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Standard Address

Standard Address. 12.1 Students understand common terms & concepts and economics reasoning. Objectives. LESSON 3.4 Providing a Safety Net. Determine why incomes differ across households, and identify the main source of poverty in the United States.

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Standard Address

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  1. Standard Address 12.1 Students understand common terms & concepts and economics reasoning. CONTEMPORARY ECONOMICS: LESSON 3.4

  2. Objectives LESSON 3.4 Providing a Safety Net Determine why incomes differ across households, and identify the main source of poverty in the United States. Describe government programs that provide a safety net for poor people. CONTEMPORARY ECONOMICS: LESSON 3.4

  3. Key Terms LESSON 3.4 Providing a Safety Net median income social insurance income-assistance programs CONTEMPORARY ECONOMICS: LESSON 3.4

  4. Income and Poverty • In a market economy, income depends primarily on earnings, which depend on the value of each person’s contribution to production CONTEMPORARY ECONOMICS: LESSON 3.4

  5. Why Household Incomes Differ • The median income of households is the middle income when incomes are ranked from lowest to highest. • The main reason household incomes differ is that the number of household members who are working differs. CONTEMPORARY ECONOMICS: LESSON 3.4

  6. Why Household Incomes Differ • High-income households typically consists of well-educated couples with both spouses employed. • Low-income households typically are headed by a single mother who is young, poorly educated, and unemployed. CONTEMPORARY ECONOMICS: LESSON 3.4

  7. Official Poverty Rate • The federal government determines the official poverty level and adjusts this benchmark over time to account for inflation. • The U.S. official property level of income is many times greater than the average income for most of the world’s population. • Poverty is a relative term. CONTEMPORARY ECONOMICS: LESSON 3.4

  8. Number and Percentage of U.S. Population in Poverty: 1959–2001 CONTEMPORARY ECONOMICS: LESSON 3.4

  9. Poverty and Marital Status • Poverty rates among female-headed families are five to six times greater than rates among married couples. • Poverty rates among female-headed families are two to three times greater than those for male-headed families. CONTEMPORARY ECONOMICS: LESSON 3.4

  10. Poverty and Marital Status • Since the mid-1990s poverty rates have trended down for all types of families, before rising slightly in the recession year of 2001. • Births to single mothers make up the primary source of poverty in the United States. CONTEMPORARY ECONOMICS: LESSON 3.4

  11. U.S. Poverty Rates and Types of Households CONTEMPORARY ECONOMICS: LESSON 3.4

  12. Checkpoint: pg 85 Why do incomes differ across household, and what is the main source of poverty in the U.S. economy? Incomes differ across households because of the number of individuals in the household who work and the age and education of these individuals. Families headed by females with no husband present are the number-one source of poverty in the U.S.. CONTEMPORARY ECONOMICS: LESSON 3.4

  13. Programs to Help the Poor • Social insurance • Income-assistance programs • Earned-income tax credit • Welfare reform CONTEMPORARY ECONOMICS: LESSON 3.4

  14. Social Insurance • Social insurance programs are designed to help make up for the lost income of people who worked but are now • Retired • Temporarily unemployed • Unable to work because of disability or work-related injury • The Social insurance system tends to redistribute income from rich to poor and from young to old. CONTEMPORARY ECONOMICS: LESSON 3.4

  15. Social Insurance Programs • Social Security • Medicare • Unemployment insurance • Worker’s compensation CONTEMPORARY ECONOMICS: LESSON 3.4

  16. Income-Assistance Programs • Income-assistance programs provide money and in-kind assistance to poor people. • Cash transfer programs • Temporary Assistance for Needy Families (TANF) • Supplemental Security Income (SSI) • In-kind transfer programs • Medicaid CONTEMPORARY ECONOMICS: LESSON 3.4

  17. Earned-income tax credit • The Earned-income tax credit supplements wages of the working poor. CONTEMPORARY ECONOMICS: LESSON 3.4

  18. Welfare Reform • Temporary Assistance for Needy Families (TANF) • Welfare reform has reduced welfare rolls and increased employment. CONTEMPORARY ECONOMICS: LESSON 3.4

  19. Income Redistribution—Composition of Federal Outlays CONTEMPORARY ECONOMICS: LESSON 3.4

  20. Checkpoint: pg 88 What are the main government programs that try to offer a safety net? The main government programs that try to offer a safety net are social insurance programs and income-assistance programs. The main social insurance programs are Social Security and Medicare. The main income-assistance programs are TANK, SSI and Medicaid. CONTEMPORARY ECONOMICS: LESSON 3.4

  21. Assessment Key Concepts #1. #2. #3. #4. CONTEMPORARY ECONOMICS: LESSON 3.1

  22. Assessment Key Concepts CONTEMPORARY ECONOMICS: LESSON 3.1

  23. Assessment Key Concepts #5. CONTEMPORARY ECONOMICS: LESSON 3.1

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