Overcoming Poverty: Examining the Impact of Social & Economic Policies - Research Paper

Introduction

Poverty is the lack of enough material wealth or income to cater to basic personal needs. It entails spending less compared to someone on an average income level. Poverty takes away the chance to have a life devoid of sickness, excellent education, and secure home. It is believed that more often, poverty is created and re-created by the social and economic policies that have been developed to control or respond to it. Groot et al. (2018) observed that the interaction between poverty and the strategies designed to fight poverty had shaped the social structure of poor people.

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According to Wimer et al. (2013), more people are living in poverty than what the official measure implies in most urban centers in California. Counties like Los Angeles, San Diego and Orange counties tops in terms of the highest poverty levels. Although rural counties experience a high poverty rate, urban poverty is also more severe. The severity of poverty in urban centers is associated with the high cost of living. Children in California are often the worst affected by poverty.

Widespread and the Population Affected by the Social Problem

The prevalence of poverty among children is a point of significant concern, given that there is a solid relationship between child poverty and education, health, and earnings in future life. Also, the rise in the number of poor among adults in California is dramatic. In terms of race, poverty is more prevalent. Wimer, C. et al. (2013) further observed that poverty rate among the black is lower under California Poverty Measure(CPM) compared to Official Poverty Measure (OPM) while the poverty rate for other race was high under CPM compared to OPM. These differences are as a result of differential safety net receipts, the difference in the counties of residence, and the family composition or size.

The poverty rate for Hispanics is high compared to that of Asians. The difference in the poverty rate between the natives and immigrants also exists where it is high for the immigrants' community compared to the native community.The striking difference can be attributed to the existence of a large number of undocumented immigrants that are excluded from safety net programs. In terms of gender, the poverty rate is higher for women compared to those men.However, the difference is small due to the participation of single mothers in the safety net program.There is also a difference in the poverty rate between the educated and the uneducated household, where the uneducated household has a high poverty level in relation to educated households.

Policies That Are Attempting to Address the Social Problem

Supplemental Security Income

It is a federal assistance program that aims to target the aged and disabled persons with low income. The program was enacted in 1972, and it began a small program that provided benefits mostly to the elderly population. Since its inception, the program has grown to become the largest cash assistance program in the U.S, assisting children and working-age adults living with disabilities. The social security administration is entrusted with the task of screening the applicants.

To qualify for SSI, an individual`s income must be below-mandated income and the asset limits. The countable income limit varies annually with the average U.S wage index, which is similar to official poverty thresholds. However, the income and assets limits are not indexed for inflation. Furthermore, an individual must meet residency and citizenship criteria. To be eligible for this program, an individual must be a resident of the United States, which entails being an American citizen, national, or a qualified alien. Individuals meeting the above criteria get categorized into age, blindness, and disability. Applicants are only required to meet one of these criteria. An individual is eligible if they are of 65 years or older, for the blind if they have 20/200 vision or less. However, the disability screening process is complex because there is no simple definition of disability.

Earned Income Tax Credit

It is a refundable tax credit for low-income earners. Income and the number of children determine the amount of refund. There is a requirement for one to qualify forth tax credit. First, one must have at least one dollar of earned income. Those who are married and are filing for separation cannot claim for an income tax credit, and one is not supposed to file form 2555, foreign earned income, or Form 2555-EZ. This program thus ensures that the less an individual earns, the large the earned income credit.

Temporary Assistance for Needy Families (TANF)

The program gives funds to various states; the state then provides the fund to the needy families. To qualify for these funds, and the individual ought to be pregnant or in charge of a child of under 19 years old. The individual must be a U, S citizen, have low income, underemployed, about to be unemployed or unemployed. The state determines the decision on the amount of the benefit to be given. The state also outlines the eligibility criteria that an individual must meet to receive financial assistance or any other benefits.

Analysis of the Existing Policies

Shimizutani and Oshio ( 2013), observed that social earnings in Japan altered the earning distribution of the elderly (especially males). The provision of social security has led to a strong work incentive for older people. The main reason being that higher current earnings lead to higher future earnings in terms of social security benefits. The incentives have been powerful for people below the age of 65 years. However, Individuals who have a poor earning history may be eligible to get benefit from the supplemental security income that may exceed the benefits they may be entitled to in the standard social security program. Also, the fact that the benefit received through Supplemental Security Income does not index for prevailing inflation may lead to the beneficiary receiving less in real value.

According to Leigh (2010), after researching how hourly wages is affected by the earned income tax credit, they found that a 10% generosity of the EITC leads to a decrease in the wages of high school dropouts and 2 percent of those with high school diploma and no effect to college graduates. The demographic groups that received a large increase in Earned Income Tax Credit registered a drop in hourly wage compared to other groups. Thus, EITC served as a disincentive to work.

Falk (2014) argues that temporary assistance for needy families (TANF) has some flaws as the amount given to the needy families does not account for the inflation, these benefits have lost considerable value over time. Also, to qualify for the benefit, families are required to have assets below a specified amount. In most cases, the value of some assets owned by the families are not counted and thus makes the families to miss from getting the benefit.

Recommendations

In an attempt to alleviate the problem of poverty, there must be a concerted effort to support the current children and thy youth, for they constitute the generation that will take over the mantles of our society later in life. The government should promote the expansion of preschool access for disadvantaged children. A high-quality program should be established in areas where preschool programs do not exist. There should be an improvement of preschool quality in the counties with subpar programs and expansion of quality programs where the preschool exists.

To eradicate poverty, the authorities and the society ought to ensure that they are reduction of unintended pregnancies for low-income women. It can be done through social marketing campaigns to sensitize women on the importance of using long-acting reversible contraceptives (LARCs)

Expanding summer employment for low-income youth. The proposal that the federal government distributes grants to states so that municipalities can provide summer employment for low- income youth. The state should also address the academic barrier to higher education for the youth though improved placement in college remediation classes.

References

Falk, G. (2014). Temporary Assistance for needy families(TANF):Eligibility and benefit mounts in state TANF cash assistance programs. Congressional research service, 1-10. https://www.degruyter.com/view/journals/bejeap/10/1/article-bejeap.2010.10.1.1994.xml.xml

Groot, L., van der Linde, D., & Vincent, C. (2018). Inequality of opportunity in the United Kingdom. Journal of Policy Modelling, 1255-1271.

Leigh, A. (2010). Who benefits from the earned income tax credit?Incidence among recipients,coworkers, and firms. The BE Journal of economic analysis & policy, 10(1). https://www.degruyter.com/view/journals/bejeap/10/1/article-bejeap.2010.10.1.1994.xml.xml

Shimizutani, S., & Oshio, T. (2013). Revisiting the labour supply of social security earnings test:New evidence from its elimination and reinstatement in Japan. Japan and the World Economy, 9-111. https://www.nber.org/chapters/c14047.pdf

Wimer, C., Mattingly,M., Levin,M., Danielson, C., & Bohn, S. (2013). A portrait of poverty within California counties and demographic groups. Standford center on poverty and inequality, 1-8.https://web.stanford.edu/group/scspi/poverty/cpm/CPMBrief_CPI.pdf