This week we are discussing concepts of poverty.
Our discussion is based on this week’s reading: Sen, Amartya. 1981. “Chapter 2: Concepts of Poverty” In: Poverty and Famines: An Essay on Entitlement and Deprivation. Oxford: Clarendon Press.
Carefully go over my PowerPoint presentation with voiceover where I explain important ideas and concepts covered in the readings. (To listen to the voiceover you need to go to presentation mode)
Read THIS brochure from the world bank where they explain the fundamentals of Purchasing Power Parity (PPP)
Read THIS two-page PDF that summarizes the story of the creation of the U.S. poverty line and addresses some of its weaknesses
Watch the short video below:
Lecture Posts Questions:
On the comments section below, address the following questions (answers should be at least 100 words in length and posted by Sunday – This is how participation points are assessed (worth 30% of your final grade!) Please save your comments in a safe document before attempting to post it.
- From my PowerPoint presentation, what isn’t clear? Any thoughts or comments you would like to share?
- From the reading, what is not clear? Any thoughts or comments you would like to share?
- What is PPP? Why do researchers use PPP instead of exchange rates for international comparisons?
- Summarize the story of the U.S. poverty line and some of the main criticisms. What did you think of this reading (the two-page PDF)?
- Summarize the main issues addressed in the video
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In the chapter about concepts of poverty, Amartya Sen discusses the different definitions of poverty and where exactly do we draw the line when measuring poverty. I think this concept is interesting because the measurement of poverty seems ambiguous. There really is no clear answer, and it depends on how we’re measuring and defining poverty, and what counts as poverty and deprivation. For example, there is absolute deprivation, which is when a family is unable to sustain basic necessities of life, whereas relative deprivation is feeling poor compared to others in society. It also depends on the economic development of a country and what they consider poverty or deprivation, and what are the standards of necessities. In both the powerpoint and the article, I found the concept of ‘head-count measure’ still unclear and confusing.
The PPP as it states in the brochure is the measure of the total amount of goods that a unit of one country’s currency can buy in another country. They make the purchasing power of currencies equal because some countries have a lower price level and goods than others. It controls for these differences in prices levels between countries, which is why researchers prefer PPP’s instead of exchange rates for international comparisons.
The pdf that discusses the U.S. poverty line and its criticisms is very interesting as I also learned this recently in another course I took. The poverty line was set by Mollie Orshansky decades ago, and to this day it is still being used despite how times, policies, trends, and the difference of poverty across the population have changed. It was never revised, and was only adjusted for inflation. Ideally, the poverty line should be revised and recalculated to reflect the living standards in the U.S. The poverty line should have increased if it was actually accurate. It doesn’t take into account how different populations have different insurance coverages and medical care costs, how there is an increase in mothers in the workforce who must pay for child care, the different costs of living in different geographical areas in the U.S., and so on.
In the video, it explains how President Johnson declared war on poverty and created social programs to improve workers lives and the economy. However, poverty is still high even today. In the 1970s, the economy generated more poverty and the elite gained most of the benefits. Workers did not have higher wages adjusted for inflation even though the economy is much larger and richer. Economic growth doesn’t trickle down to the poor because of economic changes such as globalization, outsourcing, new technologies, etc. Some U.S. government policies have also changed which negatively affected workers. Some examples are the failure to increase minimum wage, keeping pace with inflation, and difficulty for unions to organize compared to other countries. Other countries have changed their policies, which benefited their workers and their incomes, which is why the U.S. has more poverty compared to those countries. To reduce poverty in the U.S., more must be done to increase employment and earnings of the poor, minimum wage should be higher, more must be done for people to receive a college degree, etc.
I found the PowerPoint presentation to be very clear and I particularly liked the inclusion of charts, graphs and photos to better explain poverty measures. The PowerPoint directly relates to the information provided in the PPP brochure as well as the readings.
The PPP brochure explains what Purchasing Power Parties is shows how PPP’s measure the total amount of goods and services that a single unit of a country’s currency can buy in another country. The brochure breaks down the large differences in price levels across economies. It even explained how 50 US dollars would be able to buy a large amount of goods in South Africa than it’ll be able to buy in the US. PPP’s allow us to compare the output of economies and the welfare of its people in realistic terms, therefore controlling for price level differences across countries.
The story of ‘The Great Escape’ touches on poverty lines in the United States over the years. According to the reading, the US poverty line was set in 1963 by Mollie Orshansky. Mollie calculated how much a family, or two adults and two children would have to spend in order to get by. She then took that and multiplied it by three to come up with how much a typical family spent of its income on food. It was outrageous to me to find that the average amount at the time was about $3,165! That’s barely even enough for rent these days. Mollie’s poverty line was criticized by many because it became far less convenient in the later years (surprise, surprise!).
In the video, we learn about how President Johnson declared war on poverty in 1964. Still, many argue that the war on poverty is still not over. This is because we still fail to increase the minimum wage and can’t seem to get it together enough to organize better policies and benefits for workers and raise wages. I still don’t understand how the US is considered a “superpower” country when we can’t even organize basic unions in comparison to other countries, particularly those in Europe. 50 years ago, President Johnson recognized that we needed to reduce poverty by offering a growing economy and larger government safety net. We have to do more to raise the employment and earnings of the poor by raising the minimum wage.
On the lesson PowerPoint, I found it interesting that there were ways of approaching and requirements for poverty. A few ways for poverty to happen we need to identify the who and aggregation, which is the who. Approaching the concept of poverty illustrates 2 approaches the Biological approach and the Inequality approach. The biological approach gave me something to think about from individuals not maximizing their nutrition but buying better-tasting food. A way to measure poverty is using absolute and relative poverty. It is difficult to measure which population is in poverty because there is a sense of inequality. Countries that use the headcount method to find the poor population have their drawbacks mainly because inequality is unaccounted for.
In Chapter 2: Concepts of Poverty Sen explains the problems of idealizing and measuring poverty. When Sen describes the different methods of data gathering of the poor, he talks about the problem aggregation. He states the problem of, “the description of the poor to some over-all measure of ‘poverty ‘as such” (p. 10). It is interesting on the diverse ways to measure and calculate what would be considered poverty in societies. He even mentions some societies counting the poor compared to the number of people. This method is called the “head-count measure,” which he discredits. Sen adds two drawbacks one of which is it excludes the poor population’s income. The second is it negatively impacts the incomes of the poor without affecting the incomes of the rich, which leaves the head-count measure fixed. I see this now where poverty is a constant issue, and it seems measuring poverty is one of the issues as well.
The acronym PPP stands for Purchasing Power Parties. The definition of PPP, as stated on the brochure, is the total amount of goods and services that a single unit of a country’s currency can buy in another country. Researchers use PPP mainly because exchange rates that are converted to GDP do not accurately measure the comparable sizes of economies and the levels of material well-being. PPPs allow the comparison of the overall economies and the welfare of their individuals. So, PPPs help controls the price differentials in different countries. Thus, researchers use PPP’s instead of exchange rates is to give a level of fairness in different economies.
The story of the U.S Poverty line speaks of the creation of the poverty line in 1963-64. The story begins by talking about Mollie Orshansky and how she calculated the poverty line. In the end, Orshansky produces 3,000 dollars to be the poverty line. Deaton explains how the measure does not account for different family types since Orshansky originally produced $3000 from a family of 4. The author concludes that since the beginning, poverty measures have had drawbacks and as the American economy progresses it becomes more apparent. Some problems addressed by Deaton include the current measure does not differentiate the demands of workers and nonworkers. Another problem is differences in the welfare of individuals. Everyone faces different health problems, but the current measure does not take responsibility for them. I found it interesting how the author demands a revision in the poverty line. As well as describing various methods of measuring poverty. These problems are still relevant today where health insurance is not guaranteed for everyone’s needs. Thus, it leads to individuals and families with debts and financial hardships. We Americans need to be informed of how our economy is built upon, especially poverty.
