at peak strength. The economies of other rich countries have slowed as well, including those with more highly unionized work forces, but it is clear that diluting labor power in America did not unleash economic growth or deliver prosperity to more people. “We were promised economic dynamism in exchange for inequality,” Eric Posner and Glen Weyl write in their book “Radical Markets.” “We got the inequality, but dynamism is actually declining.”

As workers lost power, their jobs got worse. For several decades after World War II, ordinary workers’ inflation-adjusted wages (known as “real wages”) increased by 2 percent each year. But since 1979, real wages have grown by only 0.3 percent a year. Astonishingly, workers with a high school diploma made 2.7 percent less in 2017 than they would have in 1979, adjusting for inflation. Workers without a diploma made nearly 10 percent less.

Lousy, underpaid work is not an indispensable, if regrettable, byproduct of capitalism, as some business defenders claim today. (This notion would have scandalized capitalism’s earliest defenders. John Stuart Mill, arch advocate of free people and free markets, once said that if widespread scarcity was a hallmark of capitalism, he would become a communist.) But capitalism is inherently about owners trying to give as little, and workers trying to get as much, as possible. With unions largely out of the picture, corporations have chipped away at the conventional midcentury work arrangement, which involved steady employment, opportunities for advancement and raises and decent pay with some benefits.

As the sociologist Gerald Davis has put it: Our grandparents had careers. Our parents had jobs. We complete tasks. Or at least that has been the story of the American working class and working poor.

Poor Americans aren’t just exploited in the labor market. They face consumer exploitation in the housing and financial markets as well.

There is a long history of slum exploitation in America. Money made slums because slums made money. Rent has more than doubled over the past two decades, rising much faster than renters’ incomes. Median rent rose from $483 in 2000 to $1,216 in 2021. Why have rents shot up so fast? Experts tend to offer the same rote answers to this question. There’s not enough housing supply, they say, and too much demand. Landlords must charge more just to earn a decent rate of return. Must they? How do we know?

We need more housing; no one can deny that. But rents have jumped even in cities with plenty of apartments to go around. At the end of 2021, almost 19 percent of rental units in Birmingham, Ala., sat vacant, as did 12 percent of those in Syracuse, N.Y. Yet rent in those areas increased by roughly 14 percent and 8 percent, respectively, over the previous two years. National data also show that rental revenues have far outpaced property owners’ expenses in recent years, especially for multifamily properties in poor neighborhoods. Rising rents are not simply a reflection of rising operating costs. There’s another dynamic at work, one that has to do with the fact that poor people — and particularly poor Black families — don’t have much choice when it comes to where they can live. Because of that, landlords can overcharge them, and they do.

A study I published with Nathan Wilmers found that after accounting for all costs, landlords operating in poor neighborhoods typically take in profits that are double those of landlords operating in affluent communities. If down-market landlords make more, it’s because their regular expenses (especially their mortgages and property-tax bills) are considerably lower than those in upscale neighborhoods. But in many cities with average or below-average housing costs — think Buffalo, not Boston — rents in the poorest neighborhoods are not drastically lower than rents in the middle-class sections of town. From 2015 to 2019, median monthly rent for a two-bedroom apartment in the Indianapolis metropolitan area was $991; it was $816 in neighborhoods with poverty rates above 40 percent, just around 17 percent less. Rents are lower in extremely poor neighborhoods, but not by as much as you would think.

Yet where else can poor families live? They are shut out of homeownership because banks are disinclined to issue small-dollar mortgages, and they are also shut out of public housing, which now has waiting lists that stretch on for years and even decades. Struggling families looking for a safe, affordable place to live in America usually have but one choice: to rent from private landlords and fork over at least half their income to rent and utilities. If millions of poor renters accept this state of affairs, it’s not because they can’t afford better alternatives; it’s because they often aren’t offered any.

You can read injunctions against usury in the Vedic texts of ancient India, in the sutras of Buddhism and in the Torah. Aristotle and Aquinas both rebuked it. Dante sent moneylenders to the seventh circle of hell. None of these efforts did much to stem the practice, but they do reveal that the unprincipled act of trapping the poor in a cycle of debt has existed at least as long as the written word. It might be the oldest form of exploitation after slavery. Many writers have depicted America’s poor as unseen, shadowed and forgotten people: as “other” or “invisible.” But markets have never failed to notice the poor, and this has been particularly true of the market for money itself.

The deregulation of the banking system in the 1980s heightened competition among banks. Many responded by raising fees and requiring customers to carry minimum balances. In 1977, over a third of banks offered accounts with no service charge. By the early 1990s, only 5 percent did. Big banks grew bigger as community banks shuttered, and in 2021, the largest banks in America charged customers almost $11 billion in overdraft fees. Previous research showed that just 9 percent of account holders paid 84 percent of these fees. Who were the unlucky 9 percent? Customers who carried an average balance of less than $350. The poor were made to pay for their poverty.

In 2021, the average fee for overdrawing your account was $33.58. Because banks often issue multiple charges a day, it’s not uncommon to overdraw your account by $20 and end up paying $200 for it. Banks could (and do) deny accounts to people who have a history of overextending their money, but those customers also provide a steady revenue stream for some of the most powerful financial institutions in the world.

Every year: almost $11 billion in overdraft fees, $1.6 billion in check-cashing fees and up to $8.2 billion in payday-loan fees.

According to the F.D.I.C., one in 19 U.S. households had no bank account in 2019, amounting to more than seven million families. Compared with white families, Black and Hispanic families were nearly five times as likely to lack a bank account. Where there is exclusion, there is exploitation. Unbanked Americans have created a market, and thousands of check-cashing outlets now serve that market. Check-cashing stores generally charge from 1 to 10 percent of the total, depending on the type of check. That means that a worker who is paid $10 an hour and takes a $1,000 check to a check-cashing outlet will pay $10 to $100 just to receive the money he has earned, effectively losing one to 10 hours of work. (For many, this is preferable to the less-predictable exploitation by traditional banks, with their automatic overdraft fees. It’s the devil you know.) In 2020, Americans spent $1.6 billion just to cash checks. If the poor had a costless way to access their own money, over a billion dollars would have remained in their pockets during the pandemic-induced recession.

