Poverty is a lack of goods and services necessary to maintain a minimal adequate standard of living. The definition of the term adequate varies, however, with the general standard of living in a society and with public attitudes toward deprivation; no universally accepted definition of basic needs exists because poverty is a relative concept. In poorer countries it means living at the brink of subsistence. In the United States few impoverished families confront starvation, although many suffer from undernourishment. Inequality has been a problem in all societies. No society distributes income evenly. Some reasons for an inequality of incomes are acceptable to a society and others are unconscionable. During the 1970s and 1980s the income distribution of American families has tended to become more unequal, with the share of income received by the lowest 20% of families declining from 5.6% to 4.6%. In 1988 the top 5% of families received 3.7 times the money income of the poorest 20%, compared with 2.8 times 20 years earlier. MEASURING POVERTY Despite all the conceptual and technical problems of measurement, the U.S. government has devised a widely cited poverty index that reflects the different consumption requirements of families depending on their size and composition, on the sex and age of the family head, and on whether they live in rural or urban areas. Based on past surveys, the designers of the poverty index determined that families of three or more persons spend approximately one-third of their income on food; the poverty level for these families was, therefore, set at three times the cost of the economy food plan. For smaller families and persons living alone, the cost of the economy food plan was multiplied by higher factors in order to compensate for the larger fixed expenses of smaller households. The poverty thresholds are updated every year to reflect changes in the \Tconsumer price index\t but not overall rises in standard of living. The poverty index has several flaws. First, it does not allow for regional variations in the cost of living or for higher costs in the central-city areas, where many of the poor are concentrated. Second, the food costs for the budget were designed for "temporary or emergency use" and are thus inadequate for a permanent diet because they provide only the barest subsistence. Third--and possibly most important--the government poverty statistics fail to take into consideration nonmonetary benefits and assets in determining the number of poor. If these were counted, the numbers in the official poverty ranks would be reduced. For example, in 1989, 7.6% of the U.S. population received food stamps. Finally, the poverty index was calculated at three times the food budget because in the 1950s the average consumer spent one-third of his or her income for food. This proportion has since fallen to one-sixth, so that the food budget should now be multiplied by a higher figure. The growing gap between the poverty level and median family income demonstrates the inaccuracy of adjusting a poverty level for price increases but not for rising living standards and productivity gains. In 1960 the poverty threshold was nearly half the median income of a four-person family, but by 1988 the ratio had dropped to 30%. The poverty threshold quadrupled between 1960 and 1988, while the median family income increased 5.7 times. Median family income for four persons in 1960 was 1.9 times the poverty level. Such a family's income in 1988 was 2.7 times the poverty level. Alternative definitions and concepts have a major impact on the poverty estimates produced. For example, the Congressional Budget Office has estimated that if transfer payments (income-support programs such as social security) are not counted, then about 20% of all American families lived in poverty during 1988. Government income transfers are, however, included in the official poverty index, and this fact reduced the relative number of destitute Americans to roughly 13.1%. If in-kind programs such as medicaid, subsidized housing, and food stamps were also included, then the percentage in poverty might have been reduced to as low as 10.5%. IDENTIFYING THE POOR Counting only cash income and excluding in-kind assistance, poverty declined substantially in the 1960s. Almost 40 million persons, or 22% of the population, were classified as poor in 1960. By 1978 the figure fell to approximately 24 million, or 11.7%. Special governmental efforts to reduce poverty were responsible for part of the reduction. During the subsequent decade, however, poverty again increased as the number of poor Americans rose to 31.9 million in 1988, or about 13%. Some groups are more likely to experience poverty than others. For instance, blacks are three times as likely to be poor as whites. Families headed by women are nearly five times more likely to be poor than other families. Families where the head has no more than eight years of schooling are nearly five times as likely to be poor compared to families headed by a college-educated person. Changes in the number of poor disguise the considerable movement of people into and out of poverty. For example, a longitudinal study of 5,000 families by the University of Michigan Survey Research Center found that only 2.6% of the total sample remained poor for more than seven of the ten years studied. Minority- and female-headed units are not only more likely to be poor but less likely to escape from poverty. The poor face multiple impediments to self-sufficiency, including joblessness, less than a high school education, and dependence on welfare. These problems affect 1 in 13 poor married couples and 1 in 4 single family heads. This article discusses four different major groups of the poor: the elderly, children, employed working-age adults, and unemployed working-age adults. Each of these groups has different problems that are addressed by different programs. The Elderly In 1988, 12% of people aged 65 years or older lived in poverty, compared with 10.5% of younger adults. A drop in the number of aged poor--from 4.3 million (about 