Poverty in the United States

Poverty in the United States

The most common measure of poverty in the United States is the "poverty line" set by the U.S. government. This measure recognizes poverty as a lack of those goods and services commonly taken for granted by members of mainstream society.Schwartz, J. E. (2005). "Freedom reclaimed: Rediscovering the American vision". Baltimore: G-University Press.] The official threshold is adjusted for inflation using the consumer price index. Poverty in the United States is cyclical in nature with roughly 12% to 16% living below the federal poverty line at any given point in time, and roughly 40% falling below the poverty line at some time within a 10 year time span. [Zweig, Michael (2004) "What's Class Got to do With It, American Society in the Twenty-first Century. ILR Press. ISBN 978-0801488993] Most Americans (58.5%) will spend at least one year below the poverty line at some point between ages 25 and 75.Hacker, J. S. (2006). "The great risk shift: The new insecurity and the decline of the American dream". New York: Oxford University Press (USA).] While there remains some controversy over whether the official poverty threshold over- or understates poverty, the United States has some of the highest absolute and relative pre- and post-transfer poverty rates in the developed world.Kenworthy, L. (1999). Do social-welfare policies reduce poverty? A cross-national assessment. "Social Forces, 77"(3), 1119-1139.] Bradley, D., Huber, E., Moller, S., Nielson, F. & Stephens, J. D. (2003). Determinants of relative poverty in advanced capitalist democracies. "American Sociological Review, 68"(3), 22-51.] Overall, the U.S. ranks 12th on the Human Development Index.cite web|url=http://hdrstats.undp.org/buildtables/rc_report.cfm|title=United Nations Development Programme. (May, 2006). "Human Development Report Data: Population living below 50% of median income".|accessdate=2007-11-08]

Those under the age of 18 were the most likely to be impoverished. In 2006 the poverty rate for minors in the United States was the highest in the industrialized world, with 21.9% of all minors and 30% of African American minors living below the poverty threshold. [ [http://www.epinet.org/content.cfm/webfeatures_snapshots_20060719 U.S. Government Does Relatively Little to Lessen Child Poverty Rates] ] Moreover, the standard of living for those in the bottom 10% was lower in the U.S. than other developed nations except the United Kingdom, which has the lowest standard of living for impoverished children in the developed world.cite book | last = Williams | first = Brian | authorlink = | coauthors = Stacey C. Sawyer, Carl M. Wahlstrom | year = 2005 | title = Marriages, Families & Intimate Relationships | publisher = Pearson | location = Boston, MA | id = 0-205-36674-0] According to a 2008 report released by the Carsey Institute at the University of New Hampshire, on average, rates of child poverty are persistently higher in rural parts of the country relative to suburban areas and share similar rates with many central cities. [Citation | last = Savage | first = Sarah
title = Child Poverty High in Rural America | url=http://www.carseyinstitute.unh.edu/publications/FS_RuralChildPoverty_08.pdf | accessdate = 2008-08-26
] [ [http://newswise.com/articles/view/543788/ Child Poverty High in Rural America] Newswise, Retrieved on August 26, 2008.]

Measures of poverty

Measures of poverty can be either absolute or relative.

The official measure of poverty

There are two basic versions of the federal poverty measure: the poverty thresholds (which are the primary version) and the poverty guidelines. The Census Bureau issues the poverty thresholds, which are generally used for statistical purposes—for example, to estimate the number of people in poverty nationwide each year and classify them by type of residence, race, and other social, economic, and demographic characteristics. The Department of Health and Human Services issues the poverty guidelines for administrative purposes—for instance, to determine whether a person or family is eligible for assistance through various federal programs. [Fisher, G.M. (2003) [http://www.census.gov/hhes/poverty/povmeas/papers/orshansky.html The Development of the Orshansky Poverty Thresholds] . Accessed: 2003-12-27]

Since the 1960s, the United States Government has defined poverty in absolute terms. When the Johnson administration declared "war on poverty" in 1964, it chose an absolute measure. The "absolute poverty line" is the threshold below which families or individuals are considered to be "lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health."