Poverty can mean missed payments, which can ruin your credit. But just as troublesome as bad credit is having no credit score at all, which is the case for 26 million adults in the United States. Another 19 million possess a credit history too thin or outdated to be scored. Having no credit (or bad credit) can prevent you from securing an apartment, buying insurance and even landing a job, as employers are increasingly relying on credit checks during the hiring process. And when the inevitable happens — when you lose hours at work or when the car refuses to start — the payday-loan industry steps in.

For most of American history, regulators prohibited lending institutions from charging exorbitant interest on loans. Because of these limits, banks kept interest rates between 6 and 12 percent and didn’t do much business with the poor, who in a pinch took their valuables to the pawnbroker or the loan shark. But the deregulation of the banking sector in the 1980s ushered the money changers back into the temple by removing strict usury limits. Interest rates soon reached 300 percent, then 500 percent, then 700 percent. Suddenly, some people were very interested in starting businesses that lent to the poor. In recent years, 17 states have brought back strong usury limits, capping interest rates and effectively prohibiting payday lending. But the trade thrives in most places. The annual percentage rate for a two-week $300 loan can reach 460 percent in California, 516 percent in Wisconsin and 664 percent in Texas.

Roughly a third of all payday loans are now issued online, and almost half of borrowers who have taken out online loans have had lenders overdraw their bank accounts. The average borrower stays indebted for five months, paying $520 in fees to borrow $375. Keeping people indebted is, of course, the ideal outcome for the payday lender. It’s how they turn a $15 profit into a $150 one. Payday lenders do not charge high fees because lending to the poor is risky — even after multiple extensions, most borrowers pay up. Lenders extort because they can.

Every year: almost $11 billion in overdraft fees, $1.6 billion in check-cashing fees and up to $8.2 billion in payday-loan fees. That’s more than $55 million in fees collected predominantly from low-income Americans each day — not even counting the annual revenue collected by pawnshops and title loan services and rent-to-own schemes. When James Baldwin remarked in 1961 how “extremely expensive it is to be poor,” he couldn’t have imagined these receipts.

“Predatory inclusion” is what the historian Keeanga-Yamahtta Taylor calls it in her book “Race for Profit,” describing the longstanding American tradition of incorporating marginalized people into housing and financial schemes through bad deals when they are denied good ones. The exclusion of poor people from traditional banking and credit systems has forced them to find alternative ways to cash checks and secure loans, which has led to a normalization of their exploitation. This is all perfectly legal, after all, and subsidized by the nation’s richest commercial banks. The fringe banking sector would not exist without lines of credit extended by the conventional one. Wells Fargo and JPMorgan Chase bankroll payday lenders like Advance America and Cash America. Everybody gets a cut.

Poverty isn’t simply the condition of not having enough money. It’s the condition of not having enough choice and being taken advantage of because of that. When we ignore the role that exploitation plays in trapping people in poverty, we end up designing policy that is weak at best and ineffective at worst. For example, when legislation lifts incomes at the bottom without addressing the housing crisis, those gains are often realized instead by landlords, not wholly by the families the legislation was intended to help. A 2019 study conducted by the Federal Reserve Bank of Philadelphia found that when states raised minimum wages, families initially found it easier to pay rent. But landlords quickly responded to the wage bumps by increasing rents, which diluted the effect of the policy. This happened after the pandemic rescue packages, too: When wages began to rise in 2021 after worker shortages, rents rose as well, and soon people found themselves back where they started or worse.

Antipoverty programs work. Each year, millions of families are spared the indignities and hardships of severe deprivation because of these government investments. But our current antipoverty programs cannot abolish poverty by themselves. The Johnson administration started the War on Poverty and the Great Society in 1964. These initiatives constituted a bundle of domestic programs that included the Food Stamp Act, which made food aid permanent; the Economic Opportunity Act, which created Job Corps and Head Start; and the Social Security Amendments of 1965, which founded Medicare and Medicaid and expanded Social Security benefits. Nearly 200 pieces of legislation were signed into law in President Lyndon B. Johnson’s first five years in office, a breathtaking level of activity. And the result? Ten years after the first of these programs were rolled out in 1964, the share of Americans living in poverty was half what it was in 1960.

But the War on Poverty and the Great Society were started during a time when organized labor was strong, incomes were climbing, rents were modest and the fringe banking industry as we know it today didn’t exist. Today multiple forms of exploitation have turned antipoverty programs into something like dialysis, a treatment designed to make poverty less lethal, not to make it disappear.

This means we don’t just need deeper antipoverty investments. We need different ones, policies that refuse to partner with poverty, policies that threaten its very survival. We need to ensure that aid directed at poor people stays in their pockets, instead of being captured by companies whose low wages are subsidized by government benefits, or by landlords who raise the rents as their tenants’ wages rise, or by banks and payday-loan outlets who issue exorbitant fines and fees. Unless we confront the many forms of exploitation that poor families face, we risk increasing government spending only to experience another 50 years of sclerosis in the fight against poverty.

The best way to address labor exploitation is to empower workers. A renewed contract with American workers should make organizing easy. As things currently stand, unionizing a workplace is incredibly difficult. Under current labor law, workers who want to organize must do so one Amazon warehouse or one Starbucks location at a time. We have little chance of empowering the nation’s warehouse workers and baristas this way. This is why many new labor movements are trying to organize entire sectors. The Fight for $15 campaign, led by the Service Employees International Union, doesn’t focus on a single franchise (a specific McDonald’s store) or even a single company (McDonald’s) but brings together workers from several fast-food chains. It’s a new kind of labor power, and one that could be expanded: If enough workers in a specific economic sector — retail, hotel services, nursing — voted for the measure, the secretary of labor could establish a bargaining panel made up of representatives elected by the workers. The panel could negotiate with companies to secure the best terms for workers across the industry. This is a way to organize all Amazon warehouses and all Starbucks locations in a single go.

