Chapter 15
Poverty
Lecture PowerPoint
© W. W. Norton & Company, 2008
Introduction
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Poverty can be defined as a condition of
deprivation due to economic circumstances that is
severe enough that the individual in this condition
cannot live with dignity in his or her society.
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Introduction
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The administration of Lyndon Johnson established
a wide range of anti-poverty programs in the 1960s
 For example, programs for education, job
training and placement, housing—as a part of its
“War on Poverty.”
 Within just a few years, many of these
programs, and the whole ideology behind them,
were coming under attack.
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Introduction
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At the core of the debate about poverty in America
is the question of whether poverty is the cause of
social ills such as crime, poor educational
outcomes, divorce, etc., or their result.
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Introduction
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Perverse incentives are reward structures that lead
to suboptimal outcomes by stimulating
counterproductive behavior.
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Unintended consequences are results of a policy
that were not fully anticipated at the time the policy
was implemented, particularly outcomes that are
counter to the intentions of the policymakers.
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The Culture of Poverty
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The Culture of Poverty Theory
 Argues that poor people adopt certain practices, which
differ from those of middle-class, “mainstream” society,
in order to adapt and survive in difficult economic
circumstances and that sometimes they continue to rely
on these practices even after they are no longer useful
and are potentially detrimental
 Part of a backlash against the policies implemented by
President Johnson, and it was used to bolster the
arguments of welfare critics
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The Culture of Poverty
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While it may be true that reliance on welfare
generates a sense of helplessness and dependency
in some people, there are also structural reasons
why it can be difficult to transition from welfare to
work.
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The Culture of Poverty
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In the 1980s journalist Ken Auletta introduced the
concept of the underclass—a much more negative
view of poor people.
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Charles Murray reemphasized perverse incentives
by arguing that welfare regulations make work and
marriage less attractive and rising welfare benefits
more attractive.
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The Culture of Poverty
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Sociologist William Julius Wilson turned the focus
from welfare to factors such as deindustrialization,
globalization, suburbanization, and discrimination
as causes of urban poverty.
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In the past twenty to thirty years, policies to
combat poverty have focused on encouraging work
and offering benefits that directly serve children.
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The Culture of Poverty
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In her book What Money Can’t Buy, sociologist
Susan Mayer writes that she found very little
evidence to support the widely held belief that
parental income has a significant effect on
children’s outcomes.
In The Bell Curve, Charles Murray and Richard
Hernstein argued that it’s not poverty or education
or parenting that ultimately has the most impact on
children’s outcomes, but simply genes.
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The Culture of Poverty
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James Rosenbaum’s study of the Gautreaux Assisted Living
Program in Chicago and the Moving to Opportunity (MTO)
study began in 1994.
 Both were efforts to see how moving families from
high-poverty to low-poverty communities might affect
parental employment, children’s outcomes, and a host of
other factors.
 The results of these studies were mixed for various
reasons, but the MTO study in particular seemed to
show that living in a quieter, less stressful environment
did have very positive effects on children.
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Poverty Among Plenty
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Absolute poverty is the point at which a
household’s income falls below the necessary level
to purchase food to physically sustain its members.
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Poverty Among Plenty
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The official poverty line in the United States is calculated
using a formula developed in the 1960s by Mollie
Orshansky.
 It estimates food costs for a variety of family types
based on U.S. Department of Agriculture
recommendations for minimum food requirements and
then applies a multiplier.
 This formulation has not changed since it was
introduced but it has been heavily criticized for not
evolving to reflect broad changes in people’s
circumstances over the past forty years.
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Poverty Among Plenty
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A more fundamental criticism of trying to establish an
absolute measure of poverty is that it is impossible because
every measure is relative.
 Different societies and even different groups within one
society define poverty differently—there are different,
socially constructed notions of what things in life are
absolute necessities.
 A partial response to this is the use of relative poverty,
a measurement of poverty based on a percentage of the
median income in a given location.
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Poverty Among Plenty
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There are three basic theories about how poverty negatively
affects children:
 One focuses on the material deprivations caused by a
family’s low socioeconomic status
 The second focuses on bad parenting practices that are
related to a family’s low socioeconomic status
 The third focuses on differences between poor parents
and higher-income parents, but without much faith that
anything can be done to affect these differences
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Why Is the United States So Different?
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The United States has a much broader range of
inequality (our rich are a whole lot richer than our
poor) than any other developed nation in the world
and higher poverty rates (a larger percentage of the
population is below the poverty line).
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Why Is the United States So Different?
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A number of theories have been advanced as to
why the United States is in this unique position
among industrialized nations, including the timing
of the transition to free-market capitalism by other
countries compared to the United States; our
decentralized form of government in which states
have a lot of power.
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Why Is the United States So Different?
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The history of feudalism in Europe, which may
have laid the groundwork for a more paternalistic
state; and race—efforts to exclude blacks from
mainstream society far into the twentieth century
sometimes involved limiting social services.
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Concept Quiz
1. Poverty can best be defined as _______.
a) the point at which a household’s income falls below a percentage
of the median income in a given location
b) the unequal distribution of wealth that results from private
ownership and people’s tendency to preserve surplus wealth rather
than share it with others
c) a condition of deprivation due to economic circumstances that is
severe enough that the individual in this condition cannot live with
dignity in his or her society
d) the point at which a household’s income falls below the necessary
level to purchase food to physically sustain its members
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Concept Quiz
2. In What Money Can’t Buy, sociologist Susan Mayer
challenged the common assumption that ________.
a) the welfare system encourages dependence on government
handouts
b) many welfare recipients do not want transition to work
c) poverty directly causes poor health, behavioral problems, and
a host of other problems for children
d) low-income neighborhoods breed welfare dependence, crime,
and divorce
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Concept Quiz
3. The _________, as the label was conceived by journalist
Ken Auletta, refers to people who not only are unable to
take advantage of what society has to offer, but also are
increasingly deviant and even dangerous to the rest of
society.
a) underclass
b) working poor
c) nonworking poor
d) welfare dependent
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Concept Quiz
4. The Gautreaux Assisted Living Program in Chicago and
the Moving to Opportunity study provided opportunities
to explore __________.
a) the effects on families of living in a low-poverty versus a
high-poverty neighborhood
b) how home ownership affects parental employment children’s
educational outcomes
c) regional differences in public housing programs
d) how social conditions are a greater determinant of outcomes
than income
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Concept Quiz
5. Which of the following are criticisms of how the poverty
line is calculated in the United States?
a) The formula does not reflect that housing now takes up a
much larger portion of family budgets.
b) The formula should focus only on income instead of also
including assets.
c) The formula does not take regional variations into account.
d) All of the above
e) Both A and C
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Concept Quiz
6. The level of income inequality in the United States is
______ .
a)
b)
c)
d)
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lower than that of most other developed countries
higher than that of most other developed countries
higher than that of many developing countries
higher than that of all other developed countries
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Figure 15.1 | Number in Poverty
versus Poverty Rate
Figure 15.2 | Cost of Living, 2007
Figure 15.3 | Absolute Poverty Rate
(percentage of the population)
Figure 15.4 | U.S. Savings Rate
Table 15.1 | Net Worth of Black
and White Families, 1994