The foundation of the American Dream is a set of values including freedom, opportunity, equality, prosperity and success. The credo that everybody can make it “from rags to riches” is strong among Americans. The citizens believe that everybody in their country is equal, has the same opportunities and chances and can be successful in life – as long as they work hard enough for that. This belief got carried on through the centuries, its tangibility proven by the few lucky ones who actually made it, exploited by Republicans for their campaign and after all has always been one of the cornerstones of the American culture. Unfortunately the American Dream cannot be lived by every citizen of the States. According to Oxfam between one quarter and one third of the American civilization belong to the “Working Poor”, a group of people that occupy jobs but do not earn enough money to live off. Many live beneath the poverty line even though they are employed in one or several jobs. These people can be met everywhere: working in restaurants, supermarkets, hotels, daycares and private mansions - to only mention a few. When examining the States’ poverty rate there are severe differences between the ages, gender and ethnical backgrounds of the people who are, per definition, poor.
The myth of equality has failed many people in the United States. It still is a country driven by prejudices, inequality and false hope. Many citizens, legal and illegal, do not benefit from the system. Exploding costs for health insurance and a decent education are only the tip of the iceberg. A not so small part of America’s population struggles to feed their families and to offer their children a future filled with chances, better opportunities and improved living conditions. Escaping a social class is not easy, overcoming prejudices as a member of an ethnic minority is hard and the fight to overcome the gender pay gap is not won yet. People of a lower class, the ones with a foreign heritage, and certainly more men than women, make up the biggest part of the working poor. In the following chapters we will examine the large group of people who work hard and still live under the threshold of poverty. We will analyze the reasons for their situation, why certain groups are more likely to be stuck in low-wage jobs, how hard it is to achieve the American Dream and the psychological consequences of a life spend stuck in a poorly paid job.
2
Table of Content
1 Introduction...3
2 Poverty in the United States...4
2.1 Who Belongs to "the Poor"?...5
2.2 Food Insecurity...6
3 The Working Poor Concerning Gender ...7
3.1 The Pay Gap A Brief Introduction...8
3.2 The Pay Gap A Tool of Discrimination towards Women...9
3.3 Occupational Segregation...10
3.4 Explaining the Pay Gap...11
4 The Working Poor Regarding Ethnic Minorities...13
4.1 Illegal Immigrants and the Working Poor...14
4.2 Women among Ethnic Minorities...16
4.3 Racial Prejudices in the United States...17
5 Social Heritages and the Myth of Equality in the United States...19
5.1 The Need of Owning Money to Make Money A Vicious Circle in the United
States...23
5.1.1 The Costs of Colleges...23
5.1.2 How Families Afford College...24
5.1.3 Reasons for Enrolling Community College...25
5.2 Why Do We Need Employments? How Jobs Define People's Value for Soci-
ety...26
6 Proposed Solution to Decrease the Poverty Rate...28
6.1 The Importance of the Affordable Care Act...32
6.2 The Threat towards Equality by the Presidency of Donald Trump...34
7 Conclusion...37
8 Works Cited...39
3
1 Introduction
The foundation of the American Dream is a set of values including freedom, oppor-
tunity, equality, prosperity and success. The credo that everybody can make it "from rags to
riches" is strong among Americans. The citizens believe that everybody in their country is
equal, has the same opportunities and chances and can be successful in life as long as they
work hard enough for that. This belief got carried on through the centuries, its tangibility
proven by the few lucky ones who actually made it, exploited by Republicans for their cam-
paign and after all has always been one of the cornerstones of the American culture. Unfor-
tunately the American Dream cannot be lived by every citizen of the States. According to
Oxfam between one quarter and one third of the American civilization belong to the "Work-
ing Poor" (Working Poor 8), a group of people that occupy jobs but do not earn enough
money to live off. Many live beneath the poverty line even though they are employed in one
or several jobs. These people can be met everywhere: working in restaurants, supermarkets,
hotels, daycares and private mansions - to only mention a few. When examining the States'
poverty rate there are severe differences between the ages, gender and ethnical backgrounds
of the people who are, per definition, poor.
The myth of equality has failed many people in the United States. It still is a country
driven by prejudices, inequality and false hope. Many citizens, legal and illegal, do not ben-
efit from the system. Exploding costs for health insurance and a decent education are only
the tip of the iceberg. A not so small part of America's population struggles to feed their
families and to offer their children a future filled with chances, better opportunities and im-
proved living conditions. Escaping a social class is not easy, overcoming prejudices as a
member of an ethnic minority is hard and the fight to overcome the gender pay gap is not
won yet. People of a lower class, the ones with a foreign heritage, and certainly more men
than women, make up the biggest part of the working poor. In the following chapters we will
examine the large group of people who work hard and still live under the threshold of pov-
erty. We will analyze the reasons for their situation, why certain groups are more likely to
be stuck in low-wage jobs, how hard it is to achieve the American Dream and the psycho-
logical consequences of a life spend stuck in a poorly paid job. At the end the current political
and economic situation of the United States of America will be used as a basis in order to
propose a hypothetical solution. We will analyze what it takes to lift people out of poverty
and how America's future would change if this was achieved. On the other hand, the new
presidency of Donald Trump will also be considered to glimpse at America's future, empha-
sizing what this man might do his country.