Sectoral bargaining, as it’s called, would affect tens of millions of Americans who have never benefited from a union of their own, just as it has improved the lives of workers in Europe and Latin America. The idea has been criticized by members of the business community, like the U.S. Chamber of Commerce, which has raised concerns about the inflexibility and even the constitutionality of sectoral bargaining, as well as by labor advocates, who fear that industrywide policies could nullify gains that existing unions have made or could be achieved only if workers make other sacrifices. Proponents of the idea counter that sectoral bargaining could even the playing field, not only between workers and bosses, but also between companies in the same sector that would no longer be locked into a race to the bottom, with an incentive to shortchange their work force to gain a competitive edge. Instead, the companies would be forced to compete over the quality of the goods and services they offer. Maybe we would finally reap the benefits of all that economic productivity we were promised.

We must also expand the housing options for low-income families. There isn’t a single right way to do this, but there is clearly a wrong way: the way we’re doing it now. One straightforward approach is to strengthen our commitment to the housing programs we already have. Public housing provides affordable homes to millions of Americans, but it’s drastically underfunded relative to the need. When the wealthy township of Cherry Hill, N.J., opened applications for 29 affordable apartments in 2021, 9,309 people applied. The sky-high demand should tell us something, though: that affordable housing is a life changer, and families are desperate for it.

We could also pave the way for more Americans to become homeowners, an initiative that could benefit poor, working-class and middle-class families alike — as well as scores of young people. Banks generally avoid issuing small-dollar mortgages, not because they’re riskier — these mortgages have the same delinquency rates as larger mortgages — but because they’re less profitable. Over the life of a mortgage, interest on $1 million brings in a lot more money than interest on $75,000. This is where the federal government could step in, providing extra financing to build on-ramps to first-time homeownership. In fact, it already does so in rural America through the 502 Direct Loan Program, which has moved more than two million families into their own homes. These loans, fully guaranteed and serviced by the Department of Agriculture, come with low interest rates and, for very poor families, cover the entire cost of the mortgage, nullifying the need for a down payment. Last year, the average 502 Direct Loan was for $222,300 but cost the government only $10,370 per loan, chump change for such a durable intervention. Expanding a program like this into urban communities would provide even more low- and moderate-income families with homes of their own.

We should also ensure fair access to capital. Banks should stop robbing the poor and near-poor of billions of dollars each year, immediately ending exorbitant overdraft fees. As the legal scholar Mehrsa Baradaran has pointed out, when someone overdraws an account, banks could simply freeze the transaction or could clear a check with insufficient funds, providing customers a kind of short-term loan with a low interest rate of, say, 1 percent a day.

States should rein in payday-lending institutions and insist that lenders make it clear to potential borrowers what a loan is ultimately likely to cost them. Just as fast-food restaurants must now publish calorie counts next to their burgers and shakes, payday-loan stores should publish the average overall cost of different loans. When Texas adopted disclosure rules, residents took out considerably fewer bad loans. If Texas can do this, why not California or Wisconsin? Yet to stop financial exploitation, we need to expand, not limit, low-income Americans’ access to credit. Some have suggested that the government get involved by having the U.S. Postal Service or the Federal Reserve issue small-dollar loans. Others have argued that we should revise government regulations to entice commercial banks to pitch in. Whatever our approach, solutions should offer low-income Americans more choice, a way to end their reliance on predatory lending institutions that can get away with robbery because they are the only option available.

In Tommy Orange’s novel, “There There,” a man trying to describe the problem of suicides on Native American reservations says: “Kids are jumping out the windows of burning buildings, falling to their deaths. And we think the problem is that they’re jumping.” The poverty debate has suffered from a similar kind of myopia. For the past half-century, we’ve approached the poverty question by pointing to poor people themselves — posing questions about their work ethic, say, or their welfare benefits — when we should have been focusing on the fire. The question that should serve as a looping incantation, the one we should ask every time we drive past a tent encampment, those tarped American slums smelling of asphalt and bodies, or every time we see someone asleep on the bus, slumped over in work clothes, is simply: Who benefits? Not: Why don’t you find a better job? Or: Why don’t you move? Or: Why don’t you stop taking out payday loans? But: Who is feeding off this?

Those who have amassed the most power and capital bear the most responsibility for America’s vast poverty: political elites who have utterly failed low-income Americans over the past half-century; corporate bosses who have spent and schemed to prioritize profits over families; lobbyists blocking the will of the American people with their self-serving interests; property owners who have exiled the poor from entire cities and fueled the affordable-housing crisis. Acknowledging this is both crucial and deliciously absolving; it directs our attention upward and distracts us from all the ways (many unintentional) that we — we the secure, the insured, the housed, the college-educated, the protected, the lucky — also contribute to the problem.

Corporations benefit from worker exploitation, sure, but so do consumers, who buy the cheap goods and services the working poor produce, and so do those of us directly or indirectly invested in the stock market. Landlords are not the only ones who benefit from housing exploitation; many homeowners do, too, their property values propped up by the collective effort to make housing scarce and expensive. The banking and payday-lending industries profit from the financial exploitation of the poor, but so do those of us with free checking accounts, as those accounts are subsidized by billions of dollars in overdraft fees.

Living our daily lives in ways that express solidarity with the poor could mean we pay more; anti-exploitative investing could dampen our stock portfolios. By acknowledging those costs, we acknowledge our complicity. Unwinding ourselves from our neighbors’ deprivation and refusing to live as enemies of the poor will require us to pay a price. It’s the price of our restored humanity and renewed country.