In the video called “U.S. Poverty in Perspective: Sheldon Danziger” speaker, Sheldon Danziger explains the problems of government programs on poverty. He addresses that even though many programs help the poor, poverty remains the most significant issue in America. The main problem is the change in America’s economy in the past five decades. Danziger explains the origin of government programs that were supposed to reduce poverty. As time went on the rich received more benefits than the poor.
Danziger adds a comparison between the United States and European countries. The graph illustrates the Percentage of living in Poor households with the blue line representing market income and the red line representing the after-tax income. The U.S has the highest after-tax income compared to the European countries. This low disposable income from these countries is the help of higher wages and more benefits for the unemployed and the poor. America’s poverty problem is within its economy. We should be focusing on how we will help the unemployed get employed and increasing the minimum wage to reduce poverty.
1. Everything is clear. I thought it was interesting that although other countries have switched to an inequality approach to poverty, the U.S. has remained in use of the biological approach. Is there a reason for this?
2. In the “Material Well-Being,” I was surprised to read that the value of the 1963 poverty line was changed from above 4,000 to close to 3,000 and even more surprised that it was adopted as the poverty line.
3. PPP stands for purchasing power parities and is, as you said in the powerpoint slide, a measure used to compare how much you can buy in certain countries with that currency. As noted in the ICP, PPPs are then used “to convert the cost of a basket of goods and services into a common currency.” Researchers use PPP instead of exchange rates because the exchange rates “are not accurate in measuring the relative sizes of economies and levels of material well-being.” By using PPP, researches can more accurately compare the “output of economies” and the well-being of the inhabitants. Also, PPPs are more accurate in measuring a country’s share of world GDP.
4. The U.S. poverty line was created by economist Mollie Orshansky. The formula was how much a family of four would need to spend to just get by times three; three because a third of income is typically used for food. Her first calculation was based on the Department of Agriculture’s “low-cost food plan,” which put the value over 4,000. It was changed to 3,165 simply because it was closer to 3,000. This value has not been reformulated, except for inflation. Some of the criticisms include that the poverty line is consistent throughout the nation, despite, for example, the cost of living varying in different parts of the country. Two other criticisms are that the poverty line does not take into account the effects of government initiatives on the family’s disposable income, which lower their disposable income and that it doesn’t take into account variations in insurance coverage. While reading this, I felt more aware of the problems with the outdated poverty line, even though this might just be the tip of the iceberg. It was upsetting to know that it’s been this way since 1963. I also wondered where the extra 1,000 has been placed, instead of in the pockets of people who need assistance.
5. One issue pointed out is that the economy has not risen for everyone in the last five decades, but for the elite, highly educated and the rich. Economic growth is not trickling down as much as it used to. Danziger does acknowledge that rising women earning’s help to offset stagnant earnings of men. Globalization, such as technology used to replace labor, is one of the reasons economic growth doesn’t impact the typical worker. Another issue is that the minimum wage has not been increased to keep up with inflation. Also, it is more difficult for unions in the United States to organize. An interesting point he made is that poverty levels would have been higher without the government benefits.
1. From my PowerPoint presentation, what isn’t clear? Any thoughts or comments you would like to share?
The PowerPoint presentation gave very clear, concise explanations on the important aspects in the ‘Concept of Poverty’ reading materials. It highlights the general definition of poverty being the serious deprivation from basic needs, including food. It also clues us in to make distinctions in identifying who are poor and who are not, based on statistical evidence (absolute vs relative poverty measures) and different approaches (Biological, Inequality and Relative deprivation). As it relates to aggregation, the paper requires that all persons below a specific line be labeled as poor, and are sometimes considered a nuisance to the rich, though some people in poverty did not choose poverty, they were born into it. It does not account for health status, insurance, other physical things people can survive without, but without it may be regarded as them being in poverty (e.g. technology) etc. I believe these are very important things to consider in deeming someone poor, as no poor families are identical in all ways, and so there should be further evaluations into these poor people, classify them and help them based on their specific needs (equity). This will in turn create less pollutants, decrease crime, give everyone a fairer shot at life and thus in turn increase a country’s economy.
2. From the reading, what is not clear? Any thoughts or comments you would like to share?
It has always been a long debate on what is meant by the term poor, whether it is having income below a set standard or whether these people can meet their nutritional requirements to survive. There have been many different data collection methods (surveys, creation of poverty lines by economist Orshansky). Different approaches have also been used: biological that deals with meeting the nutritional requirements needs and this may account for malnutrition as many families opt for high calorie unhealthy better tasting foods, inequality approach that deals with income distributions of these people, that is how far away are their incomes from the average income and relative deprivation that accounts for the feeling of belonging/ deprivation when compared to others or other countries across the globe.
I believe that no specific uniform rules and procedures will account for everyone all the time but accomplishing greater uniformity will make greater improvements over the varying practices that are used currently. Also, I believe that equity (providing what a family needs based on their specific situations-higher paying jobs, health insurance, education etc.) is the way to help eradicating poverty.
3. What is PPP? Why do researchers use PPP instead of exchange rates for international comparisons?
Purchasing power parity (PPP) is the measurement of the quantity of goods and services that a single unit of a country’s currency, can purchase in another country. Researchers have been using PPP instead of exchange rates for international comparisons because it levels the score of the different purchasing powers of different currencies. That is, controls price level differences and demonstrates how much people can live with in different countries. PPP is based on differences in prices levels across different economies in the world, and so it more accurately measures GDP shares, as opposed to exchange rates that does not account for the relative size of economies or the wellbeing of the level of materials. With PPP, countries can be ranked more accurately based on its share of the world GDP, thus making it a better tool.
4. Summarize the story of the U.S. poverty line and some of the main criticisms. What did you think of this reading (the two-page PDF)?
The poverty line used today was created by an economist, Orshansky in 1964, as an approach to determine what it meant to be poor, by examining basic needs, such as food costs. Orshansky used a four (4) person family (2 parent and 2 children) to create a threshold for poverty. The cost of food was factored in for that specific family size and then multiplied by three (3), based on the assumptions that families spend a third (⅓) of their incomes on food. This is adjusted for smaller and larger families.
Some weakness of this poverty line includes: Poverty is usually equated to hunger, when in fact some families may meet their nutritional needs but cannot afford other necessities. The threshold for poverty is the same across the nation and so the poverty line does not account for price differences for the same items across the country, therefore with the same income, one family will have less even after buying identical foods. Lastly, living standards have increased and this would account for a higher threshold for the poverty line, but these standards are not accounted for, and remains the same across the region, over the many years.
5. Summarize the main issues addressed in the video
The main idea in the video is that even with a growing economy in the US, the poverty level of its people is increasing. The video highlighted social programs (giving head starts, food stamps, Medicare) that were implemented specifically to combat poverty, but most benefits are going to the elite, highly educated and rich populations. The median earnings of workers based on gender were also tallied and it is seen that before 1973, men were earning more, though the economic growth was decreasing, but these workers were benefitting more. After 1973, the economy was much larger, that is the country is richer, but people stopped benefiting because their wages were stagnant. Overall, women had lower wages in both periods, but after 1973, women wages increased, which accounted for the ‘balance’ (remain the same level) seen in poverty as the men’s wages declined.
Government benefits are proven to decrease poverty, however, technological changes (replacing workers), worldwide globalization, government policy (stagnant minimum wage) have all affected workers. When compared to other countries, the US had lower minimum wages and less benefits to the unemployed, which accounted for the high poverty rate here. To combat this poverty, the government has to raise employment levels and earnings of the poor and give benefits to children of the poor, such as funding tertiary educations to help with this generational problem.
1. I watched the power point at least twice just so I made sure that I do not miss anything. The chart on slide 10 is based on the income of everyone around the world including the US? If so, how was the total of $500 calculated as the poverty line? I’m not really understanding that part. So in the US if you were making more than 500 you are above the poverty level?
