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Poverty in America: An Overview on its Effects, Causes, and Measures Taken

Do you think poverty is something only happening in other countries?

Poverty is very much a problem here at home, and there are currently 26 million Americans living below the poverty line. Poverty is defined as having less than $22 per day to live on, affecting millions of families across America. In this article, you will learn about America’s Poverty rate and some Measures taken by the government.

Introduction to Poverty In the USA

Poverty can be defined in several ways. In general, we think about it using two measures: income and consumption. Average household income tells us how much money a typical household makes during an entire year. While it may seem simple enough, it isn’t straightforward. Many factors determine the amount of money a family makes, including inflation rates, taxes, and even national holidays.
One way to determine consumption is through measuring available income minus necessary expenses. This method takes everything a household spends and subtracts out all the costs of survival.

These include food, housing, transportation healthcare, healthcare, childcare, and work-related expenses. It doesn’t matter how big or small those monthly bills are; they all count toward your overall budget. Once you’ve determined your total income and subtracted out all the necessary expenses, you’ll find out how much leftover you have to spend on other necessities such as clothing, entertainment,
recreation, and debt payments.

How Does Income Affect Poverty Rates?

Income has a significant impact on poverty levels. A person who earns $30,000 annually is twice as likely to be considered impoverished as one earning $15,000.
However, income alone doesn’t tell the whole story, and it’s essential to look at income alongside other variables such as employment, wealth, assets, and debt. According to the U.S. Census Bureau, the median household income was $56,657 in 2017.

While this figure represents a slight increase since 2000, it still hasn’t recovered to pre-recession levels. In 2007, before the recession hit, the median household income stood at $58,017. Median household income does not necessarily mean that every family in a given area enjoys equal wealth. Some families make very little money, while others earn much more. It’s also important to consider how income relates to wealth. Wealth refers to total assets like savings accounts, stocks, real estate, cars, boats, and jewelry. These assets represent long-term investments rather than short-term needs, meaning they’re better able to withstand economic downturns.

For example, if you take home $50,000 per year, but your net worth is only $10,000, you have a negative net worth. This means that your wealth is less than what you earn each year. This is why it’s so important to save for retirement and college expenses, and these expenditures will help you achieve financial stability in the future.

It would help to compare household income against the federal government’s official poverty threshold. The threshold varies depending on whether or not you have dependents. If you have children under 18 living with you, you must add them to your calculations. The thresholds used by the U.S. Department of Health and Human Services range from $12,060 to $34,868. There are additional guidelines for non-coupled parents or guardians raising dependent children. Using these numbers, roughly 20 percent of American households fall below the poverty line.

How Poor Are America’s Poorest?

Poverty rates vary widely across the United States. More than 30 states had poverty rates under 10%, with Hawaii having the lowest rate, Alaska, and Oregon. On the other hand, 16 states had poverty rates greater than 20%, and Mississippi had the highest rate, followed by Louisiana and West Virginia.

poverty in America
Closeup of female hands counting a few money at night. Concept of financial difficulties, poverty, bankruptcy, taxes, and rent payment

What are the Causes of Poverty in America?

Many factors affect poverty levels within the United States. Government policies can play an important role, including minimum wage laws, welfare reform, and unemployment insurance. Other causes include poor education quality, lack of health care, homelessness, incarceration, domestic violence, crime, and discrimination.

A significant effect of poverty is decreased educational attainment. Children in poor households tend to perform worse academically than children raised in wealthier homes. They also have a lower life expectancy as adults and often experience mental illness or substance abuse problems.

Poor people are more likely to be unemployed. They’re less likely to own businesses and earn higher incomes when they start their own business. Many find themselves trapped in low-paying jobs without benefits.

What are the Effects of Poverty in the USA?

The effects of poverty differ depending on the individual. Some people choose to stay in poverty because they don’t believe better opportunities are elsewhere. Others get caught in cycles of poverty where they can’t break free because of various barriers. While many Americans struggle to make ends meet, some people thrive in poverty. These individuals typically live frugally, save money, and keep healthy diets. However, they need access to basic needs like safe housing, nutritious meals, and medical care to maintain good physical health.

Some people who experience poverty turn to drugs and alcohol for comfort. They often suffer from depression and anxiety disorders that lead them to self-medicate.
Some people become homeless due to financial struggles. Some cities require people to pay rent even though they cannot afford it. If they lose their job, they may not qualify for unemployment insurance, and others are forced into temporary lodgings at shelters or hotels.

How do U.S. Poverty Levels compare to Countries around the World?


In 2013, the United Nations released its annual report on global poverty. According to the U.N., about 800 million people live in absolute poverty, while another 2.5 billion live in relative poverty. Worldwide, about 1 billion people live in extreme poverty — less than two dollars a day. These numbers may seem high, but they reflect a significant improvement over previous years. According to the U.N. report, the number of people living in absolute poverty dropped by almost half between 1990 and 2012, although the rate of decrease slowed during that period. Despite these improvements, however, the United States remains far ahead of the world average. About 15% of Americans live in poverty, compared to 20% worldwide. However, according to the U.N., the proportion of people living in poverty in developing countries is higher than in developed countries.

The poorest countries in the world are all located in Africa: Lesotho, Malawi, Swaziland, Burundi, Rwanda, Chad, Mozambique, Zambia, and Zimbabwe. The percentage of people living in poverty ranges from 38% in Lesotho to 75% in Malawi.

What Can Be Done About Poverty in America?

Government policies can help reduce poverty. For instance, tax credits can reduce the amount of taxes paid by the working class. The Earned Income Tax Credit provides families meeting specific requirements with cash assistance. In addition, SNAP allows recipients to purchase groceries with government funds. There are also efforts being made to educate the public about poverty issues. For example, the National Center for Children in Poverty promotes awareness through partnerships with local organizations. It also runs programs such as “No Kid Hungry,” which seeks to increase food security among low-income families.
In addition, organizations like Food Runners provide emergency food relief to those experiencing hunger. Finally, the Department of Health and Human Services offers support to those struggling with addiction.


Poverty has significant impacts on all aspects of American society. When considering ways to improve the lives of impoverished people, we must first understand what drives poverty so that we can work to eliminate these factors. We should also recognize that poverty affects everyone, regardless of race, gender, ethnicity, or religion.



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