Matthew Desmond is a professor of sociology at Princeton University and a contributing writer for the magazine. His latest book, “Poverty, by America,” from which this article is adapted, is being published on March 21 by Crown.

An earlier version of this article referred incorrectly to the legal protections for undocumented workers. They are afforded rights under U.S. labor laws, though in practice those laws often fail to protect them.

An earlier version of this article implied an incorrect date for a statistic about overdraft fees. The research was conducted between 2005 and 2012, not in 2021.

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Why even brilliant scholars misunderstand poverty in America

Housing expert Matthew Desmond argues poverty has stagnated in America, but misses something big.

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Matthew Desmond, the acclaimed Princeton sociologist and author of Evicted: Poverty and Profit in the American City , thinks that poverty has barely improved in the United States over the past 50 years — and he has a theory why. Laid out in a long essay for the New York Times Magazine that is adapted from his forthcoming book Poverty, by America , Desmond’s theory implicates “exploitation” in the broadest sense, from a decline in unions and worker power to a proliferation of bank fees and predatory landlord practices, all of which combine to keep the American underclass down.

Desmond, who won a Pulitzer Prize in 2017 for Evicted , is an original and nuanced thinker and I cannot do his 6,000-word argument justice in a short article. But I do know a little bit about how we measure poverty, and I want to back up briefly and interrogate Desmond’s fundamental premise: Has poverty in America persisted ? Is it true that in recent decades, as Desmond writes, “On the problem of poverty ... there has been no real improvement — just a long stasis”? Is it true, as he posits, that the large increase in government spending on antipoverty programs in recent decades (a 130 percent increase from 1980 to 2018, by his numbers) hasn’t made a dent in poverty?

There is widespread disagreement, including among experts, about how to define “poverty.” But contrary to Desmond’s claim that the stagnation “cannot be chalked up to how the poor are counted,” I would insist the answer to whether poverty has fallen or stagnated in America depends entirely on how the poor are counted.

One set of approaches gives a clear answer: Poverty has plummeted dramatically since the 1960s due to a huge increase in government spending on programs that help lower-income people . Another set of approaches suggests that poverty has, as Desmond insists, stagnated (and would have risen absent that government spending ).

Both these approaches have useful, distinct stories to tell us about poverty in America. One point they agree on, though, is that safety net programs like the Supplemental Nutrition Assistance Program (SNAP, sometimes known as food stamps), Medicaid, Social Security, and the earned income tax credit have played an important role in reducing poverty. That is, Desmond’s core premise, that expanding safety net programs haven’t slashed poverty, is wrong. They have. You just need to measure poverty carefully.

How to measure poverty

To come up with a poverty measure, one generally needs two things: a threshold at which a household becomes “poor” and a definition of income. For instance, in 2023, a family of four is defined by the government as officially in poverty in the US if they earn $30,000 or less. That’s the Official Poverty Measure’s threshold, and weirdly it’s the same for 48 states and DC, but higher in Alaska and Hawaii, supposedly due to their higher cost of living.

But what does it mean to earn $30,000 or less? Should we just count cash from a job? What about pensions and retirement accounts? What about Social Security, which is kind of like a pension? What about resources like SNAP that aren’t money but can be spent in some ways like money? What about health insurance?

These aren’t simple questions to answer, and scholars like the late, great Rebecca Blank devoted much of their careers to trying to answer them. But I think it’s fair to say there’s a broad consensus among researchers that income should be defined very broadly. It should at the very least include things like tax refunds and SNAP that are close to cash, and simpler to include than benefits like health insurance.

That’s why there’s also near-unanimous consensus among poverty researchers that the official poverty measure (OPM) in the United States is a disaster . I have written about poverty policy for over a decade and have never heard even one expert argue it is well-designed. I was frankly a little shocked to see Desmond cite it without qualification in his article.

Its biggest flaw is that it uses a restrictive and incoherent definition of income. Some government benefits, like Social Security, Supplemental Security Income (SSI), and Temporary Assistance to Needy Families (TANF), count. But others, like tax credits, SNAP, and health care, don’t count at all. So many programs designed to cut poverty, like SNAP or Medicaid or the earned income tax credit, therefore by definition cannot reduce the official poverty rate because they do not count as income.

The Census Bureau now publishes a supplemental poverty measure (SPM), which uses a much more comprehensive definition of income that includes the social programs the OPM excludes. It also varies thresholds regionally to account for different costs of living, rather than simply breaking off Alaska and Hawaii. That’s a clear improvement.

Some experts, notably economists Bruce D. Meyer and James X. Sullivan , argue that looking for a definition of income is itself a mistake: Poverty is most usefully defined in terms of consumption, the resources people actually buy and consume. They argue this makes conceiving of benefits like Medicaid easier. Getting Medicaid is hard to think of as “income,” but enrollees are definitely “consuming” things like doctor’s visits, prescription drugs, etc, that they would struggle to obtain without those benefits.

But overall, disputes among poverty experts about how to define income or consumption or “resources” tend, in my experience, to be muted compared to disputes over where to draw the thresholds: where to set the poverty line and how to adjust it over time.

The simplest way to approach this is to do what the official poverty measure does: Take a set amount of money and adjust it for inflation over time. Specifically, the poverty rate was devised in 1963 by Mollie Orshansky , an economist at the Social Security Administration, based on the US Department of Agriculture’s 1961 estimate, which itself was based on 1955 data, of how much money a family of four would need for food, if they were really pinching pennies. Orshansky tripled this estimate, since families of three more typically spent a third of their income on food at the time. (Americans now spend only about 10 percent of income on food, though the subset of families that Orshansky was looking at may spend more.)

That was the poverty line, and it has not changed since, with the exception of annual adjustments according to the Consumer Price Index.