2. I did not really understand the purpose of J.B.S Haldane poem. To me it seemed like Haldane does not understand the concept of being poor or how it happens. The first line says, “people must not be allowed to become so poor that they offend or are hurtful to society”. I feel like when someone is financially struggling they do not choose to be, it’s not like they wake up one day and say oh I’m going to be poor today or make myself poor. Being financially unstable happens over the course of time and sometimes there is not really much you can do about it. Heldane feels that people who are low income becomes a problem for those who are not and if that is the case I hope he was doing something to help the poor around him. I feel that anyone who has an issue with someone poor or low income should step up and do something about it. If they are not going to then just shut up.
3. PPP stands for purchasing power parties which measures the amount of goods and services that a single unit of a country’s currency can buy in another country. According to the brochure, “The PPP between countries A and B measures the amount of country A’s currency required to purchase a basket of goods and services in country A as compared to the amount of country B’s currency to purchase a similar basket of goods and services in country B”. Researchers use PPP instead of exchange rates for international comparisons because it is more accurate. PPPs make it easier to compare the yield of economies and the welfare of their occupants in a genuine term.
4. The US poverty line was created by economist Mollie Orshansky in the 1963-64. It was created by the calculation of how much a family would have to 4 spend on food. In 1962 it was $3,165 which had the value of 23,283 in 2012. A criticism about the poverty line was that it needed to be updated every year and there was not a plan on how to. All the different approaches used gave different answers which was not a good thing. Another criticism is that the poverty line is still what it was when it was first created. The reading was very informative but I ended it with a few questions. We all know the working wage in all states are different so what working wage was Molly using to come up with that total? Since the working wage is different in each state shouldn’t each state have their own poverty line? Also, the total is for a family of 4- 2 adults & 2 kids, but is that for a family with little kids? The more a kid grows the bigger the appetite is which means more money is being spent.
5. From the video a lot of people felt that the war on poverty failed however that is not what the problem is. The problem is the issues going on in the economy in the last few decades. Because of what was going on in the economy not everyone was rising up; the only ones who were doing better or gained the most benefits were the rich; they were just getting richer while the poor were getting poorer. According to the chart shown at 2:25 of the labor market, men who were working full time had their earnings adjusted to the inflation however at one point it stopped. For women their earning was always adjusting to the inflation so at one point it helped the offset of the male earnings. There were a few government policy changes that affected workers in a negative way and one would be not to increase minimum wage to help keep pace with inflation. From what I gathered from the video the government is basically not doing what they are supposed to be doing which is helping those who need it.
The PowerPoint was very clear to me but I did get lost going over the measures of poverty because I am not good with graphs. But I did appreciate the approaches to the concept of poverty because I feel that more people should learn them and evaluate them. I am sure we use them in our every day and people within impoverished communities that advocate for them understand them as well. However, the relative approach is one that I feel people in lower-middle-class communities should really pay attention to. I feel the line between the lower middle class and the poor is becoming very blurred.
Purchasing Power Parities is the measure of how much money it takes from one country to purchase a certain amount of goods and services from another country. PPP is used to adjust the purchasing power of the currency between the two countries so it can be an equal exchange. Researchers use PPP instead of exchange rates because it creates a more equal comparison between two countries’ currencies and removes the outcome of price level differences between countries.
The U.S. poverty line was created in an effort to combat poverty within the U.S. but was done in a way that was palatable and not accurate. The reading justifies the false number used to label the poverty line because “the poverty line needs to make sense and to be acceptable to the public and to policymakers.” but I do not understand how using an inaccurate number made it more acceptable to the public and policymakers. Especially since they are lowering the true cost will only account for a certain amount of people who are at or below the poverty line leaving people who actually are at the poverty line in between the poverty line and the lower middle class.
The video addresses how the Johnson administration did not fail at the attempt to end poverty in America the model just was not held up as time went on. The chart Danziger goes over shows how the average worker’s wage went up as inflation increased until the early ’70s. This change caused the poverty line to rise along with the moving of jobs overseas, technological advancements taking jobs from people in the United States, and the lack of unionization. Danziger suggests an increase in the minimum wage, creating more jobs for Americans that want to work, and finding ways to get children that come from impoverished families a college degree so they can move up economically.
1. Prior to listening to and reading the presentation, I never gave much thought to how we measure poverty. I always assumed I knew what it meant, and for the most part, I still think the definition of poverty is relative. Every person has their own opinion on what poverty consists of and/or looks like, and this image can vary based on location, social status, occupation, and many other social and environmental factors. The PowerPoint, however, made me realize that although poverty can be relative, we still need an acceptable definition in the eyes of public policy. In order to pass legislation to help those in poverty and prevent others from entering it, we need to define it.
I don’t have any specific questions regarding the presentation, and what I found interesting was the idea that there are different approaches to how poverty can be defined. I thought the biological approach was very interesting because we all have an image in our head of what poverty looks like. For example, living in New York City, my idea of poverty is influenced by the homeless people I see who are frail and begging for food. However, the presentation made me realize that this isn’t always a bulletproof way of assessing poverty. Someone does not have to lack food or be underweight to be living in poverty and perhaps not every person that is living in poverty is underweight and/or malnourished. What people do with their money is completely up to them and they might often make poor choices, so when it comes to food, they may spend it on more expensive items than those their body needs, which can affect their bodies and their image in relation to the image of poverty (Banerjee, Abhijit, and Ester Duflo. Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, PublicAffairs, 2012)
2. While I feel as though I understood the reading, I am still unsure of the author’s suggestion for how we should approach defining poverty. I understand his arguments for why approaches such as the biological, inequality, and political approaches aren’t very accurate, as well as his claim that poverty itself is an ambiguous concept that varies throughout communities, regions, and counties, however, I struggled to see what San suggests we do instead (San, 1981, p.23).
As soon as I finished reading the chapter, I asked myself, “So how do we define poverty?” because we can’t begin to fix it unless we know what exactly it is that we’re fixing. The chapter ends with the conclusion that, “…the arbitrariness that is inescapable… requires recognition and appropriate treatment” (San, 1981, p. 23). San knows that there are so many different ways people have tried to measure poverty and that it is not an easy, clearcut thing to do, however I wish he provided some sort of suggestion because I finished this reading with more questions than when I began.
3. PPPs, or purchasing power parties, represent how many goods and services one can purchase in a foriegn country with one unit of their homeland’s currency. For example, how many goods and services could I buy in Mexico with one US dollar? PPP is used instead of international market exchange rates because they are more accurate. Exchange rates are not very accurate because they do not take into account differences in price levels among different countries. The brochure provides an example between the US and South Africa, where South Africa has a lower price level than the US. Because the exchange rate ignores this difference, it estimates that 50 USD would purchase the same number of goods and services as would 363 ZAR. Because PPP takes into account this difference in price level, it provides a much more accurate result of 50 USD having an equal purchasing power of 239 ZAR (World Bank, p 1).
4. The US poverty line was established in the early 1960s by Mollie Orshansky when President Lydon B Johnson decided to declare the War on Poverty. It is hard to fight something without knowing what it is, and so we needed to provide a definition for poverty. Orshansky created the poverty line by taking the idea that people spend about one-third of their income on food and calculating the minimum amount of food a family of four would need to survive. Taking the price of the amount of food and multiplying it by three gave Orshansky a total of $3,165 1963-USD, and that figure became the poverty line (Deaton, 2013, p 1).
Since 1963, the poverty line has not changed for anything other than inflation. This has created a lot of controversy surrounding the line’s accuracy, because much has changed in the last 50+ years, including an increase in living standards and policy changes like Social Security payrolls and food stamps (Deaton, 2013, p.2). The poverty line also doesn’t take into account the range of prices seen throughout the country (i.e the price of gas or a house in a major city v. in a small countryside). I agree that the poverty line is no longer a very accurate measure of poverty in the United States. Although I understand how it was calculated and think that it was a smart way of going about calculating such an ambiguous concept, it is still problematic because poverty is not as straightforward as income relative to the price of food. The poverty line needs to be reevaluated to better reflect today’s living standard and so that those who need help start receiving it.
5. This video argues that we should be focusing on the economy to help eliminate poverty, and not poverty itself. From what I understand, trying to eliminate poverty by only focusing on poverty is like trying to cure an illness by only treating the symptom. In order for the illness to truly go away, we need to treat the root of the symptom.
