Poverty-line expenditures on non-food items, such as shelter, clothing and medical needs, were also established by taking survey data into account. How much do you need to spend on food to consume the baseline calories in India? The standards proposed for India contrast sharply with those in the U. The daily cost of the U. This budget allows for meals at home that consist of grains, vegetables, fruits, milk products, meat, beans and other foods, and that meet the U.
Not unlike India, the poverty line in the U. As proposed by Mollie Orshansky in , the U. By that standard, the U. Compared with the food budget for an urban Indian family at the poverty line, the food budget in the U.
The overall U. Although by the levels of living prevailing elsewhere, some of the poor in this country might be well-to-do, no one here today would settle for mere subsistence as the just due for himself or his neighbor, and even the poorest may claim more than bread.
Pritchett made his proposal based on data and prices a decade ago and so it is necessary to update his calculations. In the following section I consider a long number of benchmarks that made me arrive at this poverty line. Here is the short summary of these comparisons:. The range of possible higher poverty lines based on richer countries is wide, as the list of benchmarks suggests.
A reality check for any poverty line you might want to consider is to ask yourself what you think about living on less than that poverty line yourself. Calculating the poverty line for European countries therefore means that we look up their median income and then multiply it by 0. This is less straightforward than it might first appear. The reason for that is that there are many different income concepts.
Do you take government transfers into account or not? How do you take into account that you have a child for which you need to pay? It is possible to take these and many other aspects into account and arrive at useful statistics, but various sensible ways of addressing such questions lead to many different income metrics.
As such, in comparing different poverty thresholds across countries we have to take care to avoid mixing different income concepts as much as possible.
This dataset is called PovcalNet , and it is this that we must use in order to make comparisons of poverty measures in different countries according to the same income concept.
In this dataset we find the median income for countries around the world and we can take that median income and then apply the logic on which the European poverty lines are based. In the extensive footnote here you find more details and the full calculations.
UnlikeEuropean countries, the US does not set the poverty line in a relative way. Instead the US poverty line dates back to the work of Mollie Orshansky, an economist working for the Social Security Administration in the early s.
Since then it has been of course revised for price changes, but otherwise it remained unchanged. The US poverty line is very often criticised as being too low. Those that criticize the US poverty line in that way therefore suggest that the severity of poverty in the US is understated in the statistics. How high is the poverty line in the US? Now the problem with comparing this poverty line with the global statistics is again that the income concept is different.
The US crucially relies on an equivalence scale for adjusting the income cutoff depending on the household size. An alternative is to apply the same concept that the Europeans are using for their poverty line determination. Within the range of poverty lines in European countries. The UN and Pritchett rely on the existing poverty lines in low-income and high-income countries respectively to derive their poverty lines. We can follow other approaches too. An obvious one is to ask what people out there believe: Who is considered poor in a high-income country by people in high-income countries?
For the regular poverty report of the German government, a survey is conducted that asks Germans below which income level they consider someone as poor.
The latest data is from the year In international dollars per day this corresponds to an income of int. Germany pays basic social care for its citizens. How much a person receives depends on the particular circumstances of the individual, but we can look at the average payment. In a single person received on average Euro per month. Surveys also indicate that the poor prefer work to receiving help from the government or from family members. For many low-income people, however, jobs are often unavailable; if available, they often pay poorly or do not provide health insurance.
To make ends meet, many people in poverty rely on public or familial assistance. Most women value their ability to combine work, welfare, and family support, and to use welfare while improving their job prospects. But many poor people distrust the government policies and programs that were ostensibly designed to help them. Daniel T. Lichter is professor of sociology and the Robert F. Over the past 30 years, a growing share of working-age adults in poverty have been labor force nonparticipants, rising from 42 percent in to 58 percent in These increases have been driven primarily by larger numbers of those with a disability, as well as by students in poverty, and to a lesser extent by early retirees.
While the number of working-age students living in poverty increased dramatically with the onset of the Great Recession, the other labor force nonparticipant classifications have been steadily increasing over a longer time period. The number of disabled working-age adults in poverty has increased nearly every year, rising from a In contrast, the increase in students in poverty has been a more recent phenomenon. A worsening labor market during the recession may have lowered the opportunity cost of attending school, encouraging people without jobs to enter degree programs.
The American Recovery and Reinvestment Act of increased the generosity of Pell Grants and introduced new postsecondary education tax benefits. Furthermore, as Sarah Turner documented in a Hamilton Project policy proposal, the Departments of Education and Labor sent a guidance letter to states which informed them that unemployment insurance recipients were eligible for Pell Grants, in turn increasing postsecondary enrollment.
But, as shown in figure 5, the number of students who are poor has stayed large during the recovery, possibly reflecting a declining share of students who work while in school. Some students may have other resources, from parents or loans, to support themselves while in school, while others may face material wants.
Not surprisingly, the share of labor force participants living in poverty increased overall during the Great Recession, though the number in poverty who were working full-time decreased as part-time work and unemployment increased. As the unemployment rate doubled, a much larger share of those in poverty were actively seeking employment rising from 3. In , at the peak of both unemployment and involuntary part-time work, 2. In , , working-age adults were unemployed and living in poverty and 6.
Figure 6 describes the reasons given by adults living in poverty for working part-time in the past week as of March This is a different population than those who worked less than full-time year-round in figures 4 and 5. In there were 6. In March there were 3 million who reported working part-time in the previous week. Looking at why part-time workers were working part-time is of particular interest because working more hours would help to lift many of these workers out of poverty.
Critically, one in three of these workers was working part-time involuntarily. This is the group most likely to be helped by a strengthening economy. Other groups report an inability to work full-time for a variety of reasons specific to their circumstances.
Almost a quarter of part-time workers living in poverty were working part-time because of caregiving responsibilities. One-fifth of part-time workers living in poverty were working part-time while going to school. Five percent of part-time workers living in poverty were disabled and 2 percent were early retirees.
In the past 20 years, growth in the number of part-time workers has been driven both by cyclical factors and other trends.
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