-

3W ' 'Vv

‘ ' ‘V‘V‘.

'VP'V“

 

-w“\---- -oq‘qvo- «-mn%;v

 
    

    

     

 

 
  

. _. . . ._ . z... ... . .....$.,.. 5A.... 5...
A . . . o. c . . o ._ .o 0‘ u
. . . . . . . . . ... . . . I . ... .
. O
O o. . . . . .0“ .1.
. . . . . . . _ _ .
o C — -
. .. . . . o . . ..
Q n u
. o .. v . a _. . . . . . . . l ..
. . . . .
n. u . - . . . . . .
. . . _ o
.
. . . . _
_. . I
O. . . . .....
. . .. . .. ._
n-' ‘ 0 - O
. ._ .
o r q .
o _ o _ . .
. . . _ _
. . o. .. .
. . o . . ..
s .
n .
. . o
’ O u
. o . a .
o
c . . . . .o .c.‘. 0. do
. _ I. ..
- .n'<t¢..ltv(_vro .
. . ..o. .. ‘vla.-..l
. , v _ . . .a. J ._ ..O. l..‘-.l<‘o
. .. . . . . . . .......< .a. . 5.. .
I .u. . o . ’o '7. .T.A-o :- .. O.’;
n

. . . . . ...; . .. a, 2.. ......‘.}x.......
. _ ,. ‘ . . _ . int??? .«.....al

      

. . .. .
. A .
. _ . o v.... , ‘ .Of. Fa-.la.”049<w.fl1.. 432:0.
. a . . . . .v .Q 4
. _ . . . . .5 (J. ‘on ._ f n . c...a.v(.¢1.o..t....f
. . . . V ,.c.v.....‘_ ..—¢._ o...vp
. . . a . o .. . v
. . ...m . . . .,. . . .. gaff... ...,l.v;.f-c. .0’3 ¢
_ . o . y . , 0.7. - a .—.o 9.]. . .
. . , _ . _.. .r.... we . 3. 3‘1).
. . . . . _ I. p
. . . ~ .. . . .a. .... .4.. .....4.‘n._ off 2.
. _ ,.. .... ”.96...

   
  

. .
_ .. . . . .. e..... C... .
. . . _ ~.. .' . f ’ .O’Ia;
. . _ .. .. . .0, w. r.
. .. _ .472...

 

'. S.

C
.‘ .
a-
. . o
.
o l:
1 .
;-,;;
oil”
l :1:
. ;

Q

’

AL 'POVER
[Ml

R
0F

9 Degree of M

R PE. INSULA
h
MICHIGAN STATE. ‘UNNER

_ ‘ . .... 2.- _l.c ../.r....a._...{,3?..qu...

_ . ‘... n.5,. ,.f...z..§..
.. _ F; 5 .. I u
. . I 2 n Ir}. .

. . . . O J IN<I 7.

‘F RU

'1 97.1

. SOME. DIMENSIONS 0

   

 

. . . O 0, . a? . .oflurdcnl’
. a 1..

E

m

R, . . . . ..._ . ...”.,¢..W.H.u.u., r. r
.IL

”U

D

B

an...

“U.

A

Thesis for

¢
4
l
v
o
- t
J
o r
I
. .
0 O O'-
‘r
o
a A
O
I.
o
‘
I“,.
a...
v _-

    

1.; . 0 . .. .
:L. . .- .._ .. :57 -. . . ..:. ,. . ._ .
. _ . . .. . .o. .. tor: - .....omiw:1r: .....v..,..~c1.... 9... c. . . . .. L... t .. .. . 1.. .3 .. . ... 1.3... .00.. r
~

0....... . . v. .n'. ...§| o.“ o .. . . . i 4‘
t r... . .. I. #3.... 2:2: .... . .. 3... . ‘ .... I: ,_ 3. . .. . o o. O L. r . t. . . O. ~.o’.. ' ‘ vquunL-u Oth O."
o . u .o v to. . ¢ H". _ ~ . .‘ .n . .r . o c . . D . . .. . . . u L
g 0 . Q . a o. c . . s o ‘ _ 3 _ 4. . .8 9.. . z... . . . n 5‘ c . :3 .. . . lo 00., .o‘ .A..oo.— 9.0.. Q 0.4.... oiouotll’ kncyO—Iuifiaf - «Qua, av

I'll .I!
ill I ‘1 I

  
   

y “‘ . o . a»
chhlgan Staue
. University
L

ll mum; Wilfllfllml Lu; M M Igmi Ifl 115mg IQ ll L

 

-----—-‘ ' am
Hi“? '1 “If—77? ”*3 A_PB_?‘.7.W;4€
”Wt? ‘~ -

Jr
vu'ir .. gm, -—vv

 

 

\

« a w...
A ‘o \

Cg;

«

 

ABSTRACT

SOME DIMENSIONS OF RURAL POVERTY IN THE
LOWER PENINSULA OF MICHIGAN

BY

Ali Abdul Razaque

This study is an exploratory effort to learn some
of the dimensions of rural poverty in the Lower Peninsula
of Michigan. The main emphasis is to expose some of the
aspects of this problem which may help to provide infor-
mation to those who want to consider this problem in
detail. The major considerations are: (a) to measure
the differences, if any, in material and services between
the areas with lower and higher percentages of poor fami—
lies; (b) to study the relationship of socio—economic
characteristics with the percentage of poor families in
the rural area; and (c) to review some of the current
and proposed antipoverty policies.

