Poverty in The United States - Factors in Poverty

Factors in Poverty

There are numerous factors related to poverty in the United States.

• Income has a high correlation with educational levels. In 2007, the median earnings of household headed by individuals with less than a 9th grade education was $20,805 while households headed by high school graduates earned $40,456, households headed holders of bachelor’s degree earned $77,605, and families headed by individuals with professional degrees earned $100,000.

• In many cases poverty is caused by job loss. In 2007, the poverty rate was 21.5% for individuals who were unemployed, but only 2.5% for individuals who were employed full time.

• In 1991, 8.3% of children in two-parent families were likely to live in poverty; 19.6% of children lived with father in single parent family; and 47.1% in single parent family headed by mother.

• Income levels vary with age. For example, the median 2009 income for households headed by individuals age 15–24 was only $30,750, but increased to $50,188 for household headed by individuals age 25–34 and $61,083 for household headed by individuals 35–44. Although the reasons are unclear, work experience and additional education may be factors.

• Income levels vary along racial/ethnic lines: 21% of all children in the United States live in poverty, about 46% of black children and 40% of Latino children live in poverty. The poverty rate is 9.9% for black married couples and only 30% of black children are born to married couples (see Marriage below). In 2007,11% of black women aged 30–44 without a high school diploma had a working spouse. The poverty rate for native born and naturalized whites is identical (9.6%). On the other hand, the poverty rate for naturalized blacks is 11.8% compared to 25.1% for native born blacks suggesting race alone does not explain income disparity. Not all minorities have low incomes. Asian families have higher incomes than all other ethnic groups. For example, the 2005 median income of Asian families was $68,957 compared to the median income of white families of $59,124. Asians, however, report discrimination occurrences more frequently than blacks. Specifically, 31% of Asians reported employment discrimination compared to 26% of blacks in 2005.

• The relationship between tax rates and poverty is disputed. A study comparing high tax Scandinavian countries with the U. S. suggests high tax rates are inversely correlated with poverty rates. The poverty rate, however, is low in some low tax countries such as Switzerland. A comparison of poverty rates between states reveals that some low tax states have low poverty rates. For example, New Hampshire has the lowest poverty rate of any state in the U. S., and has very low taxes (46th among all states).It is true however that in those instances, both Switzerland and New Hampshire have a very high household income and other measures to levy or offset the lack of taxation. For example, Switzerland has Universal Healthcare and a free system of education for children as young as four years old. New Hampshire has no state income tax or sales tax, but does have the nation's highest property taxes.

• The conservative Heritage Foundation speculates that illegal immigration increases job competition among low wage earners, both native and foreign born. Additionally many first generation immigrants, namely those without a high school diploma, are also living in poverty themselves.