Poverty and Inequality Americans are proud of their economic system, believing it provides opportunities for all citizens to have good lives. Their faith is clouded, however, by the fact that poverty persists in many parts of the country. Government anti-poverty efforts have made some progress but have not eradicated the problem. Similarly, periods of strong economic growth, which bring more jobs and higher wages, have helped reduce poverty but have not eliminated it entirely. The federal government defines a minimum amount of income necessary for basic maintenance of a family of four. This amount may fluctuate depending on the cost of living and the location of the family. In 1998, a family of four with an annual income below $16,530 was classified as living in poverty. The percentage of people living below the poverty level dropped from 22.4 percent in 1959 to 11.4 percent in 1978. But since then, it has fluctuated in a fairly narrow range. In 1998, it stood at 12.7 percent. What is more, the overall figures mask much more severe pockets of poverty. In 1998, more than one-quarter of all African-Americans (26.1 percent) lived in poverty; though distressingly high, that figure did represent an improvement from 1979, when 31 percent of blacks were officially classified as poor, and it was the lowest poverty rate for this group since 1959. Families headed by single mothers are particularly susceptible to poverty. Partly as a result of this phenomenon, almost one in five children (18.9 percent) was poor in 1997. The poverty rate was 36.7 percent among African-American children and 34.4 percent among Hispanic children. 15