Chapter 12: POVERTY, INEQUALITY, + DISCRIMINATION Flashcards
A measure of a country’s total output to gauge its economic size
GDP
Total GDP divided by the population
GDP per capita
Lacking even the basic necessities, which typically include adequate food, clean water, safe housing, and access to healthcare
absolute poverty
A certain level of income that defines the income one needs for a basic standard of living
poverty line
When a person lacks the financial resources for a minimum standard of living
poverty
How unevenly income is distributed throughout a population
income inequality
The percentage of the population below the poverty line in any given year
poverty rate
A state of living where people can afford necessities but are unable to meet their society’s average standard of living
relative poverty
Money earned, on a regular basis, from working or through investments
income
When there is an equal share of all output or income
perfect equality
The value of all assets owned minus any debts; also known as “net worth”
wealth
Graphs income and wealth distribution of a population where the Y-axis has cumulative income or wealth and the X-axis is the percentile of the population
Lorenz curve
A numerical value of income or wealth inequality in an economy; it is the area between the equal distribution line and the Lorenz curve divided by the area under the equal distribution line
Gini coefficient
The Gini coefficient as a percentage (the Gini coefficient multiplied by 100)
Gini index
Any of five equal groups into which a population can be divided
quintile
“The differential treatment of workers because of nonessential differences in characteristics; that is, economically identical persons are treated differently within the market because of their race” -Dr. Patrick Mason
racial discrimination in the labor market
Intentional, clearly expressed (as it relates to racial discrimination)
explicit
Without intention, due to biases (as it relates to racial discrimination)
implicit
A cycle that makes it very hard for people to escape poverty; created when a system requires a lot of capital in order to earn enough to escape poverty
poverty trap
Those who have incomes just above the poverty line
near-poor
U.S. government programs that offer some protection for those below the poverty line and just above the poverty line who find themselves without jobs or income
safety net
A method of assisting the working poor through the tax system; first passed in 1975, it is one of the largest assistance programs for low-income groups
earned income tax credit (EITC)
A federally funded program, started in 1964, in which each month poor people receive a card like a debit card that they can use to buy food
Supplemental Nutrition Assistance Program (SNAP)
A joint health insurance program between the states and the federal government that provides medical insurance for certain low-income people, including those below the poverty line, with a focus on families with children, the elderly, and the disabled
Medicaid
Taking income from those with higher incomes and providing income to those with lower incomes
redistribution
A tax system in which the rich pay a higher percent in income taxes than the poor
progressive tax system
Total taxes paid divided by total income (all sources of income such as wages, profits, interest, rental income, and government transfers such as veterans’ benefits)
effective income tax
A tax imposed on the value of an inheritance
estate tax