The definition of poverty is a controversial topic
but if it is defined in terms of money, then the money a
family needs to Spend during a given year can be compared
to the money actually available. Therefore, the total

money income line will be considered ($3,000 established

Ali Abdul Razaque

by the Social Security Administration) as a reference point
in this study because it is the only one for which time
series by relevant demographic characteristics are avail-
able.

To examine the difference in services and material
between the means of two groups of counties, the t test was
applied. Out of forty-two variables (socio-economic
characteristics), only twenty are significantly different.

The coefficient of localization analysis shows
that poverty and some factors of it are evenly distributed
as the total population throughout the area under study.

Multiple regression analysis shows eleven inde—
pendent variables which are significantly associated with
the dependent variable (per cent of poor families) at the
5 per cent level of significance. These significant
variables explain 92 per cent of the variation in per-
centage of poor families in fifty-one rural counties.
Total population, population sixty-five years and older,
general county revenue, and social welfare assistance
are positively related whereas medical doctors, total
employment, and employment in different industries as
mining, construction, manufacturing, utilities, and
other services are negatively associated with the depen—

dent variable (percentage of poor families).

SOME DIMENSIONS OF RURAL POVERTY IN THE

LOWER PENINSULA OF MICHIGAN

BY

Ali Abdul Razaque

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF SCIENCE

Department of Resource Development

1971

C; ¢7o7fi

ACKNOWLEDGMENTS

I wish to express my sincere appreciation and
thanks to Dr. Nicholaas G. M. Luykx, my former research
advisor, for his kind guidance in formulating the
research model.

I particularly wish to thank Professor Milton H.
Steinmuller, my academic advisor and thesis chairman,
for his endless patience, encouragement and guidance
during all stages of this study.

Special thanks also go to Dr. Daniel W. Sturt,
former Professor and Director of Rural Manpower Center,
Michigan State University, who financed this research
project and made available the computer time for analyz—
ing the data.

I am greatly thankful to Professor William J.
Kimball who negotiated with the Rural Manpower Center,
for the feasibility of this research work and the
financial aspect of the project.

Special thanks also go to Dr. Daniel Chappelle
for his valuable comments and criticism on the second
draft.

I am also thankful to Leon B. Perkinson, Agri-
cultural Economist, Economic Research Service, U. S.

ii

Department of Agriculture, for his time, encouragement,
and valuable criticism.

And last, but not least, I gratefully acknowledge
my friend, Lena Aliah, for her social and moral support

throughout this research work.

iii

Chapter

I.

II.

III.

IV.

TABLE OF CONTENTS

INTRODUCTION . . .

Purpose of the Study

Definition and Measurement of Poverty

Methods of Study .

Limitations of the Study . . . .

Definition of Terms

REVIEW OF LITERATURE

Concept and Definition of Poverty .

Importance of Poverty to the Economic

Study. . . .

Policies to Alleviate Poverty. . .

IMPERICAL ANALYSIS .

Difference Between Two Groups of

Counties With Low and High Percentage

of Poor Families .

Coefficient of Localization . . .
Multiple Regression Analysis . . .

Interpretation of Regression Analysis
Results With Relation to the Anti—Poverty

Programs. . . .

Population and Poverty

Age and Poverty .

Employment and Poverty

Welfare and Poverty
Welfare Programs .

Medical Facilities and
General County Revenue

SUMMARY AND CONCLUSION.

iv

Rural Poverty
and Poverty .

Page

H

NOGWN

Hrd

19

32
36

47

48
51
52

57
57
61
62
71
72
77
81

84‘

Chapter

BIBLIOGRAPHY . . . . .

APPENDI
Appendi
A.

B.

C.

CES

X

Distribution of Poverty and Population .

Distribution of Different Industries and

Total Employment .

Y Value Calculations

Page

92

95

97

99

Table

l.

A.

B.

LIST OF TABLES

Page
t Statistics of Forty-Five Variables; t Value
at 5 Per Cent Level of Significance--2.lOl . 49
Distribution of Poverty and POpulation . . . 95
Distribution of Different Industries and
Total Employment. . . . . . . . . . 97

vi

LIST OF FIGURES

Figure Page
1. Area Under Study . . . . . . . . . . ll
2. Observed and Calculated Values of Y

(Dependent Variable) . . . . . . . . 58
3. Level of Prediction . . . . . . . . . 59

4. Difference Between the Observed Values and
Calculated Values of Y by Counties . . . 60

5. Percentage of Employed Persons and Poor
Families 0 I O O O O 0 O O O O O 64

6. Relationship of Employed Population and
Poverty . . . . . . . . . . . . 65

7. Percentage of Employed Persons of the Labor
Force and Percentage of Poor Families . . 66

8. Percentage of Employed Persons of the Labor

Force and Percentage of Poor Families . . 67
9. Per Capita County Revenue and Percentage of
Poor Families . . . . . . . . . . 82

vii

CHAPTER I

INTRODUCTION

There has been much said, heard and written in
the recent past about the dilemma of poverty but still,
relatively, it is difficult to understand the complexity
of the problem. Most of the past efforts have been
directed toward understanding this problem both nation-
wide or regional-wide. The nature and the extent of this
problem is not a generalized concept because the extent
and the characteristics of poverty may differ from time
to time and place to place. The recent studies of some
rural sociologists and agricultural economists have fur—
ther revealed that the problem of poverty in cities is
actually rooted in the rural areas. Therefore, this
study is an attempt to deal with the problem primarily
in the rural area and relatively on a smaller scale than
the nation as a whole. The United States is a compo-
sition of great varieties of socio-economic, cultural
and geographic characteristics; therefore, there is a
need for this study to expose the local conditions of

poverty.