That is, of course, an incredibly arbitrary threshold to draw, and it’s almost a cliché at this point to note how dumb it is. There’s an episode of The West Wing with a subplot about how old and dumb and outdated the poverty line is, and that episode is itself now over 21 years old.

But experts are split on what a better line to draw would be.

Absolute versus relative poverty

The official poverty measure is what’s sometimes known as an “absolute” poverty measure. Measures like this generally only adjust their thresholds for inflation. Many are based on less arbitrary numbers than “what people spent on food in 1955,” and many use different measurements of inflation, since a lot of economists think the Consumer Price Index overstates price increases compared to the Personal Consumption Expenditures (PCE) or chained CPI measures. But they fundamentally have a lot in common with the OPM’s approach: They set a dollar threshold for who is and isn’t poor and stick to it.

Absolute poverty measures are crystal clear about what has happened to poverty since the 1960s: It plummeted. The below chart shows three different absolute measures, all of which use expansive income definitions, unlike the official rate. All three have fallen dramatically.

(Many thanks to economist Kevin Corinth for passing along this series from his working paper with Richard Burkhauser, James Elwell, and Jeff Larrimore.)

The primary case for absolute measures like these is that they’re easy to interpret. Because the thresholds only change due to inflation, changes in the poverty rate only happen because people near the bottom get richer or poorer. If poverty falls, it’s because some low-income people gained more money or resources. If it increases, it’s because some low-income people lost out. Insofar as those kinds of material changes at the bottom are the main thing one cares about, absolute measures can be helpful. As a group of Columbia researchers argued in 2016 , absolute measures are “more useful for establishing how families’ resources have changed against a fixed benchmark.”

Applied to the US, the takeaway is that many fewer people are living on a very small amount of money than was the case in the 1960s.

But many poverty scholars prefer to use what are called “relative” measures. Such measures set the threshold as a percentage of the country in question’s median income (usually 50 or 60 percent). Most rich countries other than the US define poverty in this way. The European Union, for instance, uses what it calls an “at risk of poverty” rate , defined as the share of residents in a country living on less than 60 percent of the median disposable income. The United Kingdom uses a “households below average income” (HBAI) statistic, with the main threshold set to 60 percent of median income.

The case for relative measures is that poverty is socially defined, and “being in poverty” is usually thought of as people not being able to exist with the level of comfort that is normal in the society in which they live. A common definition, from the British scholar Peter Townsend , posits that poverty is “the absence or inadequacy of those diets, amenities, standards, services and activities which are common or customary in society.” Commonness or customariness are relative attributes, not absolute ones. Some, like sociologist David Brady, have also argued for relative measures on the grounds that they correlate better with self-reported mental and physical health and well-being .

Looked at in relative terms, poverty hasn’t fallen in the US in recent decades. It’s stagnated:

Advocates of absolute measures counter that relative poverty measures inequality rather than actual deprivation. Bruce Meyer, for instance, cites the experience of Ireland in the 2000s , which experienced “real growth in incomes throughout the distribution including the bottom. However, because the middle grew a bit faster than the bottom, a relative poverty measure shows an increase in poverty. Thus, we have a situation of nearly everyone being better off, but poverty nonetheless rising.” The reverse can happen in recessions, where if median incomes fall faster than incomes at the bottom, poverty can fall, even though everyone’s worse off.

Some measures, sometimes called “quasi-relative” or “semi-relative,” split the difference between the two approaches. They don’t merely vary with inflation, but they’re not a simple percentage of average incomes, either. The US supplemental poverty measure is a good example: It’s based on the 33rd percentile of spending on “food, clothing, shelter, and utilities” (FCSU). That is, researchers rank households by the amount they spend on those categories, find the point such that a third of households are below it and two-thirds are above, and use that as the basis for the SPM line. Because spending on these goods varies year to year, the thresholds change year to year, and not just based on inflation, but the change tends to be minimal compared to the changes in pure relative measures.

Government taxing and spending has become more important in fighting poverty

So … who’s right? The boring but correct answer is that these measures capture different things and each tells us something interesting. The fall in absolute poverty tells us that fewer people are living on very low cash incomes than were in, say, 1980. One estimate suggests that the fall in absolute poverty since 1967 means that 55 million fewer people lived in poverty in 2020 than would have if absolute poverty had stagnated.

The stagnation in relative incomes tells us that income growth at the bottom isn’t faster than growth at the middle and that there’s still a substantial share of America living on substantially below-average incomes — with 23.1 percent of Americans living in poverty under the definition used by the EU and UK (compared to 15.5 percent in the UK and 16.5 percent in the EU).

I do, however, want to highlight a point where absolute and relative poverty measures align: Government spending on social programs plays an important role in reducing poverty, and such spending does more to fight poverty now than it did in the recent past.

One highly cited absolute poverty measure is the “anchored” supplemental poverty measure , produced by Columbia researchers Christopher Wimer, Liana Fox, Irwin Garfinkel, Neeraj Kaushal, and Jane Waldfogel. This measure simply uses the Supplemental Poverty Measure thresholds from 2012 and extends them back to 1967.

This measure shows a substantial decline in poverty — but more importantly, it shows that government transfer programs are the only reason poverty has substantially declined. Before taxes and transfers, the poverty rate by this metric was 26.4 percent in 1967 and 22.5 percent in 2019. In the pandemic year of 2020, it shot up to 24.9 percent, barely different from 53 years previous. But after taxes and transfers, poverty fell from 25 percent in 1967 to 11.2 percent in 2019 — and to 8.4 percent amid the flood of stimulus money in 2020. The big story here is that government programs are doing much more than they did in the 1960s or 1980s to slash poverty.

One sees the same pattern in relative poverty. A 2019 paper by researchers Koen Caminada, Jinxian Wang, Kees Goudswaard, and Chen Wang for LIS, an international research center for income and poverty issues, estimates that in 1985, taxes and transfers in the US reduced relative poverty by 6.2 points. In 2013, the reduction was 9.7 points. Without government intervention, relative poverty would have increased from 1985 to 2013; instead, it merely stagnated.

