The government defines a poor family as one whose total income is less than the amount needed to satisfy minimal needs. The U.S. Census Bureau determines the poverty threshold, the income level below that which is needed to support a household or family. This threshold varies with family size. In 2004, the threshold was $12,490 for a single parent with one child, and $18,850 for a family of four with two children. The poverty rate is the percentage of people who live in households below the poverty threshold. The poverty rate varies among different groups. Among African Americans or Latinos, it is twice as high as for white Americans.
The causes of poverty include unemployment, lack of education, and discrimination based on race and gender. Many poor people live in areas such as inner cities or isolated rural areas, where there are few high-paying jobs. Other causes of poverty include economic slowdowns and the increasing number of single-parent families.
The United States has millions of poor people, but it also has the world’s highest per capital GDP. This is because income distribution, the way income is distributed among the population, is unequal. The richest 20 percent of the population has more than 13 times the income of the poorest 20 percent. The government spends billions of dollars on programs designed to reduce poverty. Enterprise zones, for example, are low-employment areas where companies can locate free of certain taxes.
