501 Critical Reading Questions

conclusions about the economic well being of Americans in the years 1993
and 1994.
From  year  to  year,  the  economic  well  being  of  many  Americans
changes considerably, even though the median income of the pop-
ulation as a whole does not vary much in real terms from one year
to the next. One measure of economic well being is the income-to-
poverty ratio. This ratio measures a family’s income compared to
the poverty threshold (the income below which a family is consid-
ered  to  be  in  poverty)  for  that  family.  For  example,  the  poverty
threshold for a three-person family in 1994 was $11,817. A three-
person family with an income of $20,000 would have an income-to-
poverty ratio of 1.69 (
$
$
2
1
0
1
,
,
0
8
0
1
0
7
).
Between 1993 and 1994 roughly three-quarters of the population
saw their economic well being fluctuate by 5% or more. Conversely,
from year to year less than a quarter of Americans had stable incomes.
In the 1990s fewer people saw their income grow than in the 1980s,
and more people saw their incomes decline. Although the state of the
economy  is  a  notable  factor  in  determining  if  incomes  rise  or  fall,
changes in personal circumstances are just as important. People had a
good chance of seeing their income rise if they began to work full-
time, the number of workers or adults in their house increased, they
married, or the number of children in the household decreased. Con-
versely, people could expect a decrease in their income if they ceased
to be married or to work full-time.
Another  factor  that  affected  the  direction  of  change  in  family
income was its place on the economic ladder. The closer a family was
to  poverty  the  more  likely  they  were  to  see  their  income  rise.
Whereas, 45% of families at the top of the economic ladder, those
with income-to-poverty ratios of more than 4.0, experienced income
decreases in 1994. While age, gender, and race play a significant role
in determining one’s place on the economic ladder, these factors are
not good predictors of a rise or fall in income. The only population for
which  one  of  these  factors  was  significant  was  the  elderly,  whose
incomes tended to be fairly stable.
501