20%) in 1971 to 3.5 million in 1988--was due largely to more generous social security payments, private pensions, and veterans' pensions. Few elderly people hold jobs, and that is the main cause of poverty among the elderly. Some of the elderly poor are willing and able to hold regular jobs, but most cannot. An increasing number of elderly people living alone must support themselves. As the elderly become more numerous and live longer, meeting their income needs becomes increasingly burdensome. The best and often the only practicable way to help the aged poor is to give them some form of income support. Their more costly health-care needs must be met. Children Two of five persons classified as poor in 1988 were children under 18 years of age. This fact is of special social concern, because poor children who are denied opportunities from the start are unfairly hindered in preparing themselves for productive adult lives. Low-income families are often driven into poverty by the birth of additional children. In 1988, 48.2% of families with five or more children lived in poverty, compared with 14.1% of two-children families. In a society that ignores need in setting wages and that balks at providing child care for women who might earn needed income, a higher incidence of poverty among larger families is a logical consequence. Poor children also have special needs beyond those which can be provided by giving their families higher incomes. In particular, health care, compensatory education, and vocational training are essential to provide permanent freedom from poverty. In 1988, 3.6 million poor families (including 1.26 million children) were headed by females, an increase of 2.2 million over the past 20 years. More than half of all poor families are now headed by women, and female-headed families with children are six times more likely to be poor than two-parent families. The feminization of poverty threatens to create a permanent dependent underclass. The Working Poor Although the problem is often overstated, unemployment remains a major cause of poverty. The poor are the victims of forced idleness more frequently than the nonpoor. Poor family heads are about 5.5 times as likely to be unemployed as are the nonpoor. Being employed does not in itself guarantee an adequate income. In 1988, 1.9 million persons worked full-time year-round and still remained poor. For these people and their families, poverty results from low-paying jobs as well as from large families and periods of unemployment. The working poor also experience other labor-market difficulties. Many leave the work force voluntarily because of illness or disability or because they become discouraged about the prospects of finding a job and stop looking. A greater number of the working poor are employed at low-paying jobs. In 1988, 40% of all poor persons worked but could not overcome poverty. One-fifth of all poor families had two or more wage earners for part of the year and remained poor. The problems for the working poor are frequent joblessness, low wages, deficient education, and inadequate skills. The plight of the working poor can be alleviated by employment programs that streamline the operation of the labor market, increase the productivity of low-income workers, and create opportunities for employment and advancement. Legislation to eliminate discrimination must also be enforced when such employment and training programs are implemented. The Unemployed Despite canards about a link between indolence and poverty, most of the unemployed of working age cannot find jobs because of such factors as personal handicaps or a scarcity of jobs. Illness and family responsibilities are the main reasons why poor people do not work. In 1988, 11% of poor family heads did not work at all because they claimed to be ill or disabled. Another 39% were keeping house, unable to find work, or going to school. Children not only increase income requirements and the likelihood of poverty but also keep mothers from working and thereby limit available income. Two of every five female family heads cited home responsibilities as the obstacle to outside work. STRATEGIES FOR HELPING THE POOR Many basic needs of the poor cannot be filled simply by increasing their incomes. Young people and family heads require not only daily subsistence but also help in acquiring skills sought by employers. Medical care and nursing homes are key concerns for the aged. Children also require health care and education to assure them opportunities in the future. For all poor people, income support can be supplemented with direct provision of housing, medical services, food, and other goods and services. Since the \TNew Deal\t in the 1930s, the United States has developed an intricate series of programs to help the economically disadvantaged. The system is based on the assumption that special-purpose programs are necessary to cover the diverse needs of the poor. Although some programs address only one particular category of the poor, others overlap in their coverage. Four types of programs exist: cash support; direct provision of such necessities as food, shelter, and medical care; preventive and compensatory help for children and young people; and attempts to restructure existing institutions or to help the poor cope with their problems. Cash Support Income-support programs are the main form of assistance to the poor. Because poverty is usually defined as the lack of adequate income, cash subsidies attack it most directly. One problem with cash support is that payments to employable persons may diminish their incentive to work. Another problem is that income subsidies may not be used to provide basic sustenance as intended but may be spent on other things. Finally, public opinion plays a significant role. The public may agree to pay allowances to poor people who are attending school or training but not the idle poor. Cash-income support programs include \Tunemployment insurance\t; \Tworkers compensation\t; old age, survivors', and disability insurance; public assistance; and veterans' pensions. Due to public