Desmond, in his essay, spends some time marveling that “federal investments in means-tested programs increased by 130 percent from 1980 to 2018,” a fact he finds hard to square with the official poverty rate remaining flat. Surely that spending should have reduced poverty!

The answer here is simple: It did reduce poverty. The escalation of government investment made a difference, no matter what reputable poverty data you look at, whether absolute or relative. The only data series where it doesn’t make a difference is the official poverty measure, which literally does not consider most of this spending and acts like it does not exist.

The points Desmond makes about forces of exploitation in the markets poor people interact with — from payday lenders to bosses who can take advantage of their monopoly power and weakened unions to set low wages to the landlords he profiled in his breakout book — are well-taken. These could very well help explain why poverty would have stagnated or risen without government intervention, and addressing them might prove effective at fighting poverty. But there’s no need to couple this argument with claims that government spending has done nothing to reduce poverty. It has done a tremendous amount.

Much of the confusion in Desmond’s piece is not his fault, exactly. It’s the fault of the US government and its official poverty measure. Congress and the Department of Health and Human Services urgently need to abolish the OPM. It’s a bad number that tells a misleading story about poverty in America, and acting to replace it would do a lot of good.

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Essay Samples on Poverty in America

Cause and effect of poverty on society.

Poverty and its effects and harms communities and entire countries, Children living in poverty experience a wide variety of risk factors, ranging from health concerns to increased difficulties at school, about 15 million children in the United States live in low-income families. Children who directly...

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Best topics on Poverty in America

1. Cause and Effect Of Poverty On Society

2. The Political Pressure And Other Reasons That Caused The Great Depression

3. The Hardship And What Caused The Great Depression

4. Different Ideas Of How The Government Can Help The Homeless

5.  the Rising And Worsening Issue Of Child Hunger In The States 

6. The Wrongness Of The Statement Poverty Is A State Of Mind

7. The Working Poor: Helping The Poor And Needy

8. Global Hunger And Its Prevalence In America

9. Physician Assistant In Health Care: Working With Underserved Populations

10. United States Social Policies And Their Impact On The Working Poor Of America

11. Poverty Is A State Of Mind: Fighting For Rights Of Homeless Women

12. Reasons Why We Should We Help The Homeless On Campus

13. The Harlem Renaissance: Poverty And Desperation

14. The Issue Of Rich Still Out Weighing The Poor

15. The Necessities Accessible To Rich And Not Those Who Are Poor

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• Gender Inequality
• Globalization
• Gender Equality
• Islamophobia
• Overpopulation

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Poverty in America

Introduction.

For many years, the United States has been experiencing high rates of poverty due to various social and economic processes. The living standard in the United States has been rising for the last 45-years, with the GDP per capita doubling since the 1950s. Despite the country having wealthy people, the living standards for millions of people seem stagnated. Income inequality keeps rising—meaning that many people have been facing economic barriers, without real representation in the economic domains. Many Americans have been left out in the economic decision-making, especially when it comes to issues that determine the degree of earning in the same society. The US is among the richest country across the globe, but the level of income inequality that has existed in the country for the past three decades continues to intensify the rates of poverty. According to the 2019 Census Bureau reports, the poverty rate in the United States stood at 15%, meaning that over 50.2 million people were around the poverty belt (Hoynes et. 49). The rate of poverty, especially in the West Coast states continues to worsen every day, with federal and state governments failing in economic and social aspects in an attempt to reduce the rate of poverty. Some wealthy families have invested heavily in the United States to help lift the living standards of the people through offering employment opportunities, but the government has failed to combat the rising employment demands in the country. In America, social and economic processes such as large family structure and unemployment are in fact the main contributors to the high rate of poverty, but not personal shortcomings and attributes.

Social Processes Causing Poverty in the United States

Family structure.

The family structure has been the main cause of poverty not only in the United States but also across the entire world. There have been, however, significant changes in the family nuclear and the living arrangement for the people for the past few decades. For instance, since the year 1967 to 2003, the number of people living in families headed by females has doubled. However, this means that the number of single families has continued to increase at a high rate. As it stands now, the rate of families headed by single mothers is four times as it was three or four decades ago. The increasing changes in the family arrangement and the overall structure of the families have resulted in a high rate of poverty. Brady argues that the high rate of poverty in many states in the US has intensified due to rising demands and the single-parent family approach (162). Brady further states that extended and large families evident in the United States, especially for the immigrants and indigenous people has further increased the poverty rate high (159). For example, the statistics show that the poverty rate has been high for families with a large number of families.

Families headed by females have increasingly entered into an intense state of poverty due to declined opportunities for income generation as most women have less working time, experience, and declined commensurate income earning potential. Many families headed by single mothers in the United States face problems such as uneducated children due to a lack of enough financial resources to educate their children. In fact, high school fees have pushed many families with a large number of children towards the poverty line. The US government, together with other agencies needed to initiate enough policies that will enable single mothers to overcome income inequalities. The family structure has not been friendly for many families in the United States (Hoynes et. 53). However, it must be recalled that the poverty rate is not highly witnessed for single-mother families, but also for single men with children. The data indicates that the percentage of single mothers and single fathers with children and who are extremely struggling with poverty stands at 6.2% and 0.8% families.

While the United States government has initiated different measures to decline the rate of poverty, poverty has still persisted across different groups—with the largest and highest poverty rate for single families, and the rate of poverty has been evident for married families. The high rate of poverty has intensely been reflected by the families shifting towards single-headed families (Hoynes et. 56). Single-headed families mean that the income is only generated by only parents —meaning that a large portion of the income earned by single-parent goes to food, school, and clothing. In fact, it translates that many single parents have not yet attained proper balance in the labor force. Even the limited capital generated by such families does not primarily support all the needs of the people.

