Sadly, even with the world’s largest economy and a GDP per capita of over $49,000, poverty in the U.S. continues to be a fact of life for tens of millions of unfortunate Americans. In 2010, using the widely accepted measure of poverty as defined by the US Census Bureau, it was estimated that over 46 millions live in poverty, a number which represents more than 15% of the population.

Upon even rudimentary examination the causes of such high levels of poverty quickly become apparent. Statistics show that the lack of formal education and valuable, marketable skills of many within the lower classes of America’s economic pyramid are at the core of this enduring problem. Those without high school diplomas have earnings which are less than half of those who finished high school and those with degree qualifications earn many multiples more by comparison. In an increasingly global economy those without skills to differentiate themselves from the cheaper labor found overseas find it challenging to earn a salary which removes them from poverty. The increase in divorce rates and breakdown of families also show a strong relationship with people ending up in poverty, with single parent families nearly 500% more likely to be in poverty compared with married couples. This shows the strong need families in the US have for 2 wages to avoid ending up with financial difficulties.


The repercussions of poverty are tragic.

The repercussions of poverty are tragic with higher mortality rates, higher crime rates and a waste of human capital and potential being just some of the many reasons that US governments – both Democratic and Republican – have passed so much legislation over decades to try and reduce it.

The EITC has been one such policy initiative which has successfully lifted over 5 million families in the US above the poverty line as of 2010. Furthermore The Recovery Act of 2009, through which hundreds of billions of dollars were injected into the economy as a stimulus, is widely credited with bringing over 6 million people out of poverty in the first year after implementation.

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