Sociology

Sociology

Understand the Causes & Consequences of Poverty

The overall poverty rate in the US rose to 13.2 percent in 2008, as workers across all sectors of the economy became jobless and increasing numbers of families were forced into destitution, according to a new government report. Real median household income also declined by 3.6 percent.

In a report released in 2008, part of the US Census Bureau's American Community Survey, is the most recent to measure the recession's impact on working class families and the poor. Based on the changes between 2007 and 2008, the first full year of the recession, its findings do not reflect increases in poverty and joblessness this year as the consequences of the crisis have become even more acute.

The official poverty rate of 13.2 percent in 2008 was up from 12.5 percent in 2007. This figure translates into 39.8 million people in poverty across America. The official poverty level is set at $22,000 annually for a family of four with two children or $12,000 for an individual, an absurdly low threshold. This means that far more people than indicated by the survey do not have adequate resources to pay for food, shelter, medical care and other basic necessities.

The poverty rate rose across virtually all demographic groups. Poverty among Hispanics climbed from 21.5 percent in 2007 to 23.2 percent in 2008. Non-Hispanic whites saw poverty rise from 8.2 percent in 2007 to 8.6 percent in 2008, while poverty among Asians was up from 10.2 percent in 2007 to 11.8 percent in 2008. African-Americans were the only group where poverty remained statistically unchanged at a staggering 24.7 percent, or about one in four people.

Comparison: California and Florida

The Census Bureau reported a rise in poverty in 31 states and the District of Columbia. Two of the four most populous states—California and Florida—saw poverty rates rise by 1 percent, to just over 13 percent in each state.

Connecticut saw the largest increase in poverty, rising to 9.3 percent, with an additional 1.4 percent of the state's population living in poverty. Connecticut's proximity to Wall Street, the center of the financial collapse, contributed to the state's poverty as spending cuts by bankers and other financial employees in the New York City suburbs were reflected in declines in income for the lowest paid workers.

William Frey, a demographer at the Brookings Institution, commented in an interview, “People don't go from being a CEO or a hedge fund ...