174 Chapter 8
Poverty and Economic Inequality 175
1963 formula for poverty threshold based on 1960s distribution of income
Food 33%
All other expenses 67%
2000 estimates for distribution of income
17% Food
22% Child care
12%
All other expenses
8% Transportation
10% Taxes
22% 9%
Housing Health care
Based on Bernstein, Brocht, & Spade-Aguilar, 2000.
* All other expenses include telephone, clothing, school supplies, personal care supplies, entertainment.
FIGURE 8.1 |
involves a host of variables. For example, is a telephone a luxury or a necessity? If you have small children or are looking for a job, a phone will most likely feel very much like a necessity. For many parents, a portable cellular phone is a neces-sity. The knowledge that they can be reached at any time if an emergency should arise feels indispensable. If a cellular phone is a relative necessity, many people would define poverty as the lack of resources to acquire such a phone.
The poverty threshold has been used since the 1960s to measure the extent of poverty in the United States. The threshold has been changed only to reflect infla-tion and is adjusted for family size. However, it is not the standard used to deter-
mine eligibility for social welfare programs. Instead, the Department of Health and Human Services uses poverty guidelines. The poverty guidelines are issued each