Purpose of the Study

 

In the last couple of decades numerous studies

have been done which extensively document poverty con-

ditions in Appalachia, the Deep South, the Upper Great

Lakes cutover region, and among the American Indians.

But as yet, not much consideration has been given to

other rural areas which have been also left behind and

are not the extreme cases like Appalachia and the Deep

South. This study is an exploratory effort which may

help to provide information about some dimensions of

poverty to those who want to consider this problem in

detail in such areas. The following three purposes will

be given the main consideration for exploring some of

the poverty dimensions for future research in this field.

A.

It is commonly assumed that poor have less of
everything except poverty itself. This sup—
position may no longer be true. Therefore,
the first purpose of this study is to measure
the difference in material and services between
the areas with lower and higher percentage of
poor families.

The second purpose is to study the relation-
ship of socio-economic characteristics with
the income level of the rural population.

The third purpose of this study is to review

some of the enforced and proposed anti—poverty

policies and programs in the light of the relationship
between socio-economic characteristics and the income
level of the rural population.

Definition and Measurement
of Poverty

 

 

The definition of poverty is a controversial
topic and many people do not agree on any one concept.
It is also not possible for a complete agreement on a
dictionary definition because it refers vaguely to "insuf-
ficiency of means" which cannot be translated into money
units. If poverty is defined in terms of an amount of
money, then it can be compared with the money available
to a certain family with the money it needs to spend
during a given year. By this way it necessitates, while
counting the poor, complete information regarding assets,
annual earned and unearned incomes, and cash-expenditure
needs of the family. Only earned and unearned cash data
is available in a dollar term, therefore, the measurement
of poverty is likely to be based on cash-income criterion.
There is disagreement on this criteria but it is a more
acceptable tool to measure the problem in the absence of
any other unanimously accepted approach. The general
disagreements which are associated with this criteria
are incomes in money and kind, income and assets, size of
family, location of family, and age and health. These

associated problems should be given a careful consideration

4
while measuring poverty. The scope of the poverty prob-
lem, the time and effort required to reach the goal of
eliminating it and, to a lesser extent, the remedies
that should be emphasized all depend upon the original
definition of the term. Therefore, the definition of
poverty deserves careful consideration. Poverty is a
discrepancy between needs and resources. In the opinion
of the National Advisory Commission on Rural Poverty:
. . . poverty is partly inadequate income, but it
goes much deeper than that. Poverty affects the
mind and the spirit as well--income is important in
escaping from poverty, though not the whole answer
to it. Education and jobs are also essentials and
they can lead to higher income. Income is obviously
needed to buy the food, clothing, housing, schooling
and health services required by any one in this money
economy if he is to escape from poverty--if he is to
preserve some self—es teem.
But poverty is much more:
A. It is lack of access to respected positions in
society, and lack of power to do anything about it.
B. It is insecurity and unstable homes.
C. It is a wretched existence that tends to per-
petuate itself from one generation to the next.
The poverty line of $3,000 established by the
Social Security Administration, is the minimum level of
income needed to provide the kind of living which is
considered a basic right in the United States and this
level of living is changeable as socio-economic develop-

ment occurs. The poverty index of the Social Security

Administration has critics also. Some critics point out

 

lU.S., President's National Advisory Commission on
Rural Poverty, The People Left Behind (Washington, D.C.:
Government Printing Office, 1967), p. 7. Hereinafter re-
ferred to as President's Commission on Rural Poverty,
People Left Behind.

 

 

that the concept refers only to the current income and
ignores assets. The main emphasis in this approach is
food whereas the housing problem is more critical par—
ticularly for negro families. Another argument is that
this index has no adjustments for income in kind except
for farmers and further adjustment in year-to-year change
in income. Some people do not like it because it ignores
the other satisfactions of life more than money. All
these disagreements are important considerations but to
ignore assets is a serious defect and a simple justifi-
cation for this is non-availability of asset data.
Dorothy Projector and Gertrude Weiss2 show that there
are very few low income households with any significant
assets and similar View has been presented by Arshansky.3
The former writer also thinks that some forms of assets
are not negotiable by people who own them. He further
concludes that: V

All of these criticisms have merit, but let us

start from bottom to top. If money alone will not

solve poverty, without it, nothing else will work

either. It is still a necessary if not sufficient

condition. It should also be remembered that in a
money economy, housing, food and medical care

 

2Dorothy S. Projector and Gertrude S. Weiss, Sur—
vey of Financial Characteristics of Consumers (Washington:
Federal Reserve System, 1966).

