POVERTY is a big problem in developing countries like Pakistan and India. But one would be amazed to know that even in the world’s richest country-America- the number of the poor runs into tens of millions.

Perhaps, for the first time in recent history, poverty in America was seen across the world when the television network showed the victims of hurricane Katrina in its news programmes.

The world was shocked and some of the viewers had expressed the view that it looked like a scene from a third world country hit by a catastrophe.

The number of people living below the poverty line in the United States is estimated at a staggering 37 million or 12.7 per cent of the country’s population. In the US, an individual under 65 earning less than $9,800 a year is presently considered poor, while a family of three is considered as poor if its annual income is $14,680 or less.

Who are the poor in America? Since white Americans constitute 72 per cent of the country’s population, the US has far more poor whites than poor blacks or Hispanics. The number of poor whites in the US during 2002-04 reportedly stood at 16.1 million, while the number of poor blacks stood at 8.8 million and that of poor Hispanics stood at 8.9 million.

Although the number of poor whites was larger than the number of poor blacks and poor Hispanics, only eight per cent of the white population was living below the poverty line as against 24 percent of the black population and 22 percent of the Hispanic population. This is why observers view race as an important factor behind poverty.

The US poverty rate of 12.7 percent is reported to be the highest in the developed world, while it is reportedly more than twice as high as in most other industrialized countries. This is because the majority of the other industrialized nations are reported to have a more generous programme for their poor citizens.

The gap between the rich and the poor is also wider in the US than in most other developed countries. In the US, the poorest 10 per cent reportedly receive only 1.9 per cent of the country’s income, as against 4.8 per cent in Japan, 3.2 per cent in Germany, 2.8 percent in France, 2.3 per cent in Italy and 2.1 percent in the UK.

With the passage of time, the rich-poor gap in the US has shown an alarming increase. In 1965, Chief Executive Officers (CEOs) made 24 times as much as the average worker. The ratio was reported to have sharply gone up to 185 times by 2003.

One of the main reasons for increase in poverty in the US in the recent years is low wages for workers of all races. With labour unions weakened and increase in the minimum wages not on the government agenda, wages have generally lagged behind the cost of living.

The US has lost nearly 2.7 million jobs since 2001 to outsourcing. Good and lucrative jobs have been replaced by jobs carrying lower wages and no health benefits. Medicaid does cover poor children but few poor adults, who do not find it possible now to see the doctors due to the prohibitive healthcare costs. It has become extremely difficult for low-wage employees to meet even their basic needs with meagre earnings.

The government policy for reducing poverty has been erratic. In the 1990’s, some 4.1 million of the working poor were reportedly pulled out of poverty, which was attributed to the then President Bill Clinton’s pro-poor initiatives.

The poverty situation is getting worse once again as the focus of the government is on war against terrorism. Massive funds are being diverted to the Afghanistan and Iraq war. At a time when the federal budget has been showing a deficit of hundreds of billions of dollars, year after year, the Bush Administration can do very little.

The government may have to cut food stamps by billions of dollars to protect farmer’s subsidies. The food stamps have played an important role in protecting the poor from the threat of hunger in the past.

According to recent reports, the third year of an economic recovery (2004) has seen an increase in poverty in the country.

The situation in America has lessons for countries like Pakistan. The higher per capita income does not necessarily lead to decline in poverty and improvement in the living standards of all.

In the absence of strong pro-poor initiatives, increase in the GDP growth alone may not help in the alleviation of poverty.