The "Orshansky Poverty Thresholds" form the basis for the current measure of poverty in the U.S. Mollie Orshansky was an economist working for the Social Security Administration (SSA). Her work appeared at an opportune moment. Orshansky's article was published later in the same year that Johnson declared war on poverty. Since her measure was absolute (i.e., did not depend on other events), it made it possible to objectively answer whether the U.S. government was "winning" this war. The newly formed United States Office of Economic Opportunity adopted the lower of the Orshansky poverty thresholds for statistical, planning, and budgetary purposes in May 1965.

The Bureau of the Budget (now the Office of Management and Budget) adopted Orshansky's definition for statistical use in all Executive departments in 1965. The measure gave a range of income cutoffs, or thresholds, adjusted for factors such as family size, sex of the family head, number of children under 18 years old, and farm or non-farm residence. The economy food plan (the least costly of four nutritionally adequate food plans designed by the Department of Agriculture) was at the core of this definition of poverty. [http://www.census.gov/hhes/income/defs/poverty.html Poverty Definition] U.S. Census Bureau. Accessed: 2003-12-27.]

The Department of Agriculture found that families of three or more persons spent about one third of their after-tax income on food. For these families, poverty thresholds were set at three times the cost of the economy food plan. Different procedures were used for calculating poverty thresholds for two-person households and persons living alone. Annual updates of the SSA poverty thresholds were based on price changes in the economy food plan.

Two changes were made to the poverty definition in 1969. Thresholds for non-farm families were tied to annual changes in the Consumer Price Index (CPI) rather than changes in the cost of the economy food plan. Farm thresholds were raised from 70 to 85% of the non-farm levels.

In 1981, further changes were made to the poverty definition. Separate thresholds for "farm" and "female-householder" families were eliminated. The largest family size category became "nine persons or more."

Apart from these changes, the U.S. government's approach to measuring poverty has remained static for the past forty years.

However, there are reasons to believe that the official government numbers greatly exaggerate the extent of poverty: Sociologists and researchers who have looked beyond official income figures by actually interviewing real poor people have found that many people officially classified by income as "poor" actually have significant unreported sources of income, usually in the underground economy, incomes that indicate they are not by any means in poverty. In addition, a significant increase in the poverty stats consists of poor people coming into the United States from other countries--people whose poverty originated in other countries. Given this, and given that about one third of all people in poverty are actually only temporarily in poverty (for instance college students temporarily poor while getting their degrees and preparing for successful careers in the future), many scholars estimate that the actual number of U.S. citizens suffering from long-term poverty is probably around 4 percent (four percent) of the general population--a number which compares favorably to Africa (with about 90% in long term poverty), China (with maybe 75 percent in long term poverty), and so on.

Recent poverty rate and guidelines

The official poverty rate in the U.S. increased for four consecutive years, from a 26-year low of 11.3% in 2000 to 12.7% in 2004, then declined somewhat to 12.3% in 2006. This means that 36.5 million people (approx 1 in 8 Americans) were below the official poverty thresholds in 2006, compared to 31.1 million in 2000 [ [http://www.census.gov/Press-Release/www/2001/cb01-158.html "Nation's Household Income Stable in 2000, Poverty Rate Virtually Equals Record Low, Census Bureau Reports"] , 10 October, 2001, census.gov.] , and that there was an increase of 5.4 million poor from 2000 to 2006 while the total population grew by 17.5Fact|date=October 2007 million. [cite web | title=www.census.gov/ps | work=Poverty Status of People by Family Relationship, Race, and Hispanic Origin: 1959 to 2006 | url=http://www.census.gov/hhes/www/poverty/histpov/hstpov2.html | accessmonthday=September 08 | accessyear=2007] The poverty rate for children under 18 years old increased from 16.2% to 17.8% from 2000 to 2004 and had dropped to 17.4% in 2005 and 2006. [cite web | title=www.census.gov/h | work=Poverty:2006 highlights | url=http://www.census.gov/hhes/www/poverty/poverty06/pov06hi.html | accessmonthday=September 08 | accessyear=2007] The 2007-2008 poverty threshold was measured according to the HHS Poverty Guidelines [cite web | title=www.hhs.gov | work=The 2008 HHS Poverty Guidelines | url=http://aspe.hhs.gov/poverty/08poverty.shtml | accessmonthday=Feb 17 | accessyear=2008] which are illustrated in the table below.

