Poverty is a global problem. Using the U.S. dollar as a hallmark for living standards, approximately 2.8 billion people live on less than 2 dollars a day, and almost 1.2 billion live on less than 1 dollar a day. Given the differing living standards across nations, a dollar has different weight depending on context. But in the United States, how much does it cost to live adequately? That is, what is the minimum one should expect to have to provide for adequate housing, food, health care, and transportation for instance? And more importantly, what measure should one use to indicate when an individual or family has fallen below these standards of acceptable living? To understand poverty in the United States, it is important to address (a) the consequences of poverty, (b) the definitions of poverty, and (c) counseling and psychology’s understandings of poverty and social class and classism in relation to poverty and future research and practice.

Consequences of Poverty

Poverty’s effect on individuals, families, and communities is a growing and deleterious problem. For instance, U.S. Census Bureau data show that in 2002, 8% of Whites were in poverty, unchanged since 2001. Among African Americans, 24.1% were in poverty, which was higher than the 22.7% reported in 2001. For Asian Americans, the poverty rate was 10.1%, unchanged from 2001. And for Latinos/as, the poverty rate remained unchanged from 2001 to 2002 at 21.8%. For children, the percentage in poverty remained unchanged at 16.7% from 2001 to 2002. The poverty rate for families rose from 4.9% to 5.3%, and the percentage of female households remained unchanged at 26.5%.

Factors that contribute to the rise in poverty include the decrease in real wages earned by lower-educated workers and the increase in single-parent families. Real wages may be considered the actual worth of income an individual receives after inflation and other adjustments are considered; unadjusted wages, for instance, may seem to be high, but considering the actual worth of the wage in relation to inflation, the unadjusted wage may be an erroneous figure. Furthermore, those with 12 or fewer years of schooling experienced the greatest decrease in their earning power. This group of the working poor, or those with regular employment but living in near-poor or poverty conditions, has increased by 35% from 1990 to 1998. For many families, limited income restricts their ability to invest in their children’s education and future, thereby limiting children’s future social class mobility and furthering the intergenerational transmission of poverty.

Research also suggests that poverty is overrepresented among recent immigrants; African, Latino/a, and Native American communities; women and single mothers; and children. The research shows overwhelmingly that transient and persistent (chronic) experiences of poverty have the most serious consequences for children and adolescents. Essentially, poverty creates an environment wherein risk factors converge. For instance, for children and adolescents in an unsafe or violent and crime-prone environment, options for exercise and outdoor play are limited. Consequently, children’s health behaviors are affected, and outcomes may be increasing rates of sedentary behaviors, childhood obesity, and diabetes. Poverty also increases the exposure to other toxicities, such as lead poisoning and pesticides, and to low birth-weight—all related to later intellectual and social functioning. Other effects of poverty on children and their development may be evidenced in IQ scores, graduation rates, or adequate educational environments. Children who have experienced poverty may also exhibit higher aggression and conduct problems than children who have not experienced poverty, psychophysiological stress, and developmental delays. Additionally, experiencing poverty in preschool and early years decreases the probability that these children will graduate from high school when compared to experiencing poverty later in their education. Finally, for many children, there are deleterious effects of poverty on their mental health and emotional life. For instance, children who live in families experiencing financial stress also may have lower social competence.

Poverty creates situations where toxicities converge and limit the developmental potential of children and adolescents. For adults and children, poverty also creates situations of psychological strain and stress, which are related to poor health. For example, in one study, nuns, who in their adult life shared similar diet, health care, housing, and lifestyles, had patterns of disease and incidences of dementia that were related to their socioeconomic status almost 50 years earlier before becoming nuns. The results suggested the long-range effects of poverty in a person’s life. Furthermore, if access to health care is held constant, those living in poverty tended to have poorer health than those in higher social class groups. Therefore, chronic psychological stress related to living in poverty has a greater effect on an individual’s health than structural and societal safety nets such as adequate healthcare services. Because those in poverty or who are poor often have the worst mental health prognoses, there is little doubt that a mental health gradient exists. For those living in poverty, the prospect of experiencing psychological stress and limited access to mental health care is high; whereas for those individuals living in higher social classes, their psychological outlook is better as well as their access to mental health care. Those in poor and impoverished environments may experience psychological stress and, consequently, have higher rates of mental illness.