Sheldon Danziger argues that over the past few decades, the economy has not been trickling down as much as it had when Johnson first declared the War on Poverty. Since 1973, the earning of male workers has remained stagnant while the upper-class have been benefiting more from the growing economy. My main takeaway was the saying that the rich get richer. Danziger explains that the reasons why the economy no longer trickles down to the middle and lower class workers is because of globalization and technological changes/advancements. The internet and online shopping (especially through major corporations) has decreased our need for small-businesses and so the average person falls into poverty while the CEO of the major corporation earns billions.
Danziger also addressed policy issues that have affected incomes and poverty rates. The most influential issue has been the stagnation of minimum wage. People’s wages are not changing in tune with changes in price levels, and this has not only affected disposable incomes, but has also hurt unions. Danziger suggests that if we want to decrease poverty in the US, we need to increase minimum wage and provide more benefits to the impoverished and working poor.
Hi Katelyn,
I felt the same way when I read Sen’s article. He discussed many different ways poverty can be measured, and they were all criticized. Poverty is a concept that can’t be easily measured and it’s unclear what his own perspective is on the topic. Like you said, he critiqued each approach and idea about measuring poverty, since it’s ambiguous, but I would be interested in learning about his own suggestion and ideas of the topic.
The article also opened my eyes to looking at poverty in a different perspective. I also used to think that poverty looked one certain way, which is poor, homeless people on the streets, struggling with money, shelter, and food. However, when Sen discussed about relative and absolute poverty, I realized poverty is not one fixed definition and view of it. Poverty can be someone struggling with rent and is living paycheck to paycheck with a minimum wage job. That person may be on the verge of eviction because they’re behind on rent, and is struggling to put food on the table, so they have to decide which food to prioritize on buying, which may affect their nutritional intake.
The powerpoint presentation was informative and clear. I appreciate the explanation of each approach to the concept of poverty. The graphs also provided a visual that allowed me to fully understand how poverty lines can be arbitrary and alter how poverty is defined. A question I would like to answer from the Powerpoint is “What is something in American society that will make someone feel poor even if they aren’t in poverty?” My answer to that would be technology such as smart phones and wireless headphones. I also think that apart from material things, habits can make someone feel that they are in poverty in relation to someone else. For example, someone may go grocery shopping at whole foods and trader joe’s but if their income decreases and they can no longer afford it, they may feel impoverished. The same can be said about eating at certain restaurants or having to make coffee at home rather than buying it at Starbucks.
The reading was dense but overall I was able to understand the points Sen was trying to address. Something intriguing from the reading was the connection between nutrition and poverty. In my opinion, starvation and malnutrition can be indicators of poverty but don’t encompass all of it. For example, the typical American work day is 9 to 5 and someone working those hours will most likely earn enough to afford food but they might not take time out of their day to make sure they are intaking the nutrients and calories they need from each meal. In this case lifestyle might be the cause of malnutrition rather than poverty. Another interesting thing that I was reminded of by Sen is that poverty isn’t equal to inequality. If all people in a society are considered to be impoverished then one can say the inequality is low because inequality can still exist amongst the poor. However, the less money involved the less space there is for inequality to increase. On the other hand, there can be societies where all people are above the poverty line but have high inequality, if the difference in income and wealth is drastic. For example, let’s say someone has a salary of $60,000 per year which is enough to get by in the US but is nothing compared to the income of Jeff Bezos.
PPP stands for Purchasing Power Parity. The PPP measures the amounts of goods and services a currency from one country can buy in another country. Researchers use PPP instead of international exchange rates because the PPP eliminates the price level differences across countries which makes the currencies more equal. This gives a more clear view on what someone can afford in their currency in another country. The PDF gives an example between South Africa and the United States. At an exchange rate of 7.26, 50 USD equals 363 ZAR. However, the goods and services in the basket are not sold at the same price in both countries so when that’s taken into account, a $50 American basket of goods is actually equal to 239 South African rands. When turned back into American dollars using the exchange rate is less than $50 (239 ZAR/7.26XR = $32). This means that $50 can buy more goods and services in South Africa than the exchange rate states.
The poverty line in the United States was calculated by Mollie Orshkany in 1963. Using a family of four, two adults and two children she found how much they would have to spend on food just to get by and multiplied it by 3 assuming that they’d spend a third of their income on food. One of the critiques is that starvation and hunger doesn’t equate to poverty because there is no set of instruction stating what foods a poor family needs and how much. The United States government has received criticism for not raising the poverty line to truly reflect the populations. There is also variation in family expenses such as child care, health insurance, housing, transportation, education, etc that weren’t taken into account. In my opinion there should be a separation between families (because the number of children vary) and individuals (not every household is a family). Each US state and even cities should calculate their own poverty line because as we know New York is a super expensive place to live in because the cost of living is so high.
In the video Sheldon Danzinger addresses the issues with addressing poverty in the United States. Lyndon B. Johnson’s used programs such as head start, food stamps, pell grants, Medicare and Medicaid to help those who were in poverty. This along with the growth after World War 2 allowed incomes to increase for everyone including the poor. However, since 1970 only the elite have benefited from the transition of the economy. Globalization has sent jobs overseas where labor is cheaper (outsourcing) and some jobs have been taken over by machinery. This allows capitalists to maximize their profits more. In turn, the American government has failed to help the low income individuals although the economy has grown. In the video the United States is compared to various European countries and it’s obvious that the United States doesn’t do enough to assist people in poverty. Danzinger suggests that the minimum wage be raised, for the government to do more to help people who want to work but are unable to find opportunities and for education to become more widely accessible to lower income students.
1.Week one’s Power Point presentation is very clear. In the section about “Chapter 2: Concepts of Poverty” In: Poverty and Famines by Sen Amartya, it discusses the conceptualization of poverty and some issues of measuring poverty. However, the method of identifying poverty seems to be somewhat different. For example, the Greeks and Romans considered the absence of linen shirts to be an act of poverty. This shows that poverty is also related to the country’s economy and customs. People judge poverty by comparing the way they eat, drink, and wear.In the part of poverty measures, distinguish the poverty measures through the calculation of income. This part is very interesting, but I feel a little confused.
2.From the reading, Sen Amartya discussed the concept and measurement of poverty. On the issue of measuring poverty standards, the identification methods are different. Some communities compare the poor population to the number of people to measure poverty. There are also biological methods. Seebohm Rowntree defines a family as being in a state of “primary poverty,” whose income is not enough to obtain the minimum essentials and only maintain physical efficiency.” This shows that with the increase in dietary requirements, high-income people also have requirements for nutrition and calories. Of course, these It also depends on consumption habits. In some developing countries, they may regard hunger and malnutrition as the concept of poverty.
3.PPP is the equivalence coefficient between currencies calculated according to different price levels in various countries, that is, the exchange rate between two currencies is determined by the ratio of their unit currency purchasing power. The purpose is to make a reasonable comparison of the gross domestic product of each country. Researchers use PPP instead of exchange rates for international comparisons because currency exchange rates in certain countries vary greatly. For example, a basket of commodities in the United States is 50 USD, but the price of 50 USD in South Africa is 363 ZAR. Therefore, when converted to ZAR, 50 USD can buy more goods in South Africa. (Plus the changes in currency exchange rates of various countries.) In order to eliminate the differences between countries and water products, researchers usually use PPP for international comparisons.
4.The poverty line in the United States was set by Mollie Orshansky, an economist at the Social Security Administration, in 1963-64. She uses calculations to take a family of four as an example. The figures they spend will be counted, and then multiplied by three, because one third of the income goes to food. This resulted in a poverty line based on 3165 USD. The poverty line is retained, but only adjusted for inflation. As the maternal labor force increases, there is no way to take care of children at home, so childcare is another expense. This fee may be half the cost of salary. Similarly, because the income of some people does not meet the poverty line, not everyone meets the requirements of medical insurance. All of these may lead to a decrease in income of some people.
