Poverty and Social Security System In the United States
?????/span>(stella) Student ID :s06144
Economic Law School
Paper Supervisor : Dr. Sekou Conde
Minzhu University of China
2006-2007 Academic Year
Abstract
Few problems in history have ever been studied as much as poverty, which exists in all countries, be they rich or poor. Although the United States is called the richest country in the world, it makes no exception. Nearly one out of every eight Americans, according to an estimate, is poor. The concern of American government and people over the problem of poverty has become acute in the past several decades, and as the largest anti-poverty program, American social security system, since its establishment, has stirred up plenty of controversy.
This paper endeavors to examine the extent of poverty in the United States, its causes and consequences. It concludes that some Americans are much more likely to suffer poverty and their poverty may be attributed to both behavioral and structural factors. The paper also tries to discuss the anti-poverty program, evaluate the effects of it on poverty relief analyzing the factors that have hindered the efficiency of it. When problems arise, solutions come accordingly. Therefore, in the final part of the paper the thesis takes an in-depth look at the major reform programs on anti-poverty program. It is hoped that from this study of American poverty and anti-poverty studies, people can gain more insight into American way of living and American policy.
Key words: poverty, anti-poverty, social security
The world, at the beginning of the twenty-first century, is facing various challenges. Among them, poverty has been the continuous concern of many international organizations and countries. Although the United States is called the richest country on earth, poverty exists in it. It has long been known that even at the most prosperous periods there have been people without enough to eat, and that the social security system was not enough to cure the evils of poverty.
The number of poor Americans is enormous. Each year since the mid-1960s the federal government has attempted to identify those Americans living in poverty. According to the latest available figures, there were nearly 37.0 million poor persons living in the U.S. in 2005, some 12.6 percent of the population.[1]
Poverty may well become America’s most serious and costly social problem. Given the size, cost and consequences of poverty, America has a substantial stake in preventing this condition and in helping as many of the poor as possible to become self-reliant, secure and economically productive. The cost of services to the poor is staggering. Considering only the major welfare programs (e.g., Temporary Assistance to Needy Families, Food Stamps, Medicaid, Supplemental Security Income), expenditures at the state and federal levels substantially exceed $300 billion a year.
Major government efforts to assist the poor grew out of the New Deal Legislation of the 1930s, and these programs have evolved and grown substantially over time. As welfare programs and expenditure have grown, skepticism about the cost and effectiveness of these programs has become increasingly widespread within and outside of the government. Taking inflation into consideration, expenditures for welfare programs increased by 400 percent between 1935 and 1996. During this same period, the American population grew by only 32 percent. Despite major increases in expenditures, poverty rates increased during the 1980s and most of the 1990s. In the last two decades, over 90 percent of those families receiving cash assistance lived in poverty. Despite all these growing expenditures, America's major welfare programs were actually not designed to reduce poverty. This being the case, only rarely have America's complicated and increasingly expensive programs helped the poor go off welfare and become economically reliant and secure.
To confront with the public skepticism about the design, expense, and effectiveness of American welfare programs, Presidents Nixon, Ford, and Carter recommended major welfare reforms to Congress. However, none of these reforms were passed. Presidents Reagan and Bush also recommenced reforms. On May 2, 2001 President Bush announced the appointment of his Social Security Commission, the "President's Commission to Strengthen Social Security." The Commission issued its final report in December 2001“Strengthening Social Security and Creating Personal Wealth for All Americans”, the Final Report of the President's Commission to Strengthen Social Security --- released on December 21, 2001. This document includes all appendices and Estimates of Financial Effects for Three Models Developed by the President's Commission to Strengthen Social Security. This can be recognized as a milestone on the way to perfect Social Security System.
This paper begins with the brief description of American poverty. This is followed by a survey of American poverty population, namely “who are the poor” in terms of race, age, nativity, region and family structure. Then it moves on to the causes of poverty, which falls into three aspects: lack of economic opportunity; behavioral poverty and inability. Here also summarizes the consequences of poverty. The following part focuses on American Social Security System --- the nation’s biggest weapon against poverty. Firstly the paper reviews its history and development from the original Social Security Act of 1935. Then, the paper turns to the effects of the Social Security System on ameliorating poverty. Although it does play an undeniable role in aiding the poor, the present system has numerous shortcomings. The last part of this chapter will not only address these shortcomings, but also examine the major reforms in contemporary American history, trying to assess the effects of the reforms.
I. Poverty in the United States
A. American poverty population
America’s poor, at least those identified by the federal government, are a very diverse lot. The poverty population consists of both the young and the old, families with one or sometimes even both parents in the workforce, families with no employed adults, single mothers and their children, street people, residents of rural areas; along with people who live in impoverished areas of inner cities. As we will see, the poverty population is both heterogeneous and complex.
Highlights[2]
• The official poverty rate in 2005 was 12.6 percent, not statistically different from 2004 (Table 1).
• In 2005, 37.0 million people were in poverty, not statistically different from 2004.
• Poverty rates remained statistically unchanged for Blacks (24.9 percent) and Hispanics (21.8 percent) between 2004 and 2005. The poverty rate decreased for non-Hispanic Whites (8.3 percent in2005, down from 8.7 percent in 2004).
• After 4 years of consecutive increases, the poverty rate stabilized at 12.6 percent in 2005—higher than the most recent low of 11.3 percent in 2000 and lower than the rate in 1959 (22.4 percent), the first year for which poverty estimates are available (Figure 1)
• The poverty rate in 2005 for children under 18 (17.6 percent) remained higher than that of 18-to-64-year-olds (11.1 percent) and that of people 65 and older (10.1 percent)—all were not statistically different from 2004.
• In 2005, the number in poverty remained statistically unchanged from 2004 for people under 18 and people 18 to 64 years old (12.9 million and 20.5 million, respectively). The number in poverty increased for seniors 65 and older—3.6 million in 2005, up from 3.5 million in 2004. (Tables 1 present the number in poverty and poverty rates in 2004 and 2005 by such selected characteristics as race, age, nativity, region, families and so on, and show which groups had statistically significant changes.)
Table 1
People and Families in Poverty by Selected Characteristics: 2004 and
Some Americans are much more likely to suffer poverty. As Table 1 illustrates, minorities suffer particularly high rates of poverty, as do single-parent families and children in those families. Almost 40 percent of all the poor are children, a problem that in significant measure is related to the very high poverty rate for single-parent families and, the low wage rate of many young, employed family heads. While the poverty rate for Americans 65 and older has declined significantly over the last forty years, individuals sixty-five and older constitute over 9 percent of the poor. Clearly, the Southern cities with their large Black people and Mexican-American populations and high level of racial discrimination have the highest levels of poverty. Although most poor people live in cities, the incidence of poverty is higher on farms and in rural areas. The highest levels of poverty exist in the Southeastern and Southwestern states, but the problem is growing rapidly in the Midwest. Poverty, in the final analysis, is a condition that impacts America's most vulnerable citizens --- minorities, members of single-parent families, children, and the aged and poorly educated young couples with children.
B. The causes of American poverty
When all the various types of people who are poor are examined, it becomes obvious that poverty is not a single problem, but rather a series of problems that affect diverse groups. Several factors may cause people to have poverty levels of income at any time.
Lack of Economic Opportunity[3]
First, there is the obvious matter of not having a job that provides an income sufficient to raise someone above the poverty level. An individual may not be able to find a job. Here, unemployment is the crucial factor; A job is available but it is only part time and the person would like [...]
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