Economic and Demographic Trends
Poverty in many developed countries can be linked to economic trends. In the 1950s and 1960s, for example, most people in the United States experienced strong income growth. Taking inflation into account, average family income almost doubled during this period. However, between the early 1970s and the early 1990s typical incomes, adjusted for inflation, grew little while the cost of living increased. Periods of economic recession tend to particularly affect young and less-educated people, who may have difficulty finding jobs that pay enough to support themselves.
Changes in labor markets in developed countries have also contributed to increased poverty levels. For instance, the number of relatively high-paying manufacturing jobs has declined, while the demand for workers in service- and technology-related industries has increased. Historically, people have learned the skills required for jobs that involve manual labor, such as those in manufacturing, either on the job or through easily accessible school vocational programs. As these jobs are replaced by service- and technology-related jobs—jobs that usually require skills taught at the college level—people who cannot afford a college education find it increasingly difficult to obtain well-paying work.
In many developed nations the number of people living in poverty has increased due to rising disparities in the distribution of resources within these countries. Since the 1970s, for instance, the poorest 20 percent of all U.S. households have earned an increasingly smaller percentage of the total national income (generally less than 5 percent) while the wealthiest 5 percent of households have earned an increasingly greater percentage (about 45 percent of the total). During most of this period, those in the middle and the bottom of the income distribution have become progressively worse off as the cost of living has risen.
Some researchers also cite demographic shifts (changes in the makeup of populations) as contributing to increases in overall poverty. In particular, demographic shifts have led to increases in poverty among children. In the United States, for instance, typical family structures have changed significantly, leading to an increase in single-parent families, which tend to be poorer. Single-parent families with children have a much more difficult time escaping poverty than do two-parent families, in which adults can divide and share childcare and work duties. In 1970 about 87 percent of children lived with both of their parents, but by the turn of the century this figure had dropped to 69 percent. The divorce rate in the United States more than doubled between 1960 and 1980, although it stabilized in the 1980s and fell somewhat in the 1990s. More importantly, perhaps, the proportion of children born to unmarried parents grew from about 5 percent in the early 1960s to more than 33 percent by 2000.
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