5.At the beginning of the video, Sheldon Danziger mentioned that President Johnson established a series of programs for poverty eradication in 1964, including food stamps, Pell grants, Medicare, etc. Sheldon Danziger mentioned that if we care about reducing poverty, we need to do a lot to increase employment and the income of the poor. For example, to increase the minimum wage ,to provide jobs for people who want to work but cannot find a job, and more children of the poor can get education (get a college degree).
Personally, I really liked the way the PowerPoint presentation was structured, and I really found the voice over to be very helpful in understanding the concept of poverty as well as understanding both the brochure and the assigned reading. Overall, the graphs were very useful and helped me get a better visualization of what you were trying to say, which made everything very clear.
The assigned reading was very informative, and I found it quite interesting to read about the authors views of poverty and I found that I learned quite a lot about this topic. With that being said, I did find the reading to be quite dense and I little hard to understand at first. One thing I found a little troubling and hard to understand from the assigned reading was the idea of ‘head-count measure’. Although the reading does explain what ‘Head-count’ is I feel like it wasn’t really thoroughly explained in this chapter which is probably why the term is still unclear to me. One thing I did like about the article was her views on the Biological approach and how she stated her concerns on that specific approach. She mentioned a lot of concerns on the approach such the nutritional requirements and these concerns are very thought provoking.
PPP also known as Purchasing Power Parity, is a measurement of the amount of goods as well as services that a countries currency can buy in another country. Researches use PPP instead of exchange rates for international comparisons because it equalizes the purchasing power which controls for price level differences across countries. While on the other hand, exchange rates don’t take into consideration the difference in currencies between countries. On other words, PPP does a good job in showing what one country can afford with their currency in another country.
The U.S. poverty line is used to determine what it means to be poor based off of certain criteria such as the basic needs of a person. The U.S. poverty line was created around 1963-1964 by Mollie Orshansky by calculating how much a family of four spends on basic needs such as food and multiplying that by three. The U.S. poverty line does fluctuate depending on the number of people living in a household but ultimately it has thresholds to determine whether someone is considered poor or not. Some criticisms that the U.S. poverty line is faced with, one being that it does not take into consideration the price variations across geographic areas because the criteria that the poverty line has is the same across the nation. The U.S. poverty line also focuses on the gross income of a family but fails to realize the changes in government policies that affect disposable incomes.
The video is focused on what has happened in the economy in last five decades that has affected the war on poverty and argues that the war on poverty is not the issue. The video talks about how the very rich are the ones who are getting most if not all the benefits leaving the needy behind with almost nothing which is causing a rise in poverty. It also addresses how now the labor market has flattened even though the economy has grown and how policy changes has affected poverty. The video showed that the U.S. needs to better itself in order to help lower poverty the way that other countries have done such as changing their policies in order to benefit the working class by increasing the minimum wage and increasing employment.
The readings were clear and understandable. The reading about Purchasing Power Parities was new information to me and it was put in a way that made it easy to understand. The second reading about how the U.S. poverty level is measured and how it came about was something I already knew thanks to the class I took last semester called Poverty and Inequality. The PowerPoint was also easy to understand due to the graph visuals.
PPP stands for Purchasing Power Parities. PPP measures the amount of goods and services that one country currency can buy in another country. There are countries that have a large gap in price levels, from this it’s possible to see if the country’s economy is good. Researchers prefer to use PPP because it can more accurately measure the price levels than the international exchange rate.
The article regarding the creation and implementation of the U.S. poverty level also stated some of the weaknesses that were not accounted for at the time it was created. The one who came up with a scientific way to calculate the poverty level was an economist named Mollie Orshansky. One of its big weaknesses was that the U.S. poverty level did not update with the times. The U.S. poverty level was created in 1963 and it updated based on the increase of food and wages, it did not take into account extra expenses such as childcare and health coverage.
The main issue discussed in the video is the reasons for poverty in the U.S and it also gives solutions to beating poverty. The war on poverty was declared by President Johnson in which he created programs to help those in poverty, programs such as food stamps, Medicare, and Pell grants. The video states that the lack of worker unions, policy changes, and the unchanging minimum age are leading causes of poverty for the working class. Ways to fix this would be increasing the minimum wage, raising employment, and bettering education for children.
I feel the that the powerpoint was really clear. I feel that the explanation given for each slide were really helpful for better understanding of the material, the graphs also were helpful to have a better idea of poverty. I also liked how the term “poverty” depends on the individual and their experiences because what “poor” to me means may be completely different of what “poor” to someone’s else means. I understood mostly everything from the slide but I would like further explanation on the “Aggregation” requirement for poverty. In terms of the reading it was really dense, it was a lot of information to process, but nonetheless it was very informative. I suggest less dense readings because that way we can retain the information better.
PPPs (Purchase Power Parities) are measurements that can analyze how many good and services currency can buy you in another country. Pretty much it analyzes what $100 dollars can buy you in Dominican Republic (As an example). The example given in the reading is that $50 USD can you you more goods in South Africa than in the United States because South Africa has a higher PPT. All of this is based on the countries economy, USD will more likely buy you more good and services in other countries that in the US itself. PPPs are more accurate than exchange rate, therefore are used more by researchers. As the example given by the articles that if we used exchange rates Indian will be ranked 9th or 10th in the share of world GDP, but when PPPs are used, India is ranked 3rd which is way more accurate.
To start of the poverty line in the US was set in 1963-1964 by Mollie Orshansky. According to the article the poverty line has changed since and it accounts for one of the main criticism. The poverty line should be calculated each years to have a better “realistic” poverty line, since they current measure leaves out many factors that affects the economy of families. For example there are now more mothers who have to pay for child care, they are people who pay more or less money when in comes to insurance, etc. Many of these factors need to be accounted for to have a realistic poverty line. Another major flaw is that poverty differs depending on where do you live, for example New York City is very expensive and the poverty line should be different from Texas. In conclusion, the poverty line its not accurate now-days, there are many factors that affect the economy which are not being accounted for. So I feel that we still don’t have an idea of who falls under “poverty”.
The video explains how we should focus on the economy because that’s what makes poverty. It explains that despite the many attempts to minimize poverty, such as programs created, poverty its still an issue because of what happened to the economy during the past years. It explains how the educated/rich people are they ones who benefit from our current economy. Poverty is measure by the amount of income a family has, and a lot of income from a family comes from government benefits. Failure to minimum wage it is also a problem why poverty still exists. It conclusion, the video states that we should focus on our economy if we want to solve the issue of poverty, we should increase minimum wages, provide more benefits for our workers, more jobs availability, and not only benefit the educated/rich people in the country. Overall, the video was really informative, it gave me a better understanding of how to solve the poverty issue and why poverty happens.
From my PowerPoint presentation, what isn’t clear? Any thoughts or comments you would like to share?
I agree that poverty is such a hard concept to define because it can be based on a lot of different factors and self-perception. The idea of relative deprivation seems so voles to me because it is something that I experience on the day to day basis. Social media has increased the feelings of deprivation because it is easy to compare your quality of life to others but when in reality we might be far from a progressive countries definition of poverty. I find myself in this loop with the consumption of materialistic ideals and then it takes reflection to see that the poverty I have created is just an illusion because, in fact, I have a lot of the resources that many people don’t.
From the reading, what is not clear? Any thoughts or comments you would like to share?
From the readings, everything seemed pretty clear but understanding the PPP one of the charts left me confused. The “Twelve Largest Economies by Share of World GDP,2011, breaking it down in class could help clarify what it really is demonstrating. What is it saying about the economy and why is it based out of 100. The PPP I am trying to understand is like building a house. Many immigrant families build houses in their home countries from America because the exchange rates allow U.S dollars to hold more value in home counties but those who make a certain income in these countries sometimes have trouble contracting and building because the goods compared to their money value holds a higher charge? This is the connection that is more visual to me but I am not sure if it correct.
What is PPP? Why do researchers use PPP instead of exchange rates for international comparisons?