Food security

Eighty-nine percent of American households were food secure throughout the entire year 2002, meaning that they had access, at all times, to enough food for an active, healthy life for all household members. The remaining households were food insecure at least some time during that year. The prevalence of food insecurity rose from 10.7% in 2001 to 11.1% in 2002, and the prevalence of food insecurity with hunger rose from 3.3% to 3.5%. [ [http://www.ers.usda.gov/publications/fanrr35/fanrr35.pdf Household Food Security in the United States, 2002] - United States Department of Agriculture]

Factors of poverty

There are numerous factors related to poverty in the United States.

ociological factors

Some poverty in the United States is the result of social institutions which contribute to and sustain poverty. cite book
last= Marger
first = Martin N.
title= Social Inequality: Patterns and Processes, 4th ed.
publisher= McGraw-Hill
location = Boston
pages= 159
isbn= 978-0-07-352815-1
.] Some claim that poverty is also the product of deindustrialization. As the U.S. shifts from a manufacturing, industrial society to a service-oriented, high-tech society, many of the blue-collar jobs that required little education but paid well are disappearing or being outsourced. Rural areas, such as Appalachia, suffer losses of mining jobs.

Other factors in poverty

*Tax levels Cross-country data shows a correlation between tax levels as a share of GDP and child poverty. cite web|url=http://www.policyalternatives.ca/documents/National_Office_Pubs/2006/Benefits_and_Costs_of_Taxation.pdf|title= The Social Benefits and Economic Costs of Taxation|accessdate=2007-12-20]
* Limited job opportunities appear to exist for significant subgroups of some races and ethnic groups. This is reflected by the low-income nature of large sections of the economy, as divided along racial/ethnic lines: 21% of all children in the United States live in poverty, but 46% of African American children and 40% of Latino children live in poverty. [Center for the Future of Children, The Future of Children. Vol. 7, No 2, 1997.]
* The Heritage Foundation speculates that illegal immigration increases job competition among low wage earners, both native and foreign born. Additionally many first generation immigrants, namely those without a high school diploma, are also living in poverty themselves.cite web|url=http://www.heritage.org/Research/Immigration/SR9.cfm#_ftn2|title=Heritage Foundation's views of immigration and poverty|accessdate=2007-02-25]


There has been significant disagreement about poverty in the United States; particularly over how poverty ought to be defined. Using radically different definitions, two major groups of advocates dispute whether or not more resources are needed to help lessen poverty. Liberals consistently claim that more resources are needed to alleviate poverty. Conservatives often argue that the condition of the poor does not presently require more resources but rather an allocation that encourages a temporary dependence upon the American social safety net.

Much of the debate about poverty focuses on statistical measures of poverty and the clash between advocates and opponents of welfare programs and government regulation of the free market. Since measures can be either absolute or relative, it is possible that advocates for the different sides of this debate are basing their arguments on different ways of measuring poverty. It is often claimed that poverty is understated, yet there are some who also believe it is overstated; thus the accuracy of the current poverty threshold guidelines is subject to debate and considerable concern.

In a 2003 editorial in The Washington Times, Bruce Bartlett wrote, "In a supplementary report that got no press attention, the Census Bureau looked at some of these new necessities and their ownership by the poor. It turns out many poor people today own appliances that were considered luxuries when I grew up, and some that would still be considered luxuries today. For example, 91 percent of those in the lowest 10 percent of households -- all officially poor -- own color TVs, 74 percent own microwave ovens, 55 percent own VCRs, 47 percent own clothes dryers, 42 percent own stereos, 23 percent own dishwashers, 21 percent own computers and 19 percent own garbage disposals. When I grew up in the 1950s, only the wealthy owned color TVs, clothes dryers, stereos, dishwashers and disposals. These were all considered luxuries. We got by with black-and-white TVs, hanging our wet clothes on a line to dry, washing dishes by hand and throwing our potato peels in a pail instead of down the drain. So did most other middle-class families. Not even the wealthiest people owned microwave ovens, VCRs or computers." [ [http://www.washtimes.com/news/2003/oct/05/20031005-111129-3478r/ Poverty yardstick variables] , Bruce Bartlett, October 6, 2003]