 

3Millie Arshansky, "Who's Who Among the Poor,"
Social Security Bulletin, July, 1965, p. 55.

 

received free are not substitutes for things for
which people must have care.4

Therefore, the total money income line will be
considered as a reference point in this study because
it is the only one for which time series by relevant
demographic characteristics are available. However,
other factors like age, location, education, family size,
income variability and such other socio-economic char-
acteristics, will be given due consideration where

appropriate.

Methods of Study

 

When we look at Adam Smith's study about the
wealth of nations and compare it with the present stan-
dards of life, it can easily be said that almost all
nations were poor but so far as disparity between them
is concerned, it was relatively small. Since then, the
different cultural and technological revolutions helped
the world to develop a great deal but very unevenly.

Some nations have become wealthy whereas others continue
to be poor and the disparity has increased not only
between the nations but more severely within the nations.
This disease is not only directed towards the relationship
with human resources but also on other kinds of resources.

This world-wide problem is getting worse day by day. In

 

Ibid.

 

the decade of the 1960's, extensive inquiry about poverty
has been the main concern of some of the economists.

The most affluent society of the world (the
United States) is an important example of disparity
within the nation. Many efforts and considerable
resources have been directed toward escaping from pov-
erty in the last couple of decades. Most of the socio-
economic oriented scientists are busy fighting against
this national ill from different angles at national,
regional, and state levels.

This research work is an effort to explore some
of the dimensions of poverty in the State of Michigan.
It has been generally accepted that urban poverty is
actually rooted in rural areas.5 Therefore, the author
is basically interested in exploring some of the dimen—
sions of poverty in rural counties of the lower penin-
sula of this highly industrialized state. In the lower
peninsula of this state, there are sixty-eight counties
of which seventeen are considered urban counties. These
counties are known as standard metropolitan statistical
areas (SMSA) and the rest of the fifty-one counties are
classified as rural counties. These fifty-one rural

counties are under study in this report. The data and

 

5President's Commission on Rural Poverty, People
Left Behind, p. ix.

 

other information is from secondary sources such as
of the 1960 census.

The first step in this research work is to know
the statistical difference, if any, between the two
groups of counties which have low and high percentages
of poor families. For this analysis, all fifty-one rural
counties are ranked according to percentage of poor
families in each county. To reduce the effect of extreme
ends, five counties from both ends are discarded because
they awkwardly differ from the rest of the counties.‘

The next two groups of counties, No. 6-15 from the upper
half of the counties and No. 35-46 from the lower half,
are selected for this analysis. To calculate the statis-
tical difference, there are forty-two socio-economic
variables which are included. A t,test as a statistical
approach has been run on CDC3600 computer to test the
means.

The next main approach is to know the relationship
between poverty and the different socio-economic charac—
teristics of the poor. For this analysis, all fifty-one
rural counties are included. The percentage of poor
families is considered as dependent variable and thirty
other socio-economic characteristics as independent
variables. For this analysis figures are calculated as
percentages of the total population of the respective

counties. First of all, the data were run on CDC3600

computer to compute simple correlation and regression
analysis.6 After this, the data were run on the delete
routine at 5 per cent level of significance to determine
the most significant variables related with the percentage

7 The step-wise,

of poor families (dependent variable).
add process is used to rank all of the independent
variables according to their respective relationship
with the percentage of poor families which is considered
as the dependent variable.8

To know the distribution of poverty against the
total population and employment opportunities in different

industries against the total employment, the coefficient

of localization approach is used.9

 

6Use was made of a standard program published by
the Michigan State University Agricultural Experiment
Station. Agricultural Experiment Station, STAT Series
Description No. 7: Calculation of Least Squares (Regres—
sion) Problems on the L. S. Routine (East Lansing:
Michigan State University Computer Laboratory, 1969).

 

 

 

7 8

Ibid. Ibid.

 

9The coefficient of localization is a measure of
regional concentration of a given industry compared to
some total system of regions (e.g., national) magnitude.
It may be based on various economic and social indicators
such as population, manufacturing employment, or income.
This coefficient is essentially a comparison of the per-
centage distribution by region of the economic or social
indicator in the given industry with the regional per-
centage distribution of the base magnitude.

 

10

The third step is to evaluate briefly some of the
present anti-poverty policies and their explanation in

the light of the results of the above analyses.

Limitations of the Study

 

As it was decided that this Study would be kept
small and in the nature of a preliminary investigation,
therefore, the state of Michigan is a prime socio-
economic unit to conduct this kind of study. The state
of Michigan is subdivided into three economic strata:
urban counties (SMSA's), the balance of the counties in
the Lower Peninsula, and all the counties of the Upper
Peninsula. As this study is concerned only with rural
poverty, all urban counties are not within the limits
of this study. The Upper Peninsula is also not included
because this area has been considered in very many research
studies. Therefore, this work is limited to the rural
counties in the Lower Peninsula.

The second important limitation of this study
was to use only secondary data. Therefore, most of the
information used in this work is from the 1960 census of
population and some estimates made by different departments

in state government.

ll

 

0000000

00C
.......... :
.............. 0 _s Q
_____ oou: - - - — -' a b
A (_ _ _ - - .1
a s o
000 . RD
IIIIIII “I a
cccccc '
AREA UNDER STUDY “

  
   

   

.
1.

