Insufficient investment in the public sector is the primary cause of poverty in the United States.

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Poverty in the United States

Poverty is described as a situation in which one or more individuals fall below the standards of economic well-being. "The poverty rate is an indicator of the percentage of people whose household or personal income is less than the poverty line" (U.S. Census Bureau, 4). According to the US Census Bureau, the poverty rate in America is 13.5 percent. Poverty in the United States is caused by a variety of reasons, including labor market problems, race, and cultural factors. The economic growth in the United States is slow, mainly due to a slow recovery from the 2008-2009 recession and financial dilemma that caused it and sluggish secular growth. Increased inequality in the distribution of income, the subsiding of the growth framework that was founded with the intention of raising household debts and little, inadequate macro policy response are some of the foundation of poverty and slow growth of an economy. The public sector is a component of economic growth, public investments are necessary. A thriving economy relies mostly on the public sector, for example, health, education, infrastructure (roads, telecommunication) and environment management. The government and other organizations do not spend enough in the public sector in the form of investment; this has motivated the statement, "Insufficient investment in the public sector is the primary cause of poverty in the United States."

The Importance of Education

Education is an important part of the public sector; it is a key to the development of high economic standards in the United States. America is failing its education sector. Analysis of the federal budget shows that education funding by the government has reduced by 9.4 percent since 2011. Programs that have seen a reduction in the financing includes Title 1 grants (6.8 percent), Impact Aid for District Housed on Native American or federal land, advanced placement programs, and civic education. Research institutes do not receive enough funding. America suffers from resolute variance in the achievement of students who are defined by race and family income. The percentage of students graduating from college in the United States has been found to be decreasing significantly. There is a high probability of a dumb rich kid graduating from college than a smart and intelligent poor kid from a small income earning family. The American economy favors those with a high level of education; the trend has been growing in the recent decades. There exists a huge difference between the people with higher education; they have more income as compared to those with low education. At least forty percent of Americans do not receive education beyond high school level. The rate of college completion among children from low-income families is drastically low. Education levels and achievements among those who are below the poverty line are at a stand point, thereby making eradication of poverty a difficult task. The government should, therefore, invest more in affordable and high-quality early childhood education. Increased federal public funding in schools helps children from poor households to acquire the resources they need to achieve a high standard, reducing the ethnical inequality gap that exists.

The Neglect of Infrastructure

America has failed to close the investment gap that has existed since 1998. The infrastructure sector is in undermining state concerning investment rate. The government isn't spending more on the water and sewage system. The system is slowly aging, and the investment is not able to keep up with it. There is low capital expenditures amount that is located in the maintenance and the operation of these systems. This trend in small investments is doomed to rob at least 500,000 people of their jobs by the end of 2025. The nation is losing a lot in GDP which causes a high chance of poverty in the country, "Improvements in domestic transport and communications infrastructure can have significant effects on growth" (Anderson, Renzio and Levy, 8). In 2015 and 2016, every household lost almost $3,400 in disposable income due to faults in the infrastructure sector. Neglect of this issue by the government or any other organization will make Americans continue losing $5,100 average annually in 2026 to 2040. Millions of jobs are lost due to lack of infrastructure, but the greatest loss is in the economic impact measured in GDP, and business sales are more dramatic. Many people are forced to work for less payment; most of these jobs are being taken over by technology. Therefore, the government should increase the amount of investment in infrastructure to reduce the poverty level that the decline is causing.

The Crisis in the Health Sector

The health sector is going through a crisis even though it is the largest area in the public sector. The life expectancy of Americans is way below that of many developed countries. There is high inequality in public health according to race and social class. The healthcare cost on Americans is quite high. The cost of acquiring medical attention and care in the United States is so high due to the newly developed technology; increase in charges is leaving many Americans' pockets dry as they spend a lot on health. Federal insurance plans are not enough, especially because of the high rate of race inequality. The Obama care tried to solve the issue of the health crisis and increased the cost of medical attention, but it has not been successful although the number of Americans who got insured increased. The health system is so overpriced leading to the higher costs of medical drugs. The new health system tends to focus more on prevention rather than cure. Many Americans lack insurance cover, and some are underinsured. The government needs to put more resources in the development of the health sector by expanding Medicaid and making access to medical services less expensive for the people. A weak country cannot work, and this is a pothole for poverty to creep in. There should be more investments in family planning to help in birth control, especially in poor households. The government should invest in drug treatment centers to make the medical drugs less costly.

The Impact of Immigration

Immigration into the United States has been increasing at a high rate, "each year around 1.5 million immigrants enter the United States. About one-third of that number is illegal immigrants; many of the immigrants have a low level of education with most of them having just the high school diplomas" (Hoynes, Page, and Stevens, 64). Their contribution to the economy of the United States is only based on their labor. The poverty rate among immigrants is roughly 15.2 percent, nearly thirty percent below that of Native Americans. Therefore, there is an indication that immigrants are responsible for the increased poverty in the country. Estimates show that immigrant population increased the poverty rate by one percent by the end of 2005. Immigrants have earned low wages compared to the non-immigrants. This is because their accelerating shares come from developing countries such Mexico, and they also have a low level of education. The high rate of immigration is affecting the United States economy negatively. Therefore, the government needs to increase its investment in the security sector to curb and limit the levels of illegal immigrants to control the rate of poverty impeachment into the country.

Works Cited

Anderson, Edward, Paolo De Renzio, and Stephanie Levy. "The Role of Public Investment in Poverty Reduction (2006): n. pag. Web.

Hoynes, Hilary, Mariannssse Page, and Ann Stevens. "Poverty in America: Trends and Explanations." (2005): n. pag. Web.

U.S. Census Bureau. Income, Earnings, and Poverty From the 2004 American Community Survey 2010: n. pag. Print.

January 18, 2023

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