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micro econ final2.docx - Contreras 1 Sean Contreras...

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Contreras 1 Sean Contreras Professor Zamzow MicroEcon100 4/21/2017 Poverty and Inequality Poverty is defined as a measurement of the number of people below a certain income, called the poverty line. The poverty line was created in in 1963 by Mollie Orshansky, she worked at the Social Security Administration; while there she published an article called “Children of the Poor”. The basis of the article was to set a poverty line built around the cost of a healthy diet. Since she had previously worked at the Department of Agriculture, Ms. Orshansky asked for the assistance of an agency called the Bureau of Home Economics, to calculate how much it would cost to feed a family nutritiously. In her studies, she has found that the average person spends one third of their income yearly on food. Under the ideas of Ms. Orshansky’s poverty line, came the Supplemental Nutritional Assistance Program, also known as SNAP. This program was created in 1964, allowing low income families to get 1/3 of their income in assistance. Her SNAP program is still in existence today and it has become one of the largest and most controversial programs within our government. In this paper, I will discuss how poverty and social inequality was created; how food stamp(SNAP) has become a national problem; and how I personally feel about the current food stamp epidemic. Government assisted programs have been around since the early 1930’s, when Aid to Families with Dependent Children act, also called AFDC, was created; this program provided financial assistance to families with low incomes. The problem with most government assistance programs such as AFDC, for every dollar made a dollar is taken away in financial assistance and
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Contreras 2 this has led to what many call a “poverty trap”. Another thing to look at in the poverty trap discussion is that in 1970 41% of woman were part of the workforce, meanwhile in 2015 more than 56% are part of the work force. Several things are behind this including a fast rising cost of living nationwide, lack of pay scale increases to match the cost of living, and limited government assistance programs. 1996 saw the end of AFDC and it was replaced by the program that we still have today, Temporary Assistance for Needy Families, also known as TANF. This program will provide a family up to five years of financial assistance for pregnant women or families with more than one child. TANF’s requirements include a shortened amount of time within the poverty trap by making state financial assistance temporary and putting in place guidelines for states to require individuals seeking TANF to meet specific working requirements in order to be eligible. Distribution of federal financial assistance is divided by the government to each state equally, and each state determines how to dole out their allotted money to their residents. To date the highest payment of TANF recorded was to a family in Alaska for $923; whereas, the smallest amount for TANF is in Mississippi for $170 because it was based on the cost of living.
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