4
2 Poverty in the United States
If a family's income is less than what they need to meet their basic needs for services
and goods, that family will be defined as living under the poverty line. Every year the U.S.
Census Bureau publishes a poverty report for the previous calendar year in order to deter-
mine who lives under the poverty line or is on the threshold of it. Gathering the data of the
annually updated Consumer Price Index (short CPI-U), which measures changes in the price
level of consumer goods and services purchased by households, the Census Bureau is able
to determine the income a family needs in order to not be considered poor. The annual report
Income and Poverty in the United States was published in September 2016 and presented
the collected data for 2015. The results concluded that that year 43,1 million people in the
U.S. lived in poverty, which makes up 13,5% of the overall population (see Proctor, Semega,
Kollar 12). According to the paper a family of two working adults with two children under
18 would need an annual income of $24.036 or over in order to not be defined as poor.
1
In
this case the amount of money marks the threshold of poverty; every yearly wage under this
score pushes a family of this size into poverty. The statistics presented in the annual report
cover families with up to nine children under 18, as well as single headed, couple, and senior
households. All of the calculated incomes are before taxes and tax credits and exclude the
non-cash benefits "such as Supplemental Nutrition Assistance Program benefits and housing
assistance" (see Proctor, Semega, Kollar 43).
Overall, the median household income for the United States added up to 56.516$ in
2015,
2
which shows an increase of 5,2% in comparison to the 2014 median of $53.718 and
is the first increase in household wages since 2007, which was the year prior to the most
recent recession. Furthermore, for the first time in eight years the report was able to record
a success for the non-Hispanic white and the African American communities as their real
median income increased by 4,4% and 4,1% (see Proctor, Semega, Kollar 5). The Hispanic-
origin household's yearly wage increased by 6,1% between 2014 and 2015 (see Proctor,
Semega, Kollar 5). No significant changes in income are listed for Asian households within
this period.
1
See Table 1 Poverty Thresholds for 2015 by Size of Family and Number of Related Children Under
18 Years
2
See Table 2 Real Median Household Income by Race and Hispanic Origin: 1967 to 2015
5
2.1 Who Belongs to "the Poor"?
Aside from what we know about poverty thresholds and median households, exam-
ining who belongs to the defined group of "the poor" is an important aspect so that a proper
overview of the situation of the poor in American society can be given. Author and currently
professor at Boston University Kevin Lang wrote in his book Poverty and Discrimination
that the image Americans have of someone being poor varies extremely within American
society (see Lang 43). Most of them are driven by stereotypes and prejudices when asked to
create a picture of a poor person:
When they think of someone poor, older Americans may have an image of someone living
in Appalachia or the rural south. Others may think of an elderly person. Younger Americans
are likely to think of a black or Hispanic person living in a single-parent family located in an
inner-city neighborhood (43).
According to official research the rate of poor non-Hispanic whites decreased to 9,1%, with
that group making up 17,8 million people of the U.S. population in 2015 (see Proctor,
Semega, Kollar 12). The rate decreased for all other ethnic groups as well; for African Amer-
icans to 24,1% with 10 million people of this group living below the poverty line; for His-
panics to 21,4% with 12,1 million members; and Asians to 11,4% with 2,4 million poor
citizens (see Proctor, Semega, Kollar 14). Even though the total amount of African Ameri-
can, Hispanic and Asian people living in poverty is lower than the one of non-Hispanic
whites, we still cannot overlook the fact that in 2015 61,4% of the whole population was
white and yet only 41,2% of all the poor belonged to that ethnic group.
3
We have to focus
on the percentage that shockingly demonstrates that nearly a quarter of all black citizens live
in poverty, followed by a little more than one fifth of Hispanics and more than one tenth of
the Asian community. In comparison, the proportion of poor non-Hispanic whites is less
than one tenth, even though they make up more than half of the American inhabitants. The
prejudices were not that wrong according to these numbers.