In the United States, the government has not yet attained a greater milestone in achieving education balance. In fact, education has been contributing factor towards the high rate of poverty evident in many parts of the states. For the last three decades, minority communities such as Latino and African Americans have not yet attained equal rights and opportunities towards education. since the era of great slavery and segregation, racial discrimination among the minority communities has further extended to various generations, resulting in a high number of uneducated minority people across America. Nolan et al argue that approximately 50% of the black people in the US aged between 80 and 50 years are living in poverty line due to limited access to education (132). majority of black Americans have attained low-level education, while others are yet to attain any level of education due to increased racial discrimination in district schools and limited financial resources to support education. low education attainment has forced many minority people to depend on unskilled employment opportunities to effectively sustain their living and that of their family members (Nolan et al. 124). Actually, unskilled people normally receive small wages that cannot meet their social welfare, food, and education. Further, the uneducated population has limited opportunities for employment—meaning that such families with uneducated children or parents have experienced a high rate of poverty.

Cultural Differences

Many scholars of the structural and cultural schools of thought have argued that cultural differences in the United States have fostered economic barriers for various groups, especially to women and children. The level of ethnicity among many Americans has formed grounds for gender identity and racial differences, which has acted as a block for women and children towards attaining the working class. Vacaflores claims that the rise of poverty among unemployed youths and women has greatly been contributed by the patriarchal social formation and structures that have resisted the inclusion of women into the working proportion (256). The workplace for many sectors in the United States has been heavily dominated by men.

The social welfare program initiated by the US government does not fully cater to the needs of all women and children. The social program has been selected, especially for the minority communities and immigrants. However, this can be heavily linked to gender discrimination has led to high-income inequality among the genders, and has further resulted in increased poverty rates. For this reason, women need to be well presented and included in social welfare to ensure that those in vulnerable neighborhoods receive social necessities such as proper education (Vacaflores 261). The policies should be initiated to ensure no further discrimination in the workplace, and that there is equitable sharing of resources regardless of gender or race.

• Immigration

The number of immigrants in the United States has been rising for the last three decades. Most of the immigrants coming into the US are less educated, while others have not attained any level of education. Most immigrants are less educated and do not speak English. However, this has made many immigrants miss many opportunities since they cannot secure jobs in English based workplaces. This means that many immigrants have to study basic skills such as reading and speaking English in order to secure employment opportunities in various sectors. Homan et al conducted a research study and found that many immigrants have fewer skills than native-born Americans, and cannot secure stable job opportunities in a competitive labor market (1032). For example, in 2000, approximately 17.4% of the immigrants living in the United States were living below the poverty line (Homan et al. 1035). The influx of immigrants in the United States for the last few years has been characterized by less education and is responsible for the high rate of poverty in America. In fact, for those immigrants who choose to acquire education in the United States, it takes many years before entering into the labor markets. This means that they depend on the social welfare programs to support their education and feed their families. This explains why a high rate of poverty is evident in west coast states, where immigrants dominants.

The United States is typically divided into two groups—those who were born in the country and are headed by native parents, and those who come into the United States, either to seek a green card or for their studies. The United States is the leading developed country with a high population of immigrants due to their foreign policies, and good relationship with developing countries. Most immigrants do not have the proper background in the United States and many of them end up being jobless. Research shows that the poverty rate in the United States for the native people has greatly fallen by 50% compared to approximately 12.4% of the immigrants (Lawrence et al. 107). This means that factors such as education for the immigrants have been contributing factors towards the declining level of education. Many immigrants do not have stable jobs, while others are living in poor conditions due to a lack of strong financial support.

Many immigrants have been high discriminated against not only in the education sector but also in the workplace. Many native Americans with business refer to immigrants as Aliens—meaning people with little skills and experience. Many workplaces have been dominated by Native Americans, leaving immigrants with no job employment. To some extent, the United States government has failed to address the issues of immigrants in relation to education and employment. The US government has not yet formulated strong education and employment programs to support a large number of immigrants without jobs. Many immigrants living without basic education are living on the poverty line. Lawrence et al argues that most of the immigrants in the United States, experiencing extreme poverty have no education (118). Lawrence et al further explains that there is a number of barriers to education facing immigrants in the United States, including lack of strong financial support for basic education necessities such as books, increased bias against female gender, and high level of discrimination in the education sector (121). Lack of education for the immigrants means that the majority miss great equalizer for poverty. This is because education is the gateway to well-paying jobs in the United States. The United States government needs to collaborate with UNESCO and other international actors to improve the education status for many immigrants arriving in the US. Notably, poverty can extremely threaten the educational attainment of many immigrants, but attaining good education can help in ending the state of poverty.

Economic Processes Causing Poverty in the United States

Unemployment.

The high rate of unemployment evident in the United States has promulgated the rate of poverty for many people. Lawrence et al argues that 12% of the unemployment in the United States has contributed to high poverty, especially for the people without supportive families (106). Before, examining how unemployment has led to a high rate of employment, it is very important to outline some factors that have resulted in a high rate of unemployment in the USA. First, the economic recession such as the COVID-19 pandemic has greatly contributed to the high rate of unemployment. Many sectors such as Education, healthcare, and security have tremendously failed to meet the evident rising demand for employment for youths in America. Just as evident now across the world, the spreading of the COVID-19 pandemic has appeared like the economic recession that has intensified the rate of unemployment in the United States. Millions of people have lost their jobs, while thousands of business people have closed their jobs and others have scaled down the number of workers to minimize business losses (Lawrence et al. 112) Poverty has intensified for the families who have lost jobs due to economic recession. In fact, the United States government has done less to help those families overcome social and economic uncertainties, but still, the rate of poverty has continued to rise.