Two main theories have been posited to explain this mental health gradient. In the social causation theory, it is posited that individuals are made vulnerable to psychological stress as a result of living in poverty. In the social selection theory, individuals experiencing mental health problems are likely to be from economically disadvantaged settings and/or have a downward social mobility resulting from problems in their social and occupational life. Some research suggests that evidence supports both theories and that the evidence is generally mixed. Yet the overwhelming evidence supports the social causation theory, that is, poverty makes people vulnerable to mental health problems. In one example of a natural experiment, 1,420 rural children ages 9 to 13 were given annual psychiatric assessments for 8 years (1993-2000). Approximately 25% of the children were Native American and the rest were predominantly White. About halfway through the study, an Indian casino opened on the reservation and increased family incomes through a supplement. Of the Native American families, 14% moved out of poverty (ex-poor), 53% remained poor (persistently poor), and 32% were never considered poor. Results showed ex-poor children’s psychiatric problems dropped to the never-poor level, while those who were persistently poor remained high in rates of psychiatric problems. But the results for the ex-poor were symptom specific such that conduct and oppositional-defiant disorders decreased, but anxiety and depression were unaffected.

Although research into impoverishment, deprivation, and poverty shows a relationship with poor physical health, mental health, and educational outcomes, it is still unclear what constitutes poverty. Typically, the U.S. Census Bureau definitions are used, but the research also varies in operationalizing poverty from author to author. It is important to understand how poverty is generally conceptualized and used in the extant literature in a way inclusive of multiple definitions of poverty.

Definitions of Poverty

Poverty, as a term, has been used to both denote (signify literally) and connote (signify indirectly) situations of deprivation. Poverty may be a transient situation, a persistent state, an abstract demarcation between rich and poor, or an indicator of insufficiency. Often, what is considered poverty varies by study. Variations in the definitions of poverty have allowed for a nuanced understanding of the contexts in which poverty can be salient and for which comparisons can be difficult to make. For instance, using one definition of poverty to understand urban versus rural poverty is difficult given differing living standards, the composition of people of color, and context-specific stressors such as access to health care, violence and crime, and the monetary value of governmental subsidies.

In the United States, the standard definition for poverty comes from the Census Bureau and the Department of Commerce, which identify monetary income as the sole criteria for determining a poverty threshold. In 2002 for example, the poverty threshold, pre-tax income, for a family of four, consisting of two parents and two children, was $18,244. Monetary income does not include any capital gains or non-cash benefits such as public housing, food stamps, or Medicaid.

The poverty thresholds offer one measure to understand who may be considered poor in the United States, but it should not be used as the sole criterion. If a family’s income is above the poverty threshold, the family is not considered to be in poverty even though actual monetary benefits from their “above-poverty income” may be slight and, in fact, they are still poor. To illustrate, a family of five has a poverty threshold of $22,509. Even if their total family income was $25,000, they would not be considered “in poverty” given the current criteria. Although they would be considered “near poverty or near poor,” they still are above the official poverty threshold.

The Census Bureau calculates three categories of poverty based on an income-to-poverty ratio. This ratio is calculated by dividing the family’s income by their poverty threshold. Given the previous example of the five-member family whose income was $25,000 and a poverty threshold of $22,509, their ratio would be 1.14. In this example, this family is above 1.0, which is the threshold for a family of their size, but below 1.25, which is considered near poor. Families who are below 1.0 or below .50 are considered either at poverty or in severe poverty, respectively.

The poverty threshold was originally developed in 1963 and 1964 by Mollie Orshansky. Orshansky did not develop the poverty threshold as a standard budget for a family. That is, Orshansky did not determine the list of goods and services needed for a family of a particular size to exist at a determined level. Except for food stuffs, there was no standard, and there still is no standard, for minimum consumption needs for a family. Instead, what could be determined were food expenditures in a family, and Orshansky determined the minimum income needed to afford basic food stuffs and then multiplied that amount by three. The multiple of three was derived from a 1955 Department of Agriculture’s Household Food Consumption Survey that found families typically used one third of their household-budget, after-tax income, on food. The problem for many families under this definition is that this amount did not consider other needs, such as housing, clothing, medical costs, and transportation.

Several criticisms of the criteria for the current poverty threshold have been presented. First, although the poverty threshold is updated annually for inflation, the poverty threshold does not consider actual growth in consumption. That is, the food expenses do not reflect rising living standards and other consumption; instead the current poverty threshold reflects today’s dollar. The problem with this is that the living standard was set 30 years ago. The poverty thresholds do not consider the cost of fuel, child care, technology, health care, and housing, to name a few. Second, the poverty threshold is a standard, regardless of geography. Therefore, the poverty threshold is the same for someone living in rural areas as it is in an urban setting wherein living standards and costs of living may vary greatly.

