Many efforts to alleviate poverty rely on a disparate collection of approaches, including advocacy, education, community service, government intervention, charity or direct service, and social work. Recent debates have focused on the need for coordinated policies that address both “inequality poverty “income poverty.” This article examines the differences between these concepts, which has implications for poverty reduction.
In today’s economy, many people are struggling to make ends meet. Some have lost their jobs; others have lost their homes or have had to move to less than desirable neighborhoods or towns in order to make ends meet. Most people who are experiencing either or both of these circumstances are considered to be “inequality poverty.” Many people experience income poverty because they work for wages that don’t provide them with enough money to survive on. Others are at risk of income poverty because of the circumstances that they were born into, their race, gender, ethnicity, or other characteristics that may affect their ability to obtain or maintain employment.
The term “income poverty,” however, has a more complex definition. While some people may not have access to adequate income to meet their basic needs, they may still be considered to be in poverty. People who do not have a regular source of income, but are capable of maintaining a minimum standard of living, are considered to be “qualifying.” Those who experience extreme financial hardship, including situations where they cannot afford the bare essentials of life, are defined as “severely impoverished.” Those who are not adequately provided for are considered to be “substandard.”
There are different ways to measure the federal poverty level, and the numbers used depend on the state and county where a person lives. The most commonly used figures are based on three different household income levels: the poverty line, the supplemental poverty line, and the official poverty line. These are used as guides for setting federal assistance programs. However, these federal poverty level figures do not take into consideration any factor that can lead to an under-reporting of income by low-income households. For example, a person’s age, health status, or race can all have an effect on the poverty rate of a household.
To reduce the number of under-reporting of income among low-income households, the Bureau of Labor Statistics (BLS) publishes information about its own poverty level statistics. These reports are made available online and in the Federal Register. These reports can be accessed by interested parties who wish to request the figures needed for research, but the cost associated with this information is quite expensive.
A better way to determine the federal poverty level is to look at the percentage of non-poor families at the four different income categories: low income, moderate income, middle income, high income, and wealthy. This figure is often referred to as the official poverty rate. When the official poverty rate is calculated, it is used to set federal poverty guidelines for family assistance programs and can be used for policy analysis, research, monitoring, and benchmarking purposes. Using the official poverty rate can also help families determine whether they are at risk of being classified as poor or affluent.
While the official poverty level is often used for policy purposes, the supplemental poverty level is used for financial planning purposes. By using the supplemental poverty level, it is possible to determine the amount of financial assistance that a family would receive if it had a certain level of income that is above the poverty line, which may be lower than the official level. A family who is above the official poverty level may qualify for various programs that aid families who fall below the official poverty level.
Families are not only defined as poor or affluent depending on their income level. Income is also taken into account. For example, a person may be deemed poor if he or she receives social security benefits and the equivalent of income tax credits from the Internal Revenue Service. A person may also be deemed as wealthy if he or she receives Social Security benefits but does not pay taxes on it.