sentiment against income payments to employable persons, these programs aim primarily at persons outside the work force or those who cannot find employment. More comprehensive programs have also been proposed to distribute income subsidies based on need rather than on labor-force status. These programs include guaranteed income, a negative income tax, and family allowances. Direct Provision of Necessities Programs provide goods and services directly to the needy to supplement their cash income. Whatever the merits of helping the poor with cash or in-kind income, public attention must usually be focused on a specific problem in order to receive political attention. For example, increased food appropriations for the poor were forthcoming only after a highly publicized investigation of hunger in the United States in the late 1960s. Not only is in-kind aid more politically palatable, but the necessary goods and services sometimes are not available on the market, and direct provision is a more effective way of providing essential aid. Low-cost housing, for example, desperately needed to combat \Thomelessness\t, is not profitable to construct and will not be provided by the private sector of the economy without direct government action. Granting housing subsidies to the poor in the absence of an increase in an affordable housing supply might simply raise rents on existing units, as it did during the 1980s. In a few cases the government may be able to provide goods and services more efficiently than the private sector because of the savings that are inherent in such large-scale transactions. Services to Help Children and Youth Government offers other services not so much to alleviate the suffering of today's poor as to enhance the opportunities of their children to escape from poverty. Helping families to avoid having more children than they desire is one of the most productive ways of eliminating poverty. Proper care for mother and child is also extremely important, so that the young will be healthy. The federal government also provides some compensatory education from preschool to college for children of the poor. Restructuring Institutions Programs intended to restructure institutions or to improve the ability of the poor to work with existing institutions are meant to attack the causes of poverty rather than merely its symptoms. Such programs are generally aimed at offering more opportunities to the employable poor. The emphasis is on economic institutions, although the fact has been increasingly recognized that controlling noneconomic institutions, such as political parties and schools, is often a prerequisite to expanding economic opportunity. These programs fall into three groups. First, some programs seek to give the individual a competitive edge in the labor market through training, placement, and rehabilitation and through incentives to private employers to hire the disadvantaged. Second, some programs attempt to restructure the labor market by establishing a minimum wage, offering public employment, and combating discrimination. Third, other programs are designed to redevelop depressed urban and rural areas suffering from chronic unemployment. The various strategies for helping the poor complement each other. Not only must today's poverty be alleviated through cash and in-kind aid, but steps must be taken to reduce it in the future by better preparing young people and by giving the poor a better chance in the job market. Isolating the impact of these programs upon beneficiaries is not always easy. Birth control and maternal care, designed to give children a better start in life, also leave the mother in a better position to become economically self-sufficient or, at least, contribute to her own support. Similarly, the difference between cash subsidies and rehabilitative programs is often blurred: for instance, stipends are necessary for the poor if they are to complete an effective training program. THE SCALE OF ANTIPOVERTY EFFORTS In 1987, U.S. programs for the poor carried an estimated price tag of $165 billion, 13% of the federal budget and 7% of total state and local budgets. Exact measurement is difficult because many programs also serve the non-poor. In 1988 the federal government spent about $3,500 per poor person, while state and local governments spent an additional $1,350. Adjusted for inflation, the annual per capita federal outlay for the non-aged poor declined by more than a fifth between 1980 and 1988, from $2,300 to $1,800. The difference between the family income of the poor and the poverty line--the poverty gap--generally shows that poor families and unrelated individuals have become poorer since the 1970s. The poverty gap for 1988 was a near historic high of $1,400 per poor person. No generally accepted agreement exists about what percentage of gross national product or even of governmental expenditures should be allocated to the poor. The experience in other countries is not of much help, because needs and programs differ widely. A 1990 World Bank study on worldwide poverty provides some overall cause for optimism, however, predicting a decline in the percentage of the world's poor from 32.7% (1985) to 18% by the end of the 1990s (except in sub-Saharan Africa, where the numbers in poverty would likely persist at about the same level). Sar A. Levitan Bibliography: Danzinger, Sheldon H., and Weinberg, Daniel H., eds., Fighting Poverty (1986); Fitchen, Janet M., Poverty and Rural America (1981); Katz, Michael B., Shadow of the Poorhouse (1986) and The Undeserving Poor: From the War on Poverty to the War on Welfare (1990); Levitan, Sar A., Programs in Aid of the Poor, 6th ed. (1990); Levitan, Sar A., and Shapiro, Isaac, Working But Poor (1987); Millar, Jane, Poverty and the Lone-Parent Family (1989); Murray, Charles, Losing Ground: American Social Policy, 1950-1980 (1984); Pollard, Sidney, ed., Wealth and Poverty (1990); Richards, Eugene, and Bird, Christiana, Below the Line (1987). See also: \Temployment and unemployment\t; \THead Start\t; \Tpension\t; \Tsocial and welfare services\t; \TWar on Poverty\t.