However, as noted in "EU versus USA", only 11% of those in the general UK population own a dishwasher, and the penetration rate of microwave ovens in the EU is generally well under 30% cite web|url=http://www.timbro.se/bokhandel/pdf/9175665646.pdf|title=EU versus USA|accessdate=2007-10-11] . The report goes on to note that 46% of poor households in the US own their own home, and 30% have two or more cars, and 63% have cable or satellite TV.

Concerns regarding accuracy

In recent years, there have been a number of concerns raised about the official U.S. poverty measure. In 1995, the National Research Council's Committee on National Statistics convened a panel on measuring poverty. The findings of the panel were that "the official poverty measure in the United States is flawed and does not adequately inform policy-makers or the public about who is poor and who is not poor."

The panel was chaired by Robert Michael, former Dean of the Harris School of the University of Chicago. According to Michael, the official U.S. poverty measure "has not kept pace with far-reaching changes in society and the economy." The panel proposed a model based on disposable income:cquote
According to the panel's recommended measure, income would include, in addition to money received, the value of non-cash benefits such as food stamps, school lunches and public housing that can be used to satisfy basic needs. The new measure also would subtract from gross income certain expenses that cannot be used for these basic needs, such as income taxes, child-support payments, medical costs, health-insurance premiums and work-related expenses, including child care. [Harms, W. (1995) [http://chronicle.uchicago.edu/950511/poverty.shtml Poverty definition flawed, more accurate measure needed] The University of Chicago Chronicle, 14:17.]

Understating poverty

Many sociologists and government officials have argued that poverty in the United States is understated, meaning that there are more households living in actual poverty than there are households below the poverty threshold.cite book | last =Adams | first =J.Q. | authorlink = | coauthors =Pearlie Strother-Adams | year =2001 | title =Dealing with Diversity | publisher =Kendall/Hunt Publishing Company | location =Chicago, IL | id = 0-7872-8145-X] A recent NPR report states that as much as 30% of Americans have trouble making ends meet and other advocates have made supporting claims that the rate of actual poverty in the US is far higher than that calculated by using the poverty threshold.cite book | last =Adams | first =J.Q. | authorlink = | coauthors =Pearlie Strother-Adams | year =2001 | title =Dealing with Diversity | publisher =Kendall/Hunt Publishing Company | location =Chicago, IL|id = 0-7872-8145-X] While the poverty threshold is updated for inflation every year, the basket of goods used to determine what constitutes being deprived of a socially acceptable miniumum standard of living has not been updated since 1955. As a result, the current poverty line only takes goods into account that were common more than 50 years ago, updating their cost using the Consumer Price Index. Mollie Orshansky, who devised the original goods basket and methodology to measure poverty, used by the U.S. government, in 1963-65, updated the goods basket in 2000, finding that the actual poverty threshold, i.e. the point where a person is excluded from the nation's prevailing consumption patterns, is at roughly 170% of the official poverty threshold. According to John Schwarzt, a political scientist at the University of Arizona,

The official poverty line today is essentially what it takes in today's dollars, adjusted for inflation, to purchase the same poverty-line level of living that was appropriate to a half century ago, in 1955, for that year furnished the basic data for the formula for the very first poverty measure. Updated thereafter only for inflation, the poverty line lost all connection over time with current consumption patterns of the average family. Quite a few families then didn't have their own private telephone, or a car, or even a mixer in their kitchen... The official poverty line has thus been allowed to fall substantially below a socially decent minimum, even though its intention was to measure such a minimum.