WW ,, ’

wu’p'.

v 33: 3
/% .‘ ....I.'.:‘- "(’4 )
Hwy» .- .. '

2m

 

  

' - _ - o I no .- .
. ., l- v v.” , (no: :uuouu '
r. ' 0 ‘ I
'fi‘fiiifl : I
I.—
r f, A I V L — - - - -
. i ' A "OI I u l I IA '7

.. 46 5‘34,
,fiWM’AW/ 1,

 
     
   

Figure 1.--Area under study.

12

Definition of Terms

 

Standard MetrOpolitan Statistical Area (SMSA).10

 

This term is defined as a county or a group of contiguous
counties which contains at least one city of a 50,000
population or more; or "twin cities" with a combined pop-
ulation of at least 50,000. In addition to the county,

or counties, containing such a city, or cities, contiguous
counties are included in an SMSA, if according to certain
criteria, they are essentially metropolitan in character
and are socially and economically integrated with the

central city.

11

Rural and Isolated Counties. Rural counties

 

in Michigan are all those counties which have populations
of less than 50,000 and no cities larger than 25,000. All
isolated rural counties are defined as those which fit

the criteria for rural counties, have no more than one-
third of the county within a forty-mile commuting distance
of any city larger than 25,000 and do not contain within
their boundaries any federal government defense install-
ations and/or state supported four-year degree granting

institutions.

 

10Synopsis of information presented in U.S.,
Department of Commerce, Bureau of the Census, U.S. Census
of Population, 1960 (Washington, D.C.: Government Print—
ing Office, 1960), pp. vi-vii.

 

 

llIbid.

13

Aggregated Income of the Population.12 Income

 

is the sum of money received in one year (less losses)
from the following sources: wages or salary, net income
(or less loss) from self-employment net income (or loss)
from rent or receipts from roomers or boarders; royalties;
interest, dividends and periodic income from estates and
trust funds, social security benefits; pensions, vet-
eran's payments, Armed Forces allotments, insurance,

and public assistance or other governmental payments

who are not members of the household; alimony, and
periodic receipts from insurance policies or annuities.
The figures represent the amount of income received
before deductions from personal income taxes, social

security, bond purchases, union dues, etc.

Families, 1960.13 A family consists of two or

 

more persons living in the same household and related to
one another by blood, marriage, or adoption; all persons
living in one household and related to one another are
regarded as one family. Not all households contain fami-
lies, because a household may be composed of a group of

unrelated persons or one per family--for example, two

 

12 13

Ibid. Ibid.

14

family groups in the same household with no member of

one family related to any member of the other family.

14

Income of Families, 1960. Families' incomes

 

represent, as a single amount, the combined incomes of
the head of the family and all other members fourteen
years and over. Although the time period covered by the
income statistics is the calendar year 1959, the income
figures for families refer to April, 1960. Thus, on the
one hand, family income does not include amounts received
by persons who were members of the family during all or
part of the calendar year 1959, if these persons no
longer reside with the family in April, 1960. On the
other hand, family income includes amounts reported by
related persons who did not reside with the family
during 1959 but who were members of the family in April,

1960.

15

Household. The definition for "household"

 

includes all persons occupying a house, an apartment, a
group of rooms, or a single room regarded as a dwelling
unit. Therefore, a single person, family, or unrelated
person living in a dwelling unit are all taken into

account by the term household. It would be noted that

 

14 15

Ibid. Ibid.

 

15

persons living in group quarters (such as an insti-

tution) are not enumerated in the household definition.

Un-related Individuals.l6 The term "unrelated

 

individuals" is used to "refer to persons (other than
inmates of institutions) who are not living with any

relatives."

Public Welfare Assistance.l7 Public welfare

 

expenditures cover governmental activities related to
institutional and non-institutional assistance to the
needy. They include cash payments, aid to dependent
children, aid to the blind, and aid to the disabled;
vendor payments made to private purveyors for medical
care, burials, and other services provided under wel—
fare programs; welfare institutions; and any other
inter-governmental or other direct expenditures for

welfare purposes.

18

Farm-Nonfarm Residence. The rural population

 

.is subdivided into the rural-farm population, which

comprises all rural residents living on farm and the

 

l6Ibid.

17

release.

Michigan Social Welfare Commission, special

18U.S., Department of Commerce, Bureau of the

Census, U.S. Census of POpulation, 1960: Michigan General
Social Characteristics (Washington, D.C.: Government
Printing Office, 1960), p. viii.

l6

rural-nonfarm population, which comprises of the remain-
ing rural population. In the 1960 Census, the farm
population consists of persons living in rural territory
on places of ten or more acres from which sales of farm
products amounted to $50 or more in 1959 or on places of
less than ten acres from which sales of farm products

amounts to $250 or more in 1959.

Employed Persons.19 Employed persons comprise all

 

civilians fourteen years old and over who were either;

(a) "at work"--those who did any work for pay or profit,
or worked without pay for fifteen hours or more on a
family farm or in a family business; or (b) were "with

a job but not at work"--those who did not work and were
not looking for work but had a job or business from which
they were temporarily absent because of bad weather,
industrial dispute, vacation, illness, or personal

reasons .

