Holt 7525-9 S15_IT

Poverty – a family whose income falls below a minimum necessary for an adequate standard of
living is classified as living in poverty.
The amount of income necessary for an adequate standard of living varies by household size. For
2013, the poverty line for a family of four was about $23,800, and the poverty line for a family of
three was about $18,600. Poverty rates vary based on certain characteristics. Poverty rates tend
to be higher for minority groups, single parent families, the young, and the poorly educated. The
table below illustrates some of these differences. The information is from the U.S. Census
Bureau, and is for 2013.
Group
Percent in Poverty
Total Population 14.5%
By Race/EthnicGroup
White 12.3%
Black 27.2%
Hispanic 23.5%
By Age
Under 18 years 19.9%
18 to 64years 13.6%
65 years and over 9.5%
ByType of Family
Married-couple 5.8%
Single-parent; male 15.9%
Single-parent; female 30.6%
High school dropouts have a poverty rate over 5 times as high as college graduates.
Poverty and Economic Mobility
As discussed earlier in this chapter, there is significant economic mobility in the U.S. economy.
The percentage of Americans living below the poverty line may change little from year to year, but
the actual persons who are living in poverty change.
Example 16: From 2009 to 2011, 31.6% of the population lived in poverty for a period lasting at
least two months. However, only 3.5% of the population lived in poverty during the entire 36
months. (Information is from the Census Bureau.)
Four Keys to Achieving Financial Security
The U.S. economy is the largest in the world. The standard of living is among the highest in the
world. Americans enjoy a relatively large amount of economic freedom and opportunity. Yet,
many Americans fail to achieve financial security.
Financial security means different things to different people. For a college student, financial
security might mean being able to pay one’s bills as they come due. For a person approaching
retirement age, financial security might mean having sufficient sources of income (investments,
pensions, etc.) to provide a comfortable lifestyle after retirement. Most people would like to
achieve financial security, but many do not. There are four keys to achieving financial security:
1. Believe that you can achieve financial security. Achieving financial security may not be
easy. A college student, saddled with large student loans and facing additional years of
education, may see no path to financial security. But it is possible even for a debt-burdened
college student to eventually achieve financial security. Any person who enjoys reasonably
good health and takes the necessary steps to achieve financial security can eventually
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31 - 9 Income Distribution and Redistribution