The issue of understating poverty is especially pressing in states with both a high cost of living and a high poverty rate such as California where the median home price in May 2006 was determined to be $564,430. With half of all homes being priced above the half million dollar mark and prices in urban areas such as San Francisco, San Jose or Los Angeles being higher than the state average, it is almost impossible for not just the poor but also lower middle class worker to afford decent housing Fact|date=February 2007, and no possibility of home ownership. In the Monterey area, where the low-pay industry of agriculture is the largest sector in the economy and the majority of the population lacks a college education the median home price was determined to be $723,790, requiring an upper middle class income which only roughly 20% of all households in the county boast.cite web|url=http://biz.yahoo.com/bw/060627/20060627005927.html?.v=1|title=California median home price|accessdate=2006-07-06] cite web|url=http://factfinder.census.gov/servlet/QTTable?_bm=y&-geo_id=05000US06053&-qr_name=DEC_2000_SF3_U_QTP32&-ds_name=D&-_lang=en|title=Monterey County income distribution|accessdate=2006-07-06] Such fluctuations in local markets are however not considered in the Federal poverty threshold and thus leave many who live in poverty-like conditions out of the total number of households classified as poor.

Overstating poverty

The federal poverty line also excludes income other than cash income, especially welfare benefits. Thus, if food stamps and public housing were successfully raising the standard of living for poverty stricken individuals, then the poverty line figures would not shift since they do not consider the income equivalents of such entitlements. [ [http://www.washtimes.com/commentary/20060906-100020-4785r.htm Poor Poverty Yardsticks] by Rea Hederman, Heritage Foundation, "Washington Post." September 7, 2006. Accessed: 2007-02-18 ]

A 1993 study of low income single mothers titled "Making Ends Meet," by Kathryn Edin, a sociologist at the University of Pennsylvania, showed that the mothers spent more than their reported incomes because they could not "make ends meet" without such expenditures. According to Edin, they made up the difference through contributions from family members, absent boyfriends, off-the-book jobs, and church charity.

According to Edin: "No one avoided the unnecessary expenditures, such as the occasional trip to the Dairy Queen, or a pair of stylish new sneakers for the son who might otherwise sell drugs to get them, or the Cable TV subscription for the kids home alone and you are afraid they will be out on the street if they are not watching TV." [ However many mothers skipped meals or did odd jobs to cover those expenses. According to Edin, "most welfare-reliant mothers food and shelter alone cost almost as much as these mothers received from the government. For more than one-third, food and housing costs exceeded their cash benefits, leaving no extra money for uncovered medical care, clothing, and other household expenses." [ Devising New Math to Define Poverty] by Louis Uchitelle, "New York Times." 1999-10-18. Accessed: 2006-06-16 ]

Moreover, Swedish free market think tank Timbro point out that lower-income households in the U.S. tend to own more appliances and larger houses than many middle-income Western Europeans.cite web|url=http://www.timbro.se/bokhandel/pdf/9175665646.pdf|title=E.U. vs U.S.A, Timbro|accessdate=2007-11-10]

Fighting poverty

There have been many governmental and nongovernmental efforts to make an impact on poverty and its effects. These range in scope from neighborhood efforts to campaigns with a national focus. They target specific groups affected by poverty such as children, people who are autistic, immigrants, or people who are homeless. Efforts to alleviate poverty use a disparate set of methods, such as advocacy, education, social work, legislation, direct service or charity, and community organizing.

Recent debates have centered on the need for policies that focus on both "income poverty" and "asset poverty." Advocates for the approach argue that traditional governmental poverty policies focus solely on supplementing the income of the poor, through programs such as AFCD and Food Stamps. These programs do little, if anything, to help the poor build assets and begin to lift themselves out of poverty. Some have proposed creating a government matched savings plan (similar to the private 401K) system to provide a savings incentive to poor and lower-income individuals and families.

Negative income tax

- From 1968 to 1979 a massive social experiment was undertaken in the U.S. [http://usbig.net/papers/013-Sheahen.doc : The Negative Income Tax Experiments of the 1970s in the USA] The four experiments were in:

#Urban areas in New Jersey and Pennsylvania from 1968-1972 (1300 families).
#Rural areas in Iowa and North Carolina from 1969-1973 (800 families).
#Gary, Indiana from 1971-1974 (1800 families).
#Seattle and Denver, from 1970-1978 (4800 families).

Campaign to Reduce Poverty in America

Catholic Charities USA released the [http://www.catholiccharitiesusa.org/poverty : "Campaign to Reduce Poverty in America"] based on its paper "Poverty in America: A Threat to the Common Good" in January 2007.

