It may surprise many to learn the US, known as the land of opportunities, is facing a major crisis the number of people below the poverty line on the increase. Though the definition of poverty varies with states and local legislation, it implies the purchasing power of individual with respect to standard of living in any nation. An individual is said to be living in poverty when the state considers him incapable of living comfortably according to his income.

Now, ‘incapable of living comfortably’ is too ambiguous a term to define poverty.  Poverty needs to be defined in a better manner for its decisive estimation. So, the US puts in place a ‘poverty threshold’ which, if not attained by an individual or a family, is labeled as poor.  Now, as the definition requires that the purchasing power of the individual is not sufficient to provide a good standard of living, poverty is also calculated on that specific value. This value varies, depending on whether we are taking into consideration the earnings of an individual or the complete household plus the size of the household.  This is how the census bureau defined basic threshold during 2008. The figures here indicate the pretax earnings from all sources:

Single Individual Under 65 USD 11,201
Over 65 USD 10,326
Single Parent One Child USD 14,840
Two Children USD 17,346
Two Adults No Children USD 14,417
One Child USD 17,330
Two Children USD 21,834
Three Children USD 25,694USD


Based on the above parameters, the current situation is somewhat like this:

  • The projected level of poverty is about 13.2%.
  • On reviewing the data of past years, we realize it is a cyclical trend with fluctuations from 13 to 17 percent.
  • The chief cause is unemployment as majority of employed people have a good standard of living. This is substantiated by the fact that of the people who have full time jobs just 2.5% are poor.
  • The poverty rate is the highest among African Americans plus Hispanic community, as 24.7% and 23.2% from each community are reportedly living in poverty.
    Another major reason is absence or inadequacy of education. The lowest earning at less than $1665 is of dropouts from high school.
  • Relative poverty, defined as having significantly lower access to income and wealth is too high in the US. Basically, it signifies that there is a very large gap in the income of the rich and the poor.

Causes of Bad Economy

There are many reasons for poverty, but we need to find more strength and resources to end poverty. The most significant factor contributing to poverty is unemployment and job cuts. When a person loses job, the main source of income is gone. Equally significant reason is inadequate or no education at all.  If children are not given education, there will be a continued increase in the number of school dropouts. That adds to the problem of unemployment as uneducated population can’t be employed gainfully.  The gap in earnings of the professionals and dropouts is too wide, thus demonstrating how vital education is for removing poverty.

An increasing number of people are beginning to realize that provision of food and healthcare alone can’t suffice to eliminate poverty.  It is the quality of education coupled with increased opportunities of employment that can help reducing poverty in the US.