Unemployed.20 Persons are classified as unem-

 

ployed if they were fourteen years old and over and not
"at work: but looking for wor ." A person is considered

as looking for work not only if he actually tried to find

 

19.1.1231.” P- xiX- 20Ibid.

17

work during the reference week but also if he had made
such efforts recently and was awaiting the results of

these efforts.

Labor Force.21 The labor force includes all per-

 

sons classified as employed or unemployed, as described
above, and also members of the Armed Forces. The "civ—
ilian labor force" comprises only of the employed and

unemployed who have had previous work experience.

Property Value Per Capita.22 The total value of

appraised property in each unit divided by the total

1960 population of that unit.

Property value Per Acre.23 The total value of

appraised property in each unit divided by the total land

area of that unit.

 

ZlIbid.

22Abram P. Snyder and Joseph Lepczyk, 1968 Value

of Taxable Property in Michigan (East Lansing: Institute
for Community DevelOpment and Services, Continuing Edu—
cation Service, Michigan State University, July, 1969),
p. 3.

 

23Ibid.

18

General County Revenue.24 General revenue

 

includes all revenues except utility, liquor stores, and
insurance trust revenue. All tax collections and inter-
governmental revenue, even if designated for insurance
trust or local utility purposes, are classified as

general revenue.

 

24U.S., Department of Commerce, Bureau of the Cen—

sus, Census of Government, 1962, Compendium of Government
Finances, Vol. IV, No. 4 (Washington, D.C.: Government
Printing Office, 1962).

CHAPTER II

REVIEW OF LITERATURE

Poverty has been recognized as a national problem
and people oriented sociologists and economists in the
government as well as in academic institutions have been
concerned to expose the various aspects of this problem.
Until now the research work in this field is spotty and
needs a lot more efforts to understand this problem
thoroughly. The review of the previous studies concerned
with this work is presented under the following groups:
(1) concept and definition of poverty, (2) importance of
poverty in question to economic society, and (3) policy

for improvement.

Concept and Definition of Poverty
9 In 1966, Oscar Lewis mentioned in the introduction
of his book that poverty and culture of poverty are two
different concepts.1 He explains that cultures of pov-

erty are patterns of adaptation to common problems which

 

lOscar Lewis, "The Culture of Poverty," Intro-
duction to the author's book, LaVida: A Puerto Rican
Family in the Culture of Poverty (New York: Random House,
Octdber, 1966).

19

20

are culturally transmitted and several factors are held
responsible for the mergence of the culture of poverty
such as cash economy, unemployment, low wages and low
levels of living and organization. The culture of pov-
erty is characterized by specific patterns with regard
to the institutions of the larger society, its way of
life, its system and individual psychology bred by
socialization in cultural surroundings.

Bonnen2 argues in the paper he presented in the
Third National Extension WOrkshop in Community Resource
Development that poverty is not only a material shortage
but it has psychological effects. He says that-~when
everyone is and has been poor there is no sense of depri-
vation or failure. When some prosper and develop their
human capacities while others do not, a great psychic
malaise sets in-—when a consciousness of deprivation pre-
vails for years in the same community, individual self-
confidence and ego collapse, and an expectation of failure,
a self-hatred and general hopelessness becomes endemic.
Add racial discrimination and repeatedly broken public and
private promises to right social wrongs, and have rising

levels of individual and community bitterness, frustration

 

2J. T. Bonnen, "Progress and Poverty: Community
Resource Development," Proceedings of the Third National
Extension Workshop in Community Resource Development
(East Lansing: Department of Resource Development,
Michigan State University, 1968).

 

 

21

and desperation and you will find that violence is an
irrational but logical release.

"The People Left Behind," a report by the Presi—
dent's National Advisory Commission on rural poverty,
was released in 1967. The Commission was assigned to
explore the following aspects of rural life in the
United States.

1. To study the present economic conditions and

trends.

2. To study the possibilities of coordination of
the existing programs, policies and such
other activities for economic status and for
general welfare of rural population; and to
evaluate the directions of such activities
so as to reduce unemployment, and improve
incomes and standards of social services in
rural areas.

3. To develop recommendations so that the local,
state, or federal government and private
enterprise could take action.

The Commission argues for the concept--and the
reality of poverty that--poverty is partly inadequate
income but it goes much deeper than that. Poverty affects
the mind and spirit as well.

As it has been mentioned earlier, income is impor-

tant in escaping from poverty though not the whole answer.

22

Education and jobs are also essential, and they can lead
to higher income. Income is obviously needed to buy the
food, clothing, housing, schooling and health services
required by anyone in this money economy if he is to
escape from poverty--if he is to preserve some self-
esteem.

The Commission further reveals that poverty is
much more than this.

-Poverty is lack of access to respected positions in
society, and lack of power to do anything about it.
-Poverty is insecurity and unstable homes.

-Poverty is a wretched existence that tends to per-
petuate itself from one generation to the next.3

The nature of poverty as E. W. Jones revealed
in his paper presented at the Annual Conference of the
Southern Economic Association.