From Poverty to Prosperity

In April 2007 The Center for American Progress, a think tank, released a report [http://www.americanprogress.org/issues/2007/04/poverty_report.html : "From Poverty to Prosperity: A National Strategy to Cut Poverty in Half"] . It recommended 12 steps to cut poverty in half by 2017, including raising the minimum wage, expanding the Earned Income Tax Credit, and promoting unionization by enacting the Employee Free Choice Act.


Citing data from the U.S. Census Bureau in a 2005 editorial, economist Walter E. Williams of George Mason University wrote that the poverty rate among single-parent black families was 39.5%, while it was only 9.9% among married-couple black families. Among white families, the comparable rates were 26.4% and 6%. [ [http://www.jewishworldreview.com/cols/williams102705.asp Ammunition for poverty pimps] Walter E. Williams, October 27, 2005]

ee also

* Income in the United States
* Income inequality in the United States
* The Other America by Michael Harrington (ISBN 0-684-82678-X)
* Two Americas
* Lowest-income counties in the United States
* Human Poverty Index
* Mississippi Teacher Corps
* Federal assistance in the United States
* Basic Income
* Negative Income Tax


Further reading

*cite book
first = Harry | last = Caudill | year = 1962 | authorlink = Harry M. Caudill
title = Night Comes to the Cumberlands | publisher = Little, Brown and Company |id = ISBN 0-316-13212-8

*cite book
first = Michael | last = Harrington | year = 1962 | authorlink = Michael Harrington
title = The Other America | publisher = Macmillan |id = ISBN 0-684-82678-X

*cite journal | last = Sarnoff | first = Susan
title = Central Appalachia – Still the Other America | journal = Journal of Poverty
volume = Volume 7 | issue = 1 & 2 | pages = 123–139 | publisher = The Haworth Press
date=2003 | url = http://www.journalofpoverty.org/JOPABS/JPOABS21.HTM
doi = 10.1300/J134v07n01_06

External links

*U.S. Census Bureau [http://www.census.gov/hhes/www/poverty/definitions.html Poverty Definition]
*U.S. Census Bureau [http://www.census.gov/hhes/www/poverty/poverty.html Poverty in the United States]
* [http://www.aei.org/publications/filter.all,pubID.24855/pub_detail.asp Why Poverty Doesn't Rate] , American Enterprise Institute
* [http://www.solvingpoverty.com Social Solutions to Poverty: America's Struggle to Build a Just Society.] Scott Myers-Lipton, (2006).
* [http://taxjustice.blogspot.com/2007/12/tax-and-child-poverty.html Child Poverty and Tax: a simple graph of child poverty in OECD countries against tax burdens.] Source: [http://www.policyalternatives.ca/documents/National_Office_Pubs/2006/Benefits_and_Costs_of_Taxation.pdf]
*F.H.C. Ministries [http://www.fhcministries.org/ Charity is not Reform!]
* [http://www.americanprogress.org/issues/2007/04/poverty_report.html From Poverty to Prosperity: A National Strategy to Cut Poverty in Half] , The Center for American Progress, April 2007.
* [http://www.dollarsandsense.org/archives/2006/0106dollar.html Explanation of poverty definition] by economist Ellen Frank in Dollars & Sense magazine, January/February 2006
* [http://www.dollarsandsense.org/archives/2000/0300bergmann.html "Deciding Who's Poor"] by economist Barbara Bergmann in Dollars & Sense magazine, March/April 2000
* [http://observer.guardian.co.uk/world/story/0,,1712965,00.html 37 million poor hidden in the land of plenty]
*David Walls, [http://www.sonoma.edu/users/w/wallsd/models-of-poverty.shtml Models of Poverty and Planned Change]
* [http://www.epinet.org/content.cfm/webfeatures_snapshots_20060719 U.S. Government Does Relatively Little to Lessen Child Poverty Rates]
* [http://aspe.hhs.gov/poverty/index.shtml U.S. Department of Health & Human Services Poverty Guidelines, Research, and Measurement]

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