Influential writer James Baldwin famously said, “Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.” His quote is meant to highlight both the high monetary and non-monetary costs associated with being poor. Monetary costs refer to the poor’s lack of access to credit, equity, and transportation whereas non-monetary costs refer to the added stress and anxiety associated with being poor.

Economists define poverty as a condition in which someone or a family does not have enough means to satisfy their basic needs for food, clothing, shelter, and transportation. Furthermore, economists define the poverty rate as the percentage of the population living in poverty. Poverty can affect every part of a nation, impacting both the young and old, those living in rural and urban areas, and all races and ethnicities. However, poverty often impacts certain groups more often than others, such as those with less education, and families headed by women, including minority families.

According to the U.S. Census Bureau, the official poverty rate fell 0.4 percentage points to 10.6 percent in 2024. This means that there were 35.9 million people living in poverty in 2024. Furthermore, the official poverty rate decreased for White, Asian, and Hispanic individuals between 2023 and 2024. In contrast, there were no significant changes for other racial groups.

Discussion Questions:

  1. Why does poverty affect some groups in the economy more often than others? Discuss.
  2. What is the relationship between educational attainment and poverty? Are they positively or negatively related? Explain.