The PPP is the purchasing Power Parity, it is the comparison in money quantity worldwide, which differs from the exchange rate- in the terms, I have explained it to myself. It is the measure of goods and services cost from one countries currency to another. This helps researchers get a more defined idea and understanding of poverty lines in countries and regions. Every economy has different prices for goods and services as well as wages and being able to distinguish the affordability of items in countries compared to others helps define a little better the poverty worldwide. Exchange rates give a false understanding since it is just dealing with the value of a dollar or money in another country but not on the impact of service and goods.
Summarize the story of the U.S. poverty line and some of the main criticisms. What did you think of this reading (the two-page PDF)?
In 1963-64 the economist Orshansky came up with an ideal poverty line which was designed based on a family of four and determined the number to be drawn as poverty line be $3,165. Since then there have been no adjustments except for the difference in inflation. This number is very derogative because it does not take into consideration the troubles poor families face in society in the current day. There have been many changes that were not calculated back in 1963, there is not one family that lives the same necessities and worries as the other, therefore making this number very limited. One main criticism is the health status and insurance coverage. There are so many medical bills that are not cover day insurance. Insurance is very expensive and so is child care which is another main criticism. Having a woman at home isn’t always the case since women are sometimes forced to go work ignorer to make ends meet at home. A third main point is an adjustment in family size, why a family of four if with time I have seen a family of 5 or 6 be more common. More children are more expensive to families and this does not mean they must limit their family size but more resources should be given to close the gap of poverty lines. I think this rating raises fair and adequate reasoning as to why the poverty line must be adjusted in all meanings and ways not just to accurately portray the inflation in the economy.
Summarize the main issues addressed in the video
The main issue that is addressed in the video is the statement wages in society especially that of men. Although women’s wages have not been as stagnant it does not significantly change the idea of poverty. Although 50 years ago there was a war on poverty this has come very hard to dismantle with stagnant wages and the fact that the elite has surpassed the benefitted rather than it being the poor. Sources like pell grants, Medicaid, and such often are designed to meet criteria that exclude the poor. An issue that was also addressed is the fact the economy has changed expeditiously throughout the years due to globalization, outsourcing, and new technology but no modifications have been made to target modern poverty. A way for it to be targeted is to raise the minimum wage with the current inflation at hand.
1. From the powerpoint, everything was clear. I feel like it helped understand and explain the content of the readings a little further as well.
2. The reading was clear and also interesting. It mentioned how people think of and treat people with less as if they are a burden to them when in reality they aren’t. Also it looked at specifics of things that should factor in when considering and measuring poverty beyond just food and income but how inequality and differences in living standards are a factor.
3. PPP is the purchasing power parity which basically is the value of one country’s dollar compared to another. This means that the same amount of money may be able to buy more goods in one country and less in another country or vice versa. As explained by the example, it is because of the difference in prices for goods in countries. Researchers use PPP instead of exchange rates because PPP is more accurate to measure the sizes of economies, what they contribute and how well it supports the people living in it.
4. The U.S. poverty line came about to give definition to what it means to be in poverty from income earnings and the ability to afford life basic necessities like food. The story also mentions how people equate poverty to hunger but don’t consider that in poverty people can have enough to eat and just not be able to properly afford other needed things. This also introduces the concepts of thresholds which is compared with access to resources to further define what it means to be in poverty or to be poor, like minimum income earnings for certain sized households. The poverty line has also not changed since 1969 but has only been adjusted to account for inflation in 2012.
5. The video discussed the war on poverty and the economy’s contribution to it. It explained how social programs help people’s ability to make a living as well as help improve the economy. Also discussed was government policies such as increasing minimum wage as inflation goes up so that people can afford to provide for themselves. Everyone also doesn’t benefit the same way or even at all from changes in the economy too.
1. The presentation was very clear and easy to understand. I found the concept of relative deprivation very interesting. The idea of feeling of deprivation that people may feel depends on who they are comparing themselves too, which somehow made me thing of college. College is often the place where we meet other people of different socioeconomic status, and I think a lot of us compare ourselves when we hear out better off classmates talking of their experiences. The point about commodities which have become indispensably made me think about how cell phones have become such a necessary commodity and, in the US, life without it would be very difficult since it is how we communicate with our loved ones and with our jobs.
2. The reading was also very clear and easy to understand. I found the concept of a biological approach to poverty weird, especially when the idea of a “minimum” amount of nutrition, food or income is mentioned. Having the minimum resources simply ensures subsistence and the idea that those who have those, who are able to narrowly get by are not poor is crazy. I think that was my main problem with this approach, the idea that not having the minimum necessities is what makes you poor, since that would not accurately capture the plight of most people at the bottom of the income distribution.
3. Purchasing Power Parity (PPPs) is essentially an exchange rate that allows you to equalize the values of goods in different countries, meaning that you can compare what amount US dollars will get you specific basket of services and good versus what amount of Mexican pesos will get you that same, or similar, basket of services and goods. PPPs are used because they allow us to control for differences in price levels across countries, because economies across countries may be very different, average wage may be very different, etc.
4. The US poverty line was set by in 1963 by Mollie Orshansky. She calculated how much a family of four would have to spend on food to get by. At the time the typical family would spend about a 1/3 of its income on food, so she multiplied the amount she got by 3 and got a $3,165 income. This poverty line was not necessarily chosen because it made the most sense, but because it was close to what already in place. Some of the criticisms is that the poverty line in the US does not distinguish between the needs of workers and non-workers and that some populations face higher medical costs. The line is also the same across the nation, which does not take into account that living in some parts of the country is more expensive than living in other. The standard of living in the US has also risen, which would produce a higher line than the one in use today. Also the line does not take into consideration changes in policies (ex: taxes) that can affect disposable income. This reading was really informative, but brief which I appreciate. A question I have is whether today what is spent on food is still used as the basis for creating the poverty line? If so, is food one of the biggest expenses of the average American household? Would it not be better to use rent?
5. The video explains how poverty has risen since the early 1970s. Danziger explains that wages for males have stagnated since the 70s despite a rising economy and inflation. However, the wages for women have been steadily rising. Another reason poverty is increasing is because economic grains no longer trickle down because of globalization and new technologies. There have also been policies in the US, such as not increasing the minimum wage and anti-unionization laws. Other rich countries do more to offset the economic changes that have affected poverty through policies which leaves individuals with greater disposable incomes. The video calls for the government to do more such as increasing the minimum wage, provide jobs, provide education for the children of the poor.
I felt the powerpoint information was clear and direct.
I found it interesting to see that there are requirements for poverty. I suppose I never thought about it in that aspect but more so had a set definition and/or lack of resources that would categorize one as being in poverty. I think in terms of poverty, we should focus more on equity when trying to find a solution.
Purchasing Power Parties also known as PPP measure’s the total amount of goods and services that a single unit of a country’s currency can purchase within another country. PPP is preferred over exchange rates for international comparisons because it makes the currency equal since some countries’ currencies are lower or higher in terms of exchange rates. With the PPP, it makes it equal and fair.
In reference to the U.S poverty line, it is interesting to me, like any other old laws and things that were created ages ago, why they are not updated considering so much has changed. This policy was set by Mollie Orshansky in 1963. It was criticized most for the fact that it no longer applies to today. It should be recalculated in order to fit the criteria and needs of people today.
In the video, it discusses how although there are programs and policies set in place to help those in poverty, it still exists in America and is not going away anytime soon which Sheldon Danziger expresses. In other countries, their low taxes on income actually help support those in poverty and unemployed. However, in the US, our high tax on income is not helping anyone that is struggling and in poverty. In fact, I believe it only makes matters much harder and the struggle much worse. I believe the government does not do what they know should be done because they want to have a separation of poor lower-class, middle-class and upper-class.
1. From my PowerPoint presentation, what isn’t clear? Any thoughts or comments you would like to share?
I found that the PowerPoint was pretty clear. An interesting point that I never really thought about was discussed in slide 7. This being the point made by Banerjee and Duflo in their book, Poor Economics, in which they talk about the way in which money is spent by those that are considered poor when they gain the opportunity to spend more of it than usual on food. Rather than spending this money on food that would be useful in increasing their nutrition intake, they instead spend this money on food that looks more appealing, expensive, and heavier on the calorie side.