Recommendations have been made to the Census Bureau and the Office of Management and Budget to revise their calculations. In 1995, a National Academy of Sciences (NAS) panel recommended new ways to measure income, families’ needs, and other aspects related to measuring poverty. The NAS panel recognized that official poverty indices did not account for the effect of taxes and medical expenses on those in poverty and did not account for the relative change in costs of food in relation to housing, clothing, and medical costs. The NAS panel developed six alternative measures, each accounting for different and related family income and expenses such as food stamps or housing subsidies, and each estimate is adjusted for family size. Each of the different measures produces varying levels of poverty depending on the criterion used. For example, even though the official poverty rate in 2003 was 12.7%, the Census Bureau reports poverty rates ranging from 8.3%, which used a comprehensive definition of income, to 19.4% using a definition of poverty excluding governmental payments.

Yet, regardless of what metric is used to assess poverty, the condition of poverty and its physical, psychological, and societal consequences need to be addressed and rectified. Poverty is clearly a social justice concern and a social inequity with consequences across all spectra of society. One potential direction to better understand poverty in psychology is to connect it with the study of social class and classism.

Poverty, Social Class, and Classism

Poverty is one outcome of sociostructural (e.g., legal, education, and economic systems) forces that marginalize and oppress individuals, creating inequities (injustice and unfairness) and inequalities (social and economic disparities). Poverty intersects with race and racism, and the aggregate effects on people of color are deleterious. Consequently, one outcome for many people of color is limited access to adequate and necessary health care. Those in poverty or poor conditions may have access to health care, but it may be in the form of emergency room visits rather than preventive care or regular health visits. Additionally, those in poverty may experience truncated, ineffective, or poor care when they are seen by physicians and psychologists. Another problem is the increased exposure to environmental racism. Environmental racism is an example of settings wherein toxicities—such as lead contamination, electromagnetic radiation, and refuse and waste management facilities—are generally iso-lated to poor and/or racial and ethnic communities.

Although poverty is easily identified, it is not well understood by counselors and psychologists. In part, the vagueness of poverty is linked to counseling and psychology’s poor conceptualization of social class and classism. One study of counseling journals and counseling psychology journals found more than 450 different terms used to discuss social class and socioeconomic status. In this review of 20 years of journals, the term poverty was used in the following ways: economic pressures of poverty, high-risk poverty, live in poverty, poverty, poverty level, poverty line, poverty rate, economic poverty, and poverty level incomes. Similar to poor conceptualizations of social class and classism, psychology’s limited understanding of poverty may contribute to the limited theoretical and empirical literature.

For counselors, psychologists, and other mental health care workers, poverty is not only a static monetary demarcation (i.e., the poverty line) but also a representation of varying levels of deprivation and marginalization. The poor, near poor, and working poor may all experience the deleterious effects of poverty, for example, exposure to environmental toxins (e.g., lead), poor schools, inadequate food, lack of transportation, and violence, to name a few. Poverty is a context that creates the conditions wherein various physical and psychological problems may arise. There is no singular causal link, but psychologists should consider a constellation of problems. For instance, counselors and psychologists should be aware of job demands and environments in which many people who are poor find themselves. High levels of stress, lack of autonomy and independence, and lack of decision-making ability are related to poor physical health indicators, such as cardiovascular disease, depressed mood, and cognitive deterioration. Additionally, the additive effect of living in impoverished neighborhoods and working in stressful and demanding jobs may also affect people’s world-view and perception of others.

For instance, people in lower social class groups tend to describe their world as hostile, dominating, and unfriendly. Furthermore, these same individuals are likely to anticipate less-friendly interactions with others. It may be that these individuals are constantly reminded of their low status and that this, in turn, reinforces their perception of a hostile world. For counselors and psychologists, awareness and sensitivity to interactions with clients and the covert and subtle ways in which status is communicated are important considerations. Additionally, developing a strong working alliance and therapy relationship may entail additional effort to prove oneself as credible and trustworthy. Counselors and psychologists may also find themselves challenging clients’ “paranoia” about hostile climates and interactions. Sensitivity to clients’ setting and predicament is important; dismissing and denying their hypersensitivity to interpersonal “slights” may be counterproductive in psychotherapy.

Poverty, much like social class and classism, needs to be conceptualized within a coherent theory that encompasses causes and consequences. In developing a theoretical model to conceptualize social class, classism needs to be an integral function. Much like race and racism, social class and classism are co-constructed; that is, social status differences cannot materialize without social and individual forces that exclude and marginalize certain groups and individuals. Similarly, by conceptualizing social class and classism as a world-view wherein an individual attempts to maintain his or her social class standing through classist behaviors and attitudes, poverty research may also benefit from connecting the environment to a person’s psychological understanding, perception, or coping. Examining the psychological function of poverty does not diminish or minimize the sociostructural oppression experienced by those in poverty, but it may provide researchers and clinicians with more tools for prevention and intervention within these communities.


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