Bài giảng Economics of Social Issues - Chapter 7 Poverty and Discrimination: Why Are So Many Still Poor?

Chapter 7Poverty and Discrimination: Why Are So Many Still Poor?Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin7-2Poverty7-3What Is Poverty?7-4Criticisms of How Poverty Is MeasuredOmission of in-kind benefitsFood budget multiplierRegional differences in the cost of living7-5Who Are the Poor?Temporary versus Hardcore povertyFamily StructureAgeRace and EthnicityRegional differences7-6Household Income Inequality - 2007HouseholdsShare of IncomeIncome LimitMean IncomeLowest Fifth3.4%$11,551Second Fifth8.7% $20,291 $29,442Third Fifth14.8%$39,100$49,968Fourth Fifth23.4%$62,000$79,111Highest Fifth49.7%$100,000$167,971Median$50,233Mean$67,609Source: U.S. Bureau of the Census7-7Trends in Household Income InequalityShare of Household Income by QuintileHouseholds19701980199020002007Lowest Fifth4.14.23.83.63.4Second Fifth10.810.29.68.78.7Third Fifth17.416.815.914.614.8Fourth Fifth24.524.624.023.023.4Highest Fifth43.344.246.649.849.77-8Economic Causes of the Increase in InequalityDecline in well-paying manufacturing jobsDecline in unionization ratesDecline in real value of the minimum wageTax cuts7-9Determinants of Resource Prices and EmploymentLabor–person-hoursDDSSw0w1w2q0q1q2CapitalRental rateDDSSr0K0Rate7-10Determination of Individual or Family IncomeIncome = w * L + r * K7-11Determinants of Income DistributionIncome Differences due to Differences in Labor Resources and Their UseDifferences in Brawn and BrainsDifferences in the Capital Workers have to Work withDifferences in taste for leisureDifferences in Marginal Revenue Across FirmsCauses of Differences in Capital Resource OwnershipInheritanceLuckPropensities to Accumulate7-12The Effects of Discrimination on IncomeWhat is discrimination?Market discriminationPower to discriminateMonopoly power in product marketMonopsony power in factor marketExploitationDesire to discriminatePrejudice7-13Evidence of Discrimination in Our EconomyLegitimate Causes of Wage DifferentialsWage DiscriminationEmployment DiscriminationOccupational Discrimination7-14Government Attempts to Alleviate PovertyThe Old Federal Welfare SystemIncome Support – AFDC and SSIHealth Care Support - MedicaidFood and Nutrition Assistance – Food Stamps and School Lunch programHousing Assistance – Subsidies and VouchersOther Social Services Training and Employment7-15Problems with the Old Welfare SystemWork IncentivesFamily Structure IncentivesWelfare Dependency7-16 Adjusted Gross Income (AGI) - Exemptions - Deductions Taxable Income * tax rate Tax liability before credits - Credits Tax liability after creditsHow Tax Credits Work7-17Welfare Reform Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) – 1996“end welfare as we have known it”Income Support – TANFMedicaidFood StampsSSI and Other Social Services7-18Earned Income Tax CreditEarningsTax Credit$10,500$14,750$34,700$4,2007-19Negative Income Tax$ Income$ TaxLiabilityTaxes PaidSubsidy ReceivedGBIncome tax7-20What Can Be Done About Discrimination?Reduce Tastes for DiscriminationEducationLegislationEqual Pay Act of 1963Civil Rights Act of 1964Government SubsidiesReducing Market ImperfectionsReduce Discrimination in Development of Human CapitalReduce Occupational Segregation7-21CharacteristicPoverty RateAll People12.5Family StructureMarried-Couple4.9Female Householder, No Husband Present28.3Male Householder, No Wife Present13.6Poverty by Family Structure 20077-22CharacteristicPoverty RateAll People12.5AgeUnder 18 years18.018-64 years10.965 years and older9.7Poverty by Age 20077-23CharacteristicPoverty RateAll People12.5Race and EthnicityWhite10.5White, not Hispanic8.2Black24.5Asian10.2Hispanic origin21.5Poverty by Race and Ethnicity 20077-24Poverty by Family Structure, Race and Ethnicity 2007CharacteristicsPercentAll Family TypesAll9.8White5.9Black22.1Asian7.9Hispanic19.7Married CouplesAll3.2White4.5Black6.8Asian6.6Hispanic13.4Female Householders, No Husband PresentAll28.3White20.7Black37.3Asian16.1Hispanic38.4Male Householder, No Wife PresentAll13.6White10.3Black25.7Asian7.6Hispanic15.37-25CharacteristicPoverty RateAll People12.5Regional DifferencesNortheast11.4Midwest11.1South14.2West12.0Poverty by Region, 2007