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Poverty is one of the critical issues that the world is facing today. Even developed countries such as the US have been significantly impaired by the poverty problem. There are various ways in which the government can fight poverty. Raising the minimum wage so that it can match the rate of inflation is one of the ways of reducing poverty. Receiving higher wages will not only increase the income of the poor, but also will also help them to reach the middle-class level. Furthermore, the minimum wage will also lead to a spillover where all employers will increase the wages of their employees. Additionally, rising the minimum wage is also of benefit to the economy since purchasing power of an individual will increase accordingly (Madland and Walter 2).
Many people are poor because they strive to find an employment but their attempts fail due to the specifics of labor market. The government can increase its capital expenditure on creating more jobs that would absorb a significant number of poor people. The same will ensure that the poor have a source of income, and they will be able to climb the social ladder to attain the middle-class level. Other solutions include offering occupational training so that people in need can develop the skills essential for successful employment or businesses establishment (Madland and Walter 2).
The US government runs various programs aimed at addressing poverty. Temporary Assistance to Needy Families and Supplemental Security Income are among the key currently functioning programs that provide the poor with financial support so that they can afford a living. These methods are effective in alleviating poverty. At first, social workers provide the poor people with cash incentives for some period. But the main aim is to ensure that the dispossessed who are unemployed look for jobs and strive to attain self-sustenance. Additionally, these programs are also accompanied with professional training (Hyman 267).
Research also indicates that government assistance programs have led to a decrease in poverty, and are efficient in lifting a high number of people from such terrible economic position. Many people now can afford healthcare services that they could not recieve before. Additionally, educational programs for children have also helped in eliminating poverty significantly. The fact that the programs stimulate people to work instead of living on welfare payments is also another reason that has made them effective in fighting poverty and enlarging middle class (Hyman 268).
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It is impossible to implement a single program that will eliminate poverty and at the same time revitalize the middle classes. The main reason that makes it unattainable is that the poor and middle class have very different needs. The opportunities for the poor are cut off in comparison to the ones of middle class, thus no common program can effectively eliminate poverty and restore middle class’ position (Hyman 269).
Program to Reduce Poverty and Restore Middle Class
The only program that will reduce poverty and restore people to middle class is by creating jobs and providing education. Giving handouts to the poor is not effective, so the government should also focus on educating the youth so that their chances of getting jobs would increase. The government should devise ways of creating job opportunities to restore the jobs lost due to the recession. By adopting the above-mentioned program, it will be very easy for the people in need to move out of poverty and attain middle class (Perry 1).
According to the US Census Bureau, the income received by the highest quintile has increased significantly in comparison to the income received by the lowest one. The income of the highest quintile has almost doubled, while the income in the lowest quintile did not demonstrate any significant increase (Perry 2).
Aggregate household income is the total income earned by all individuals and companies in the country. Aggregate income is not adjusted for inflation and taxation. Calculating gross domestic product (GDP) is one of the best methods for measuring aggregate income (Quandt 2).
Middle class has been experiencing a decline due to the hard economic times that have persisted in the US. For example, the average income of many households has faced a shortage and it is hard to sustain the middle-class level of life (Perry 3).
Still, despite the decline, middle class has not disappeared completely. For example, in 2014, only 44% of recipients considered themselves middle class while in 2008, 53% belonged to the middle-class category. Middle class has shifted to lower-income levels, while people with high levels of income have earned even more fortune due to their increasing income (Quandt 3).
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The partial disappearance of the middle class has led to an increase in poverty because people are earning less, and supporting the achieved level of living constantly demands more money. For example, the average income of middle class has fallen by 10% since 1967 to stand at 43% of all income of the country by 2013, while the cost of living has almost doubled (Quandt 2).
The reasons for the decline in middle class are the same as for the rising poverty – a decrease in income and an increase in the cost of living. A large middle class, which would mean that people can afford the goods that are manufactured by companies, is extremely important to a country, as it ensures economic growth (Quandt 2).