2. From the reading, what is not clear? Any thoughts or comments you would like to share?
Personally, it’s not that things weren’t clear but rather it was a matter of processing what all this information means since it involved a lot of new concepts and vocabulary. Overall, it was pretty clear and it was insightful to learn a bit more in depth about the different approaches and how they are associated with poverty. For example, one approach that I would like to point out is that of the inequality approach. Sen Amartya makes clear that the two are not equivalent and should not be included within each other but that it also can’t be denied that there is some sort of relatedness. Though Amartya also mentions how there are arguments supporting the idea of viewing poverty as inequality, so it was interesting to see both sides.
3. What is PPP? Why do researchers use PPP instead of exchange rates for international comparisons?
First, PPP means Purchasing Power Parties. Second, PPP is the measure of specifically how much goods and services that one single unit of a country’s currency can purchase in another country. Researchers use PPP instead of exchange rates for international comparisons due to the fact that it helps eliminate the evident price differences between countries. This is extremely helpful as it results with a more equalized purchasing power of currencies. The PDF also discusses how a market exchange rate fails in term of accuracy when it comes to the measuring of the relative sizes of different economies whereas PPP allows for the comparing of the output of these economies, again showing how PPP is useful.
4. Summarize the story of the U.S. poverty line and some of the main criticisms. What did you think of this reading (the two-page PDF)?
The story of the U.S poverty line started with Mollie Orshkany as she was the one who set this concept of poverty line in 1963. She based her calculations on a family of four which included 2 adults and 2 children and her calculations resulted with $3,165 as she took into consideration the idea that a typical family would spend a third of their income on food. A main criticism that the U.S poverty line is the fact that it does not accurately represent what it should represent (it is believed that the line would be higher) since it has not been updated. I thought that this reading was interesting as it shows how something that was created in 1963 continued to be a reference point despite the fact that things changed as time went by. Furthermore, it was interesting to learn that the creator herself advocated for the action of updating her procedure when it came to calculating the poverty line though this was not done.
5. Summarize the main issues addressed in the video
The main issues addressed in the video is that of the economy has contributed to poverty, how various programs set to address the issues of poverty did not do so as poverty still remains a prevalent issue, and how there is a lack in addressing the economic changes that have an effect on poverty when compared to other counties. For example, the speaker Sheldon Danziger suggests that there is much that can be done such as raising the minimum wage or providing more opportunities of employment for those who want it but struggle to find jobs. Overall, there is an emphasis on the idea that much more work is needed and the ways in which we can continue to address the issue of poverty.
1. The PowerPoint Presentation cleared out any confusion I had after reading Amartya Sen’s book chapter. I thought the PowerPoint summarized the book chapter good. The requirements of the approaches of poverty concept were clear to me. However, I was confused on slide 13. I did not understand how 6000 was determined as the absolute poverty income. Did I miss something or I do not know if I overlooked something that was mentioned?
2. Although I had to read the reading twice to grasp the concepts clearly, I enjoyed it. Sen explained the idea of poverty in an approach I never thought of. How do we precisely measure poverty, and should we relate poverty to non-poor people and measure according to their means. Also, the idea of poverty closely relates to inequality rather than poverty being an inequality.
3. PPP (Purchasing Power Parties) measures a country’s currency and what goods can be bought in another country for that same value. PPP does not use exchange rates because it does not depict the close rates as PPP. Since exchange rates differ vastly according to different countries, this single unit help measure economic outcomes more accurately.
4. Mollie Orshansky came up with the United States’ poverty line in the years 1963-64. She calculated how much of family of four, two parents, and two children would spend on food. A criticism mentioned in the reading is that since the poverty line was adopted in the year 1969, the officials did not change yearly to fit into each year’s income. The bottom line is that the poverty line should be recalculated according to the country’s wages. When measuring the poverty line, the policymakers should consider child care, health insurance, family size adjustments, and geography.
5. The main issue discussed in the video is President Johnson declared war on poverty. Although there were programs made to help the people in need, such as headstart and food stamp, poverty still stands largely in the US. One way to help the economy overcome the poverty issues in the United States would be to provide the people with job opportunities and have the government a safety net. Increasing the minimum wage and having government programs is how European countries’ economies are doing better than the United States. Hence it is vital to provide poor people with jobs, education. Education is the door to job opportunities and “Success” in this economy.
1. From my PowerPoint presentation, what isn’t clear? Any thoughts or comments you would like to share?
I believe the PowerPoint presentation was clear and gave a concise explanation in regard to chapter 2 of “Concepts of Poverty” and the other reading materials. I wasn’t aware that there were multiple approaches and measures of poverty, that the definition of ‘poverty’ differs in different countries and cultures, it can be judged by environmental factors such as the type of clothing one wears as mentioned on slide 9. Also, as a visual learner, the charts, photos, and graphs helped further my understanding of poverty measures.
2. From the reading, what is not clear? Any thoughts or comments you would like to share?
The reading was a bit confusing, so I had to read it twice in order to understand a little better the new concepts and terms introduced, but the PowerPoint presentation helped with its interpretation. The poem by J.B.S. Haldane gave me the impression that in their eyes, poverty is perceived as a burden towards others. Instead of having an ounce of sympathy for their circumstances, they give an antagonizing attitude towards people in poverty for being placed below average in a system that they didn’t choose to live in. Furthermore, their poverty status prevents them to further up the ladder of social mobility.
3. What is PPP? Why do researchers use PPP instead of exchange rates for international comparisons?
According to the brochure, PPP measures the total amount of goods and services that a country’s currency can purchase in another country, equalizing the purchasing power of currencies. The value of the currency in one country can be substantially different in another. An example mentioned in the PowerPoint is that the United States’ dollar having a higher currency value than the Mexican pesos. Researchers use PPP instead of exchange rates for international comparisons because it is more accurate. PPP allows researchers to compare the output of economies and the welfare of individuals, and researchers have the ability to control the different value of currencies in different countries.
4. Summarize the story of the U.S. poverty line and some of the main criticisms. What did you think of this reading (the two-page PDF)?
The U.S. poverty line, created by Mollie Orshansky in 1963-64, was first used to measure the income of a family of four, consisting of 2 adults and 2 children, by first collecting the x amount of money spent on food. By doing so, Orshansky multiplied the total of money spent on food by 3, indicating that one-third of a family’s income is spent on food. A major criticism right off the bat is that the poverty line hasn’t changed since 1963 besides the value of inflation. The poverty line’s accuracy is led to be questionable since the line is believed to be higher than in 1963. The poverty line has to fit under the circumstances of people today, not in 1963, society has evolved so should the poverty line. I found it interesting that the poverty line led to the association that poverty equates to hunger to not only policymakers but the public as well.
5. Summarize the main issues addressed in the video
In the video, we learned that the Johnson administration had declared a War on Poverty and decided to create programs to improve the lives of workers and the growing economy. Social programs included head start, food stamps, Pell grants, Medicare, and Medicaid, were intended to reduce poverty but it turned out to be a failure since they didn’t adjust their focus to the economy. By the 1970s, the rich elite gained more benefits from the economy while the poor were stagnant due to globalization, outsourcing, and new technologies. The economy failed to increase the minimum wage for the working class although inflation was occurring and continued to invoke their sentiment on anti-unionization. Unlike the U.S., other countries offer more benefits for the unemployed, the poor, and the working poor. The U.S. has to do better for the working-class by at least increasing the minimum wage.
1. In the PowerPoint presentation explores poverty from the European aspect which is completely different from America. What I found interesting is how poverty in Europe doesn’t have a social class system arranging from rich to poor. It also seems like people who are amongst the lower rank in Europe have stable living conditions which are why they choose to have high spending on luxury and food, rather than spending on what they can afford.