The average American continues to emphasize the
physical aspects of poverty . . . the lack of food,
clothing, shelter and medical services. The poor «//
are still categorized into two groups . . . the
deserving poor and those who deserve to be poor.

The deserving poor are those suffering temporary
setbacks because of structural changes in the

economy or physical infirmities. Those who deserve

to be poor are those who are lazy or lacking in
achievement aspirations.4

 

President's Commission on Rural Poverty, People
Left Behind, p. 7.

 

4 I
E. W. Jones, 'Nature and Extent of Rural Poverty,"

Papers on Rural Poverty (paper presented at the Annual
Conference of the Southern Economic Association, The Agri-
cultural Policy Institute, School of Agriculture and Life

Sciences, Raleigh, North Carolina State University, March,
1969), p. 1.

23

A. J. McKnight testified at a hearing before the
National Advisory Commission that:

. . . the culture of poverty in underdeveloped
people have developed a culture of poverty--The
poor think differently; they have a different sense
of values--Take the concept of education: To the
middle class it stands for the road to better things
for one's children and one's self. To the poor it is
an obstacle course to be surmounted until the children
can go to work . . .

The poor tend to be fatalistic and pessimistic
because for them there is no future; everything is
today. They do not postpone satisfaction. When
pleasure is available, they tend to take it imme-
diately. They do not save, because for them there
is no tomorrow.5

Simmel6 analyzes the concept of poverty, not in
terms of deprivation, but as a social category over time
and among different societies. He begins by showing the
fundamental dualism that exists in relation to assistance
to the poor: the "rights" of the poor versus the "inter—
individual genesis of duty," i.e., the right of the poor
to get assistance and the obligation of the giver to
assist. The right to assistance is as fundamental a
human right as is the right to work and the right to live.

Hanna H. Meissner stated:

The American philosophy stressed that in a society
where there is work for all, nobody needs to go

hungry. Labor and work are values in their own
right; anyone who is willing to exert enough effort

 

5President's Commission on Rural Poverty, People

Left Behind, p. 8.

 

6George Simmel, "The Poor," Social Problems, XIII,
2 (Fall, 1965).

 

24

can acquire a certain level of material well-being.
Poverty was an individual matter, and only indi-
viduals could overcome it. There was extreme
individualistic interpretation of poverty and
negates any obligation of society to help the poor.

Moynihan8 thinks that poverty today is distinc-
tive as compared with the past because during the settle-
ment in the United States the immigrant suffered from
poverty which he thought was a temporary phase and
looked forward to the day when he or his children could
gain a greater access to opportunity and financial
resources. The author further argues that:

. . . the poor of today are more inclined to regard
poverty as a permanent way of life with little hope
for themselves or their children. This change in
the outlook of the poor can be explained by changes
in the opportunity structure. The poor of old had
aspirations; the poor today do not. The poor of old
had culture; the poor today have only culture of
poverty. The poor once had political machines that
protected them; now they have only social workers
who spy on them.9

Antonovsky and LernerlO conducted a study on "Occu-

pational Aspirations of Low Class Negro and White Youth,"

 

7Hanna H. Meissner, ed., Poverty in the Affluent
Society (New York: Harper and Row Publishers, 1966),
p. l.

 

8D. P. Moynihan, ed., On Understanding Poverpy
(New York: Basic Books, Inc., 1969.

91bid.

OAaron Antonovsky and Melvin J. Lerner, "Occu-
pational Aspirations of Low Class Negro and White Youth,"
Social Problem, VII (Fall, 1959), 132-38.

25

in which they concluded that Negroes have a higher level
of aspiration than whites of comparable socio-economic
statues. Negroes see achievement via education, have
more positive attitudes toward school and expect more

of themselves than comparable whites.

Another study was conducted by Richard P. Boyle11
to measure the effect of the high school on students'
aspirations. He revealed that attending a high status
school affected students' aspirations but all such
schools were found in larger metropolitan areas.

There is another study which was also conducted
to show the sources of educational aspirations among the
working class youth in which the data agrees with
previous findings that the educational aspirations of ///
the working class are lower than the middle class.
College-oriented working class students who had friends
with similar aspirations were more likely to be active
in extra-curricular activities and were more likely to

be attending a middle-class school.12

 

11Richard P. Boyle, "The Effect of the High School

on Students' Aspirations," American Journal of Sociology,
LXXI (May, 1966).

 

12Irving Krauss, "Source of Educational Aspira-
tions Among Working-Class Youth," American Sociological
Review, XXIX (December, 1964).

 

26

Smolensky13 comments on the dilemma of past and
present poor and he argues that--poverty has a meaning that
varies over time and this is reflected in the way poverty
is measured-—He explains two kinds of yardsticks which
are commonly used to measure the poverty in the United
States. The first measure is known as "minimum-decency"
level which is based on humanitarian precepts and the
second measurement depends on equalitarian precepts which
gives the idea of the proportion of eXpenditures of the
lowest income groups. He says, while using these defi-
nitions, the results show that poverty is declining and
seems to be completely eliminated in the present century.
But he himself argues that the income of the lower income
group (poor) has not increased proportionally in this
country and he further thinks that the socio-economic
characteristics of the population in poverty have not
been changed much in this century. He concludes the
following:

. . . having abandoned as irrelevant a biological
definition of substinance as the criteria by which
individuals would be classified as poverty-stricken
along historical study requires a poverty measure
based on a series of different market baskets. These
market baskets are very likely to represent a rising
level of econondc welfare. That poverty is, to some

extent, a relative matter is inherent in the rejection
of biological subsistence as the definition of poverty.

