Poverty: An Overview

Over half of all Americans will be poor at some point in their lives.[1] Millions of people in the United States and billions around the world live their entire lives with inadequate incomes, unable to develop their God-given talents or even thrive at a minimal level. Great musicians never pick up an instrument. Gifted teachers don’t finish high school. Wonderful writers can barely read. Potential nurses, lawyers, chefs, business leaders, and mechanics are caught in the trap of poverty and we are all the worse for it. In recent decades it has become harder, not easier, for a child in the United States to rise above their parent’s socio-economic level, and upward mobility is less common in the United States than in other major industrialized nations.

Around the world, nearly one billion people are hungry. Some 40 percent of the world’s population, approximately 2.6 billion people, lives on less than $2 per day.[2] Nearly 9 million children die before their fifth birthday but, thankfully, that number is declining.[3] The poverty of the global South exists in stark contrast to the wealth in the global North and the abundance that God has blessed us with.

Poverty is not inevitable. In a rich world and in this incredibly rich nation, the poor do not have to be with us always. The eradication of poverty is possible.

We Can Eradicate Poverty

It is possible to greatly reduce and even eliminate the affliction that is poverty. In the United States, there have been two times since World War II when poverty declined dramatically. Graph of the poverty rate, 1959-2010. Between 1959 and 1973, the poverty rate fell by half (from 22.4% to 11.1%) due to low unemployment, rising wages at the bottom and middle of the income ladder as well as at the top, and the War on Poverty.[4]  But after 1973, the poverty rate rose and has never again attained such a low level.

Poverty fell again between 1993 and 2000 driven by low unemployment and rising wages for those at the bottom of the income ladder as well as the top. Over just seven years, the poverty rate declined sharply from 15.1% to 11.3%.[5] The declines were especially large for African Americans (from 33% living in poverty in 1993 to 23% in 2000) and Hispanics (31% to 22%). After 2000, even before the 2007 economic crisis hit, unemployment climbed, gains in national income were increasingly captured by a small group at the top, and poverty rose. Since then, more people have lost their jobs and wages in the lower rungs of the economic ladder have fallen or stagnated. Poverty has risen. But if the U.S. economy were to again experience low unemployment and rising wages in low-wage jobs, poverty would undoubtedly fall once again. A concerted effort – to create jobs, raise wages, and provide additional supports for those who need them – can bring an end to poverty.

Even global poverty is not inevitable. Some countries have had great improvements in their living standards and social outcomes. Over the past 40 years, income per person rose nine-fold in Botswana and over five-fold in Thailand and Malaysia.[6] These are still poor countries but they are making enormous progress in overcoming poverty. Indonesia, South Korea and India have made remarkable strides in raising income and/or other measures of human development such as health and education.[7] In developing regions worldwide, the share of people living on less than $1.25 a day fell from 46% in 1990 (1.8 billion people) to 27% in 2005 (1.4 billion).[8]


Endnotes

[1] Rank, Mark and Thomas Hirschl, “The Likelihood of Poverty across the American Adult Life Span,” in Social Work 44:201–16

[2] Data are for 2005 from World Bank Development Indicators, 2008.

[3] Dugger, Celia A., “Child Mortality Rate Declines Globally,” New York Times, September 9, 2009.

[4] Economic Policy Institute, “Poverty no longer falls as economy grows,” from State of Working America. Accessed June 25, 2011.

[5] U.S. Bureau of the Census, Historical Poverty Tables -- People, Table 2. Accessed October 14, 2011.

[6] United Nations Development Program, Human Development Report 2010, p. 42.

[7] United Nations Development Program, Human Development Report 2010, pp. 25-43

[8] United Nations,  The Millennium Development Goals Report 2011, 2011 [4.04 MB], page 6. 

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CONTACT INFO

Ms. Edith Rasell, Ph.D.
Minister for Economic Justice
700 Prospect Ave.
Cleveland, Ohio 44115
216-736-3709
raselle@ucc.org