Poor citizens cannot just be divided into groups based on their ethnicity, but also on
their age. Overall the poverty rate decreased for all age groups within a year, which are
subdivided into three groups: under the age of 18, between the ages 18 and 64, and aged 65
and older. In this case, the children under 18 make up the biggest group with 19,7%, meaning
that 14,5 million kids in the United States grow up in poverty. Children have been the largest
age group in that statistic since 1973. The group of Americans aged 18 to 64 dropped to
3
See Table 3 and 4 People in Poverty by Selected Characteristics: 2014 and 2015
6
12,4% and 24,4 million, while the group of 65 and older makes up 8,8% and 4,2 million
people.
4
Income and Poverty in the United States offers a lot more statistics and distinguishes
between further factors than we are going to cover, yet one category is still relevant. We can
differentiate between the sexes: In the last year, 12,2% of the male and 14,8% of the female
citizens were defined as living below the poverty line. That is emphasized by table six show-
ing all families living under the poverty line and dividing them into subcategories. 15,5 mil-
lion of these families are female-headed with no spouse present. In comparison, only 6,1
million are male-headed with no partner present.
5
One explanation for these uneven numbers
is the fact that in most cases of a separation, mothers get custody over the fathers. The
gender pay gap is also still a significant problem in the United States and will be closely
examined in chapter 3.2.
2.2 Food Insecurity
Since 1995, the U.S. Department of Agriculture publishes an annual report about
food insecurity and the threat of hunger in American households (see Lang 48). The current
report Household Food Security in the United States in 2015 is available since September
2016 and summarizes which households were secure and insecure with regards to the supply
of food during the previous twelve months, which households had very low food security
and how many children were affected by food insecurity. 15,85 million families reported to
be food insecure in 2015, which sums up to 12,7% of American families. The report shows
a drop of 1,3% though, in comparison to the previous year.
6
The definition of the term food-
insecurity reads clearly in the report:
The food security status of each interviewed household is determined by number of food-
insecure conditions and behaviors the household reports. [...] They are classified as food
insecure if they report three or more food-insecure conditions. [...] [The affected] house-
holds are further classified as having either low food security or very low food security. In
[...] households with very low food security the survey respondent reported that he or she
was hungry at some time during the year but did not eat because there was not enough money
for food (4).
As observed in the report about poverty and income in the U.S., the number of food-insecure
households dropped in comparison to 2014 from 14% down to 12,8%. That shows that the
4
See Table 5 Poverty Rates by Age: 1959 to 2015
5
See Table 6 Families in Poverty by type of Family: 2014 and 2015
6
See Table 7 Household and Individuals by Food Security Status of Households, 19982015
7
rate of food insecurity declined proportional to the decreased rate of poverty within the last
year. 9,5 million (7,7%) of the total amount of food insecure families are classified as low
food-secure as their groceries mostly lack quality, while the very low food security is defined
by the interruption and reduction of normal eating habits by some household members due
to limited resources (Food 6) and affects 6,3 million households, which equals 5%.
7
In order
to get an overview, 125 million households were asked whether they would call their current
situation as food secure or not. Of these households, 38,9 million were households with
adults and children. In turn, 16,6% of them claimed to be food insecure, which sums up to
6,5 million households. Though there is a significant decline in this group by nearly 3% in
contrast to 2014, when over one million more households with children said they were suf-
fering from food insecurity.
8
Still, children do not seem to suffer as much as adults in food
insecure families. In half of all these families, the children were getting enough food while
the parents seem to relinquish their meals in order to properly feed their children. After all,
8,8% of these households claimed that only the adults did not have enough to eat, while 7,8%
households stated that children and adults were equally affected by the lack of food security.
9
3 The Working Poor Regarding Gender
Following the definition of poverty and food insecurity we will examine the core of
the subject and begin with the ratio of poor women in comparison to men, as they are less
often affected by it. According to the U.S. Census Bureau 14,8% of all females are living
below the poverty line. In comparison, 12,2% of all men are considered poor.
10
That is only
a slight difference between the sexes. When we add the ages to our consideration the gap
between the sexes increases. Examining the group of women aged 18 to 64 we find that
women's poverty rate drops to 14,4% and men's s to 10,5%. The difference increases when
we only regard those people over the age of 65: 10,3% of all elderly women and 7% of all
elderly men were considered as poor in 2015.
11
Concentrating on the group of women aged 18 to 64, one of the reasons they are more
likely to be living in poverty is the fact that there are more single-mothers living in the United
States. Women are more likely to receive custody of their children in a divorce. According
to the U.S. Census Bureau in 2013, mothers were nearly five times more likely to receive
7
See Table 8 U.S. Households by Food Security Status, 2015
8
See Table 9 Households with Children by Food Security Status and Children by Food Security Status
of Households, 19982015
9
See Table 10 U.S. Households with Children by Food Security Status of Adults and Children, 2015
10
See Table 11 Poverty in People by Selected Characteristics: 2014 and 2015
11
See Table 12 Poverty Rates by Age and Sex: 2015
8
custody than fathers. Of these mothers only 53,1% were granted child support (see Grall 3).