2. The U.S poverty line has a set systematic system that measures the income of a nuclear family which is a married couple and 2 children. Poverty was stated to be around 3,000 dollars which were the economy food plans but over the years the price continues to increase and the food plan became more cater to the wealth and not to the poor which increases the poverty. I think this article shows how poverty increased in America due to the policymakers not being able to support or find a way to help those who have less.
3. The video summaries the war on poverty and one key reason that was stated in the video is that as we look to the future with technology is changing the economy and people are buying online compare to buying in stores. So people of the poor is are becoming outsourced. Economic growth hinders the poor. it was later stated in the video changes in policies will come to help the poor slowly adapt and create new jobs for the poor.
4. The PPP is the global currency that showcases what country can buy units in another country. This shows why American currency is worth more in other countries than that country’s actual currency. Researchers use the PPP exchange rates to measure the size of the economy. This allows them to measure which currency has the most value.
1)The PowerPoint was obvious. I also felt that the PowerPoint helped clarify and illustrate a little more the readings’ content. I liked that it included charts, graphs, and photos to explain poverty measures better.
2)The reading was straightforward and interesting as well. It discussed how people think of people with less and treat them as if they are a burden to them when they, in fact, are not. The readings looked at specifics of things that should be considered when discussing and assessing poverty beyond just food and wages, but how inequality and living standards disparities are a factor.
3)PPP stands for Purchasing Power Parties. The definition of PPP is the total amount of goods and services that a single unit of a country’s currency can buy in another country. Instead of exchange rates, researchers use PPP since the exchange rates “are not accurate in measuring the relative sizes of economies and levels of material well-being.” PPP is based on variations in price levels around various economies across the world. PPP calculates GDP shares more accurately than exchange rates that do not account for the relative size of economies or the well-being of materials.
4)The poverty line in the United States was set by Mollie Orshansky. The poverty line was calculated by using a family unit of four people. As she considered the concept that a typical family would spend a third of their income on food, her estimates resulted in $3,165. This poverty line was picked not simply because it made the most sense but because it was similar to what was already in place. The poverty line has not been changed but has just been adjusted over the years based on inflation.
5) The video addresses how while programs and policies are placed in place to assist those in poverty, it persists in America, and it looks like that the problem is not going away any time soon. The video shows that programs such as food stamps, Pell grants, and Medicare were placed to help people in need. But while inflation was present, the economy failed to raise the minimum wage for the working class.
1.
After reviewing the Powerpoint presentation, I was able to manage and understand most of the material presented. However, when reading the graphs I was kind of confused when graphs were posted one after another. Maybe if there were small notes to help transition or explain each graph, it would help me and others to understand them. There was also a slide with a ton of words that could have been broken down into three slides. (That is just a personal preference so the slide does not look like it has too much going on).
2.
From the reading that summarizes the story of the creation of the U.S poverty line, I was confused when some points about how Orshanksky’s “scientific” derivation of the poverty line was introduced. I found the particular reading interesting because of how relevant it is in today’s society. America in particular suffers from something relatable to a poverty line. Nearly eleven percent of Americans are in poverty. I found the last sentences representing poverty to be very clear and understanding.
3.
The PPP is the acronym for purchasing power parties. Purchasing power parties was the amount a country’s currency could buy using a different currency according to the brochure. Researchers use Purchasing Power Parties because countries vary in purchasing power for goods, using PPP resolves that issue in particular rather than exchange rates for international comparisons.
4.
The story of the U.S poverty line and some of the main criticisms made valuable points that still coexist in America to this day. The poverty line was created by Mollie Orshansky in 1963. Mollie Orshansky starts the poverty line with $3000 for a family of 4. However, there are a set of lines and thresholds that have to be distinguished. The poverty line is adjusted for inflation. Meaning it would adjust if anything were to happen to the economy. Some main criticisms were followed by it being statistically defensible, it being feasible with data and demographics. I found the reading to be pretty interesting.
5.
Some of the main issues addressed in the video were one when President Johnson set the war on Poverty programs. These programs included things such as Head Start which helped early childhood education, health, and nutrition, food stamps which helped poor families get free cold food, Pell Grants which offered free money, Medicare and Medicaid which helped families with health insurance. However, in the 1970s poverty increased. The rich gained most of the benefits even when they did not need it at all. Poverty would have been substantially higher if there were no government benefits. The minimum wage is too low for the poor is too low which is impacting the economy.
-Yassine Sakhi
On the comments section below, address the following questions (answers should be at least 100 words in length and posted by Sunday – This is how participation points are assessed (worth 30% of your final grade!) Please save your comments in a safe document before attempting to post them.
1. From my PowerPoint presentation, what isn’t clear? Any thoughts or comments you would like to share?
For the PowerPoint Presentation, I thought that it was actually very clear and informational, but I wish there were more definitions in the slides to help me understand what those words meant and how they relate to this course. Although it explains concepts of poverty and famines. The PowerPoint Presentation is very straight forward, showing through pictures and graphs to support what poverty and famine means. The large quotes and paragraphs gave good evidence and support to what is relative and absolute poverty. The graphs at first were also a little bit confusing but if you study it for a while you can kind of understand how the information was achieved.
2. From the reading, what is not clear? Any thoughts or comments you would like to share?
From the reading “Material Well-Being”, I don’t think I didn’t find anything confusing; I was more shocked on how the poverty line’s value was originally above 4,000 for a family of 4 to now it is about to 3,000. I feel like we need a new system in viewing the poverty line to make it more efficient at this time.
3. What is PPP? Why do researchers use PPP instead of exchange rates for international comparisons?
PPPs measures the total amount of goods and services that a single unit of a country’s currency can buy in another country. The PPP between countries A and B measures the amount of country A’s currency required to make a purchase of a basket of goods and services in country A as compared to the amount of country B’s. PPPs can also be used to convert the cost of a basket of goods and services in country B. PPP equalizes the purchasing power of currencies. The reason researchers use PPP instead of exchange rates for international comparisons is because of the large range of different price levels across different economies, the market exchange rate converted to GDP doesn’t accurately measure the relative size of the materials brought into different countries. PPPs make this possible, in comparing these outputs of the economies and the welfare of their inhabitants.
4. Summarize the story of the U.S. poverty line and some of the main criticisms. What did you think of this reading (the two-page PDF)?
Basically, an economist by Mollie Orshansky was calculating how much money a family of 4 spend on groceries, she realized that a typical family would spend about a third of their income just on food. Thus, creating the U.S poverty line as we know it today, Mollie’s formula was first based on the Department of Agriculture’s “low-cost food plan”, which wasn’t really low cost because the value came to be above $4,000. The food rhetoric is convenient because people tend to put poverty and hunger together. This rhetoric as well as reality gives the same answer that was convenient in 1963 when the line was drawn. But it’s less convenient in later years when different approaches to updating using what people say the line should be. But if Orshansky procedure was updated she even advocated over the years. After reading this I become more aware of what poverty is and how we can update the system. But the system is so outdated it worries me that we are not taking these things seriously.
5. Summarize the main issues addressed in the video
The main issues in the video that was addressed were the first thing he said about how President Johnson declared war on poverty in 1964. Which is creating a series of programs such as head start, food stamps, pell grants, medicare, and Medicaid. But since poverty is still high, many people argued that the war he declared was a failure. It is important to know that it wasn’t the war on poverty that was the issue, it is how we handled our economy in the last 5 decades that still plays an essential role in the poverty line. Johnson’s administration believed that they could reduce poverty by building on the growing economy by enhancing social programs. But since the early 70s, the economy has generated more poverty instead of less. One way to see how the economy has changed is by looking at trends in the median earnings of full-time workers. He also stated that if we didn’t have government benefits in the 70s then poverty today would be much higher. Our failures are the stagnant minimum wage and it’s now more difficult for unions to organize in the United States than in other countries. Other countries in Europe are more advanced than the US because they help grow the economy with the individuals who struggle to make a good living while inflation rises. What we need as stated in the video are a growing economy and a strong government safety net, but in all seriousness, our government puts its money in things we do not even need rather than helping people who are actually in need.