Poverty and Income inequalities in the United States

Increasing poverty levels should be a source of concern for the US government and society at large. The estimated rate of poverty in 2008 for example, revealed a 0.7 percentage increase from the previous year – an increase noted to be “the first statistically significant annual increase…since 2004” (US Census Bureaua 2009: 13). The importance of such statistics is that changes in poverty levels are in direct association with level of economic growth especially when the latter is measured in terms of income (Adams 2004). Further income levels are a key indicator of economic growth and disparities in income have been associated to corresponding levels of economic and individual well being (Kim 1997; Qin et al. 2009). Such then informs the assessment of income and various aspects of income inequalities.

Income inequalities have been studied in relation to a number of variables. Earlier studies for example proposed an initial increase in income inequality with per capita income to a peak point beyond which an inverse relationship exist (Kuznets 1955). Other studies have found a direct relationship between income inequality and self-reported health (Zheng 2004). With regard to employment, minority groups have been noted to be more likely aggregated in low status, low paying jobs that are associated with lower levels of education whereas the whites occupy lucrative, and high status jobs associated with a higher education attainment (Hirschman & Kraly 1990; Huffman 2004; Semyonov and Herring 2007). Unemployment rates have also revealed that the whites enjoy proportionately lower levels even when educational capabilities are taken into consideration (Lee, and Mather 2008). Though some changes in occupational, educational and income prospects are noted to have occurred over time (Snipp and Hirschman 2005; Carnoy 1996) the income gap between these minority groups and the majority whites is noted to be still high (Semyonov and Lewin-Epstein 2009). Further studies assessing the inequalities in descending the job ladders in white collar jobs have found out that specific factors favor the downward mobility of the minority groups than the whites (Wilson 2009; Wilson and Roscigno 2009). Such disparities are buttressed in studies that analyze income specific variables such as employment benefits.

Racial inequalities are noted not only in the type of employment but also the benefits that accrue from such employment. Some studies have for example found out that differences between white and minority races occur particularly in respect job training paid for by the employer, and pay increments (Yang 2007). These found out that Hispanics would have a lower probability of obtaining “employer paid job training” compared to the whites whereas African Americans would be in a similar scenario as regards pay increments and level of income offered when compared to the whites (Yang 2007:323). Such studies perhaps could explain the inequalities observed in other employment related contributions such as healthcare insurance (US Census Bureaua 2009). go to methodology and results

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