Furthermore the poverty rate of separated families is twice as high as the one of other family
structures in the States (see Grall 4). The number of children born out of wedlock also in-
creased which is connected to the overall decreasing number of new marriages. Statistics
show that while in 1950 less than 5% of all births were to unmarried women, 50 years later
the number has multiplied by nearly seven (see Lang 145). The Centers for Disease Control
and Prevention (CDC) offers a record of all marriages that took place between 1990 and
2015. The numbers of weddings have decreased in every single state of the U.S.. A national
overview shows that while in the year 2000 8,2 couples per one thousand inhabitants got
married, 15 years later only 6,9 couples entered wedlock.
12
That does not generally mean
that every child born outside of marriage lives with a single parent, but the record of the U.S.
Census Bureau shows that there are twice as many households lead by a woman with no
husband present than in reverse (see Grall 3). Hence, more households are female-headed
with more mothers raising their children by themselves without the additional income of a
spouse.
3.1 The Pay Gap A Brief Introduction
The second reason for a larger percentage of poor women than men is the gender-
related wage gap. June 10
th
1963 was a historically remarkable day: President John F. Ken-
nedy signed the legislation to guarantee equal pay among men and women who are operating
the same job for the same employer. 50 years later, the White House's National Equal Pay
Task Force published the official report Fifty Years After the Equal Pay Act, narrowing down
the improvement in wages women have experienced within half a century. The legislation
was the first act, with many more to come, that had an effect on women's rights regarding
job opportunities and earnings. The next groundbreaking law passed the following year: The
Civil Rights Act of 1964. It prohibited discrimination on the basis of sex, race, color, national
origin, and religion (Fifty Years 5). During the decade in which Kennedy signed the law,
over one third of all women were participating in the labor force with two third being em-
ployed in service and sales positions, whilst only 13% held professional jobs, those for the
most part being female-dominated professions like nursing and teaching (Fifty Years 6).
Passing the law was an important first step. Nevertheless, only a small percentage of the
female working force benefitted from the legislation as it exclusively supported those
12
See Table 13 Provisional Numbers of Marriages and Marriage Rate: United States, 20002015
9
women that worked in the same occupation and for the same employer as their male col-
leagues (Fifty Years 8). The majority of women were not affected by the act. They were
facing sexual harassment at work, denial of promotion because of their sex, payment of un-
fair wages and fewer benefits just like women are today (Fifty Years 9).
In 1972 President Richard M. Nixon signed a series of amendments to existing laws,
expanding equal pay rights. He "prohibited [gender-related] discrimination at educational
institutions receiving federal founding" (Fifty Years 9). These new opportunities lead to a
rise in women's participation in college and increasing numbers of females graduating with
bachelor's and master's degrees (Fifty Years 6), which enabled them to get higher paying
jobs. More women were able to participate in the labor force and their rate rose from 37,7%
in 1960 to 43,3% in 1970 and 51,5% in 1980 (Fifty Years 10). For the first time the majority
of all women had joined the business world. Especially working mothers grasped the chance
and exchanged the at-home rearing of their children and housework for the opportunity to
make a contribution to their family's monthly incomes. The labor force participation among
females nearly doubled within those 20 years from 27,6% to 54,1% (Fifty Years 10). Unfor-
tunately, despite Kennedy's legislation women were still struggling to gain wages compara-
ble to those their male counterparts received. The year the new law had passed, women were
rewarded 59 cents for every dollar their male colleagues earned (Fifty Years 6). During the
time men's incomes grew faster, until in 1973 women were rewarded with only 56 cents for
every dollar, dropping to an all-time low since the law of equal pay had passed (Fifty Years
12). An additional ten years later, the gap had closed a bit with women's wages increasing
to 64% equal to men's salary. Adding to this inequality they were experiencing difficulties
in advancing into leadership positions (Fifty Years 7).
3.2 The Pay Gap A Tool of Discrimination towards Women
Regardless of the increased opportunities for women concerning education and
higher wages, there still was a visible discrimination. By the millennial, women had taken
over the lead in obtaining college degrees with 57% of all bachelor's degrees and 58,5% of
all master's degrees being earned by women (Fifty Years 20). Their wages increased expo-
nentially compared to those of women who did not attend university. Within the time period
from 1980 to 2000, female graduates' wages increased by approximately 31%, while women
with lower education saw no change at all and the earnings for women who did not have a
high school diploma decreased (Fifty Years 16). However, men with lower educational de-
grees were awarded with higher wages. The National Partnership for Women and Families
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- Julia Merten (Autor), 2017, The social inequality in the Unites States of America and how President Donald Trump is going to handle this issue, Múnich, GRIN Verlag, https://www.grin.com/document/375457
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