decided that poverty meant “insufficient income to provide the food, shelter, and
clothing needed to preserve health.” Minimal requirement of shelter and clothing was
hard to gauge, but not food: The Department of Agriculture prescribed several diets
that provided minimal nutritional requirements. So she took the least expensive of
the diets, multiplied it by three (one-third food, one-third shelter, one-third clothes),
and voila! She estimated the poverty threshold—or the poverty line.Anyone who fell
below it was categorized as poor (Andrew, 1999).
This system is not without its problems. First, its calculations are amazingly low,
because shelter and clothing cost far more than food. In 2005, it was $9,570 for an
individual (about $4.60 per hour), and $19,350 for a family of four (about $4.65 per
hour if two adults work).
The calculations also don’t take into account significant differences in cost of liv-
ing in various regions of the United States: In Omaha, groceries cost 24 percent less
than they do in Chicago, 22 percent less than in Boston, and 30 percent less than in
Queens, New York. Housing in Omaha runs half of the average price in Chicago and
53 percent less than in Boston or Queens. But the same poverty threshold is used to de-
termine who is poor and who isn’t in all four cities (CNN has a city and state calcula-
tor for cost of living at http://cgi.money.cnn.com/tools/costofliving/costofliving.html).
The poverty line doesn’t take into account things besides food, shelter, and clothes
that are equally necessary to preserve health—things like child care, medical care, and
transportation. The Economic Policy Institute offers a basic family budget calcula-
tor, including all of these necessities. For Omaha, it comes to $31,000 for a four-
person household (two adults, two children). For Nassau-Suffolk County (part of
New York City), it comes to $52,114. And the percentage of the population that can’t
meet the budget increases to 23.4 percent and 37.5 percent, respectively.
Yet these statistics are still sobering. The United States has the highest GDP
in the world and the second highest GDP per capita (after Luxembourg), yet even
12.6 percent of its people fall below the
poverty threshold—more than Croatia (11 per-
cent) or Syria (11.9 percent), only a little less
than Thailand (13.1 percent) (U.S. Census
Bureau, 2006; CIA World Factbook, 2006;
World Bank, 2006). (“GDP per capita” is the
gross domestic product, the total value of all
goods produced in the country divided by the
number of inhabitants—a standard measure of
the total wealth and economic development of
a country. GDP per capita tells us little about
thedistributionof that wealth—whether one
family owns everything or whether it’s distri-
buted exactly equally to everyone.)
Recently, sociologist Fred Block began to
calculate somewhat different measures to illus-
trate poverty and standards of living. Instead
of the “poverty line,” Block calculated the
“dream line”—estimates of the cost of a no-
frills version of the American dream for an
urban or suburban family of four (Figure 7.3).
This includes the “four H’s”—housing (own-
ing a single-family home), high-quality child
care, full health coverage, and higher education
(enough savings to make sure that both220 CHAPTER 7STRATIFICATION AND SOCIAL CLASSDream line Two-parent income
at minimum wagePoverty line1973 1983 1993 2003$50,000$40,000$30,000$20,000$10,000$0INCOMEYEAR$8,300$22,441$32,228$46,509$6,400$13,400$17,000$20,600$4,540$9,900$14,350$18,400FIGURE 7.3 The Dream Gap
Source:From “Is the American Dream Dying?” by Fred Block, as appeared on Longview
Institute website, http://www.longviewinstitute.org. Reprinted by permission of the author.