Poverty

Discussions of income inequality are often conducted in concert with discussions of poverty. But what is poverty, and who is poor? In a stratified system in which resources are unequally distributed, those having the least are the “poor.” But exactly how poor is defined is not as straightforward as it may seem. Poverty can be defined in absolute or relative terms.

In the United States, the Office of Management and Budget sets an absolute definition of poverty with a “poverty threshold” that is used to officially define who is poor. Those people living in families with an income below this poverty threshold are considered “poor” by the government definition.

These thresholds vary by family size and composition. However, they are not adjusted for variations in the cost of living across the nation. A snapshot of these poverty thresholds is shown in table 1.3. In 2003, the poverty threshold for a family of four (consisting of two adults and two children) was $18,660. By these official definitions, 35.8 million Americans (or 12.5 percent) lived in poverty in 2003

Family size	Threshold Amount
One person	9 573 $
Two Adults	12 321 $
One Parent, Two Children	14 824 $
Two Parent, Two Children	18 660 $

Table 1.3 – Poverty Thresholds by Family Size, 2003

Most people define poverty in nonnumerical terms based on their personal circumstances. They are using a relative definition of poverty, measuring it on the basis of whether their basic needs and wants are met. They are poor by their own understanding of the term as subjectively determined by such things as whether they have enough food to eat, clothes to wear, or money to buy necessities (e.g., baby diapers).

Cost of being poor

Research has documented a number of hidden costs of being poor. The poor pay more for many items. Among these costs, rent-to-own arrangements are often available to the poor when other stores will not extend credit. These rent-to-own stores may charge lower payments for items, but they have longer contracts. They may also be able to avoid legal problems from charging high interest rates by replacing them with other fees and charges. Additionally, defaults and repossessions are common, and money invested by the poor is forfeited.

Costs are also more than financial. The poor face a bigger time squeeze than the affluent. They face trade-offs in demands between work and family life. This dilemma includes time to monitor their children’s educational needs (e.g., supervised study time), which can have long-term consequences for children, especially in the context of increasing emphasis on standardized academic testing in schools.

Role of race and sex in poverty

Income and poverty are unequally distributed by such factors as race and sex. Not all groups have an equivalent chance of being poor. As shown in table 1.4, the median household income varies by race and ethnic background. The median income for black and Hispanic households is lower than the median income for white and Asian households. Racial and ethnic minorities are also disproportionately poor. Table 1.5 provides poverty rate by race/ethnicity. The poverty rates for blacks and Hispanics is more than double the rate for whites and Asians. However, the economic success of Asians in the aggregate (due in part to cultural values emphasizing educational achievement and family and community support) can obscure the situation of those who have limited economic resources and face discrimination.

Race Median Income Asians 55 699 $ Black 29 645 $ Hispanic 32 917 $ White 45 631 $ Table 1.4 – Median houshold income

Race % bellow poverty level Asians 11,5% Black 24,4% Hispanic 22,5% White 10,5% Table 1.5 – Poverty rates by Race

Income and poverty are also unequally distributed between males and females. In 2003, women in the United States earned 80 cents for every dollar earned by men. That was a record earning ratio. Even women in high-status positions earn less than their male counterparts. Recent decades have seen a feminization of poverty, an increase in the proportion of the poor who are women. Increasing divorce rates and single- parent families headed by women trying to care for children and support them on lower incomes than men have contributed to this trend.

Sources of stratification

Two of the major questions sociologists studying stratification have tried to answer is why stratification exists and if it is inevitable. Sociologists working from the two major macro-theoretical perspectives provide varying responses.

Structural-Functionalist Perspective

Inequality serves a social function. To operate smoothly, societies face a “motivational problem” in ensuring that the best, most qualified people fill the most important roles in society. (what is the problem?) This idea disregards the impact of social factors such as discrimination that are outside of individual control. It does not give appropriate attention to the tensions and divisiveness that can arise as a result of inequality.

Critiques of Structural Functionalist Perspective

Someone born into privilege has not “earned” that position through his/her own efforts. Another factor that the perspective disregards is the ability of those with higher status to use their position and contacts to secure and further improve their own positions and resources. This includes politicians and corporate executives, who can often enact their own pay raises. Critics also argue that the most highly rewarded positions (e.g., entertainers and sports figures that earn millions annually) do not always fill the most important roles in society. Do we really need stratification and how much inequality is actually necessary?