Economic Recession

Across the world, the economic recession is contributing factor towards income inequalities, unemployment, and high living standards. The economic process characterized by a high level of education has been contributing factor towards rising trends and increased poverty in America. The economic growth has been declining due to a number of factors such as unemployment and a high inflation rate. With increased economic growth, many companies have found it difficult to support the rising demand for jobs and high wages. However, it means that declined economy has resulted in an absolute decrease in salaries and eventually led to pushing many people towards the poverty line (Nolan et al. 126). In fact, the standard of living has been rising, and with the government failing to balance the economic status, many people facing salary cuts found themselves struggling with rising living standards. The high rate of unemployment has significantly affected women than men. The economic vulnerability has failed to support the rising number of women seeking employment opportunities (Lawrence et al. 116). This translates that many families have been depending on men to provide for food, shelter, education, and other needs. Overall, it means that a large portion of salaries goes to cater to family needs, instead of helping open new opportunities for the family members.

Climate Change

Climate change continues to hurt the world in different ways and the United States has not been an exception. Climate change creates hunger through drought and flooding, and its effect has been contributing factor toward poverty cycling in the United States. Although the United States has not been greatly affected by climate change, those countries affected by global warming such as developing countries and which American depends on them for the supply of raw materials continues to pose a serious threat to the future of the US in terms of economic growth (Hoynes et. 59). Flooding and drought cause starvation, meaning that the United States keeps spending huge sums of money to cater for food and other basic needs through social welfare programs.

Government Taxation and Transfer Programs

The US tax and other social transfer programs represent a critical source of income for many poor people in the United States. Among the poor, the main source of the transfer programs that have been provided by the US government through Temporary Assistance, especially to the needy families come from low and middle-income families. Since the US government provides cash benefits directly to poor people, they have a direct effect on poverty and income. The impact comes through changing people’s behavior. The transfer programs have made many poor people develop the tendency of relying on the government for support. Many immigrants depending on cash transfer programs do not focus on securing stable employment that can uplift their living standards. Hoynes et argues that the structure of the US government, especially towards supporting the vulnerable people does not directly help uplift the standards of people since it only focuses on offering basic support that cannot assist in providing all the needs for the people (63).

In summary, social and economic processes such as large family structures and unemployment are now the leading causes of poverty in the US. United States government must address poverty as an emergency social issue by ensuring economic and social balance. Many Americans have been left out in the economic decision-making, especially when it comes to issues that determine the degree of earning in the same society. The US is among the richest country across the globe, but the level of income inequality that has existed in the country for the past three decades continues to intensify the rates of poverty. Many families headed by single mothers in the United States face problems such as uneducated children due to a lack of enough financial resources to educate their children. In the United States, the government has not yet attained a greater milestone in achieving education balance. Education has been contributing factor towards the high rate of poverty evident in many parts of the states. Poverty has intensified for families who have lost jobs due to economic recession. The United States government has done less to help those families overcome social and economic uncertainties, but still, the rate of poverty has continued to rise. The transfer programs have made many poor people develop the tendency of relying on the government for support.

Works Cited

Bobo, Lawrence, Et Al. “Public Opinion Before and After a Spring of Discontent 1.”  The Los Angeles Riots . Routledge, 2019. 103-133.

Brady, David. “Theories of the Causes of Poverty.”  Annual Review of Sociology  45 (2019): 155- 175.

Homan, Patricia, Lauren Valentino, And Emi Weed. “Being and Becoming Poor: How Cultural Schemas Shape Beliefs About Poverty.”  Social Forces  95.3 (2017): 1023-1048.

Hoynes, Hilary W., Marianne E. Page, And Ann Huff Stevens. “Poverty in America: Trends and Explanations.”  Journal of Economic Perspectives  20.1 (2006): 47-68.

Nolan, Laura B., Jane Waldfogel, And Christopher Wimer. “Long-Term Trends in Rural and Urban Poverty: New Insights Using a Historical Supplemental Poverty Measure.”  The ANNALS of The American Academy of Political and Social Science  672.1 (2017): 123- 142.

Vacaflores, Diego E. “Are Remittances Helping Lower Poverty and Inequality Levels in Latin America?”  The Quarterly Review of Economics and Finance  68 (2018): 254-265.

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Home / Essay Samples / Social Issues / Poverty in America / Uncovering Poverty in America: A Comprehensive Analysis

Uncovering Poverty in America: A Comprehensive Analysis

• Category: Social Issues
• Topic: Poverty in America

Pages: 5 (2172 words)

• Downloads: -->

Introduction 

Poverty in the world’s wealthiest country, what constitutes poverty, racial inequality and its link to poverty, life chances, class and income segregation, gentrification.

• Alston, Jon P. and Melvin J. Knapp. 1974. “Intergenerational Mobility Among Black Americans.” Journal of Black Studies 4(3):285–302.
• Anon. n.d. “Federal Poverty Level (FPL) - HealthCare.gov Glossary.” HealthCare.gov. Retrieved April 11, 2019 (https://www.healthcare.gov/glossary/federal-poverty-level-fpl/).
• Carter, Prudence L. and Kevin Grant Welner. 2013. Closing the Opportunity Gap: What America Must Do to Give Every Child an Even Chance. New York: Oxford University Press.
• Ellwood, David T. and Lawrence H. Summers. 1985. Poverty in America: Is Welfare the Answer or the Problem? Cambridge : NBER.
• Federal Reserve Bank of Boston. 2012. “Geographic Segregation: The Role of Income Inequality.” Federal Reserve Bank of Boston. Retrieved April 12, 2019
• Gilbert, Dennis L. 2015. The American Class Structure in an Age of Growing Inequality. Los Angeles, CA: SAGE Publications.
• Lees, Loretta, Tom Slater, and Elvin Wyly. 2013. Gentrification. Florence: Taylor and Francis.
• Watson, Tara. 2009. “Inequality and the Measurement of Residential Segregation by Income In American Neighborhoods.”

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