Americans in Poverty Level and

Americans in Poverty Level and on Minimum Wage Abstract recent population survey by the U.S. Census Bureau said that America's poor have significantly risen to 37 million, 13 million of whom are children. Records show that child poverty in America is significantly higher than that in other major Western countries. With a 12.7% population increase rate, 7 million additional poor will burden the economy and country. The present threshold of poverty is $18,850 for a family of four. That family needs to earn $40,000 per year to remain above the threshold.

An increase in the minimum wage from the present $5.15 to $6.65 is seen to both benefit and disadvantage workers and the economy. Its opponents say that it would help only a few and would make work more difficult and scarce for the working poor. Its advocates offer evidence that will benefit working families and disadvantaged workers and is part of an overall strategy to fight and end poverty. According to the 2005 population survey conducted by the U.S.

Census Bureau, the number of Americans living in poverty has substantially risen to 37 million in recent years or almost one in every eight persons (Office of Social Justice St. Paul and Minneapolis 2006). The 12.7% population increase meant an additional 7 million Americans falling into poverty since 2000. Of these figures, 13 million were children living in poverty in 2004 at a rate of 17.8%, which was significantly higher than that of population as a whole.

Child poverty has also been twice or thrice higher than that in most other major Western industrialized countries where 2,019 American babies are born in poverty. Current statistics say that one in five children is poor in his or her first three years of life, the time when brain development is greatest. Furthermore, each child is born without health insurance every minute. And according to the National Center for Children in Poverty, the poverty rate for children is significantly higher by approximately 50% than for other age groups (OSJSPM).

The official federal poverty threshold was established at $18,850 for a family of four, based on a standard set by the Bureau of Census on money incomes, which varied by family size and composition in determining who were poor (Office of Social Justice St. Paul and Minneapolis 2006). Poverty is defined according to money income before taxes and excludes capital gains and non-cash benefits. The common assumption for most Americans is that a family of four requires $40,000 yearly to adequately house, clothe and feed itself.

Poverty USA survey said that 40% of the poor in America live in the central cities and 36% in the suburbs. It also said that almost 40% of these poor over the age of 16 worked full or part-time but could not earn enough to afford the bare necessities of life. Every year that 14.5 children continued to experience poverty meant that their lifetime contribution to the economy would result in a decline by around $130 billion because these poor children would receive less education and thus become less productive workers in later years (OSJSPN).

In addressing the problem, an increase in the minimum wage from the current $5.15 to $6.65 per hour was suggested to Congress but it is believed that such an increase would do little to improve the conditions of poor Americans (Kersey 2004). Few of those who would benefit from it were members of poor families and would only eliminate entry-level jobs for unskilled workers and make it more difficult for those who would seek jobs.

An increase in the minimum wage would make low-wage jobs scarce and thus deprive the working poor with more work. A suggested analysis of the 2003 U.S. Census data revealed that only 15% or 7.8 million minimum wage-earners would benefit, while 72% had higher family incomes, which were at least 50% higher than the poverty line.

The typical recipient of a raised minimum wage would not be a poor father or mother, struggling to keep a family alive, housed and clothed, but would be more likely to be a solid member of the middle class. The analysis further stated that less than a quarter of those affected by the proposed new minimum wage worked full time and would not be higher for poor families. Heritage scholars Robert Rector and Rea Hederman found that only a little more than one quarter worked for 2,000 hours or more.

They suggested that poverty in America was less of a material deprivation and more of emotional and spiritual loss, the awareness or knowledge of one's dependence on state and federal bureaucrats and a loss of self-esteem resulting from the knowledge of self-insufficiency. The working poor, on the other hand, are capable of facing their future with optimism and confidence, no matter how little they earned. It was the control they had over their lives, which translated into their contribution to the economy (Kersey).

An opposing view was suggested, wherein an increase in the minimum wage would benefit low-income workers, in general, and those below the official poverty line, in particular (Economy Policy Institute 2006). If and when the proposed minimum wage increase was approved, the wages of approximately 7.3% would go up from $5.15 to $7.25 by June next year. It would benefit working families and disadvantaged workers. The 1996-1997 minimum wage increase figures showed that the average minimum wage worker brought home more than half of his or her family's weekly earnings.

Adult workers aged 20 and older would stand most to benefit from an increase to $7.25 at 72% in June next year with almost half of them working full time and 34.5% of those working between 20 and 34 hours a week. It would also benefit disadvantaged workers, such as women, at 60.6% from an increase to $7.2 in June 2007. Another disadvantaged group would be the minorities, such as African-Americans at 11.1% and 13.4% Hispanic.

But the opinion was that the majority of the benefits at 58.5% would go to families with working, prime-aged adults at the bottom 40% of the income distribution. Most importantly, a minimum wage increase is part of an overall strategy to end poverty, along with the federal Earned Income Tax Credit. A single mother of two who worked 40 hours a week throughout the year and received a minimum wage would have earned $9,893 and became eligible for the maximum tax credit of $3,656, bringing her income to $13,549 or only 5% over the 1997 poverty threshold.

But because the current minimum wage has not kept up with increased cost of living, the same family receiving it would now fall below the poverty line. $5.15 today is equivalent to only $4.23 in 1995 or lower than the $4.25 minimum wage.