 

l3E. Smolensky, "The Past and the Present Poor,"
in Chamber of Commerce of the U.S., Task Force on Eco-
nomic Growth and Opportunity, The Concept of Poverty
(Washington, D.C.: Chamber of Commerce, Report No. l,
1965).

 

27

To the extent that statistical measures based on
need show a decline in poverty, that decline will
have been achieved in the teeth of a rising defi-
nition. This being the case, it is foolish to
expect the complete elimination of poverty.14

Dunlop,15 while describing his definition and way

of measuring poverty, quoted Benjamin Franklin's idea

and the illustration of the Ad Hoc Committee on the Triple

Revolution which are two opposite concepts of poverty.
Benjamin Franklin said:

I am for doing good to the poor, but I think the

best way of doing for the poor is not making them
easy in poverty, but leading or driving them out

of it. In my youth, I traveled much and I observed
in different countries, that the more public pro-
visions were made for poor, the less they provided
for themselves, and of course, became poorer. And,
appeared on the contrary. The less that was done

for them, the more they did for themselves and became
richer.

Ad Hoc Committee on the Triple Revolution illus-
trates:

The crux of the proposal is that jobless income

would be guaranteed; an office of guaranteed income
would stand ready to provide the agreed minimum
income without question to any jobless applicant.
Incentives to work would have to be revolutionized:
the threats of poverty, starvation or even a means
test would no longer be available as goods. Employers
would have to make work more attractive; the bargain-
ing position of employees-~even as individual-~would

 

l4Smolensky, "Past and Present Poor," p. 41.

15J. T. Dunlop, "Poverty: Definition and Measure-
ment,‘ in Chamber of Commerce of the U.S., Task Force of
Economic Growth and Opportunity, The Concept of Poverty
(Washington, D.C.: U.S. Chamber of Commerce, Report No. l,
1965), p. 95.

 

28

be much stronger. The economy would have a vast
new built-in stabilizer along with considerable
disruption of the labor market.

While considering these two opposite concepts
Dunlop favors the first one because it has been in terms
of the philOSOphical choice between the two extremes.

1. Driving them out of poverty.

2. Guaranteeing them out of poverty.

He further says concerning the problem in the defi-
nition and measurement of poverty that it is not essential
to have a defined definition in very many cases; therefore,
it is advisable just to consider simply the "bottom end"
of the income distribution because there are not many
different characteristics among those who are considered
bottom fifth, fourth, or third of the income distribution.

V. R. Fuchsl6

says that poverty refers to an
insufficiency of material goods and services while con—
sidering the poverty on economical bases but there are
other kinds of poverties, too, like "spiritually impov-
erished," "morally bankrupt," or "poor health," but he
thinks that this definition needs more classification
before it could be practiced. He illustrates that a

miser poor may have insufficient food, clothing and

shelter but most people do not think him poor. It means,

 

16V. R. Fuchs, "Toward a Theory of Poverty," in
Chamber of Commerce of the U.S., Task Force of Economic
Growth and Opportunity, The Concept of Povergy (Washington,
D.C.: U.S. Chamber of Commerce, Report No. l, 1965).

 

29

it is not the possession of material and services, but
the ability to command them. Therefore, it is a short
jump to saying that income is the test of poverty. He
further says that to back up this jump there are some
other hurdles to be cleared. First of all, he thinks
that there is more satisfaction than money and a second
consideration is difference in prices. There are other
problems which could be mentioned here but the above
mentioned are enough to think that money income can
be an imperfect measure. But for the time being, it is
the only available approach for our purposes; therefore,
it can be used while giving due consideration to the
above stated problems.
Harry G. Johnson says that:
. . . poverty in the usual sense may be defined as
existing when the resources of families or indi-
viduals are inadequate to provide a socially
acceptable standard of living. Both the specifi—
cation of what standard of living should be regarded
as socially acceptable (the poverty standard) and the
measurement of the resources available to people for
comparison with what standard, in order to evaluate
the size and shape of the poverty problem, bristle
with difficulties. . . .17
Defined in this way--as inadequacy of financial

resources or "income" poverty inevitably has a multi-

plicity of causes, or, to put the same point another

 

17Harry G. Johnson, "Unemployment and Poverty," in
Poverty Amid Affluence, ed. by Leo Fishman (New Haven:
Yale UniVersity Press, 1966).

 

30

way, the poor have no unique common characteristics that
distinguish them from the non—poor other than their
poverty itself.

There is a review of the psychological literature
relating to the ego development of children from econom-
ically and racially segregated families in which one can
draw the conclusion that school problems encountered by
Negro children in school are more the result of family,
environmental, and subcultural factors than the fault of
the educational system.18

Miller's study of "Low Class Culture as a Gener-
ating Milieu of Gang Delinquency," revealed that lower
classes are seen as forming a distinctive cultural sys-
tem in which the main concerns are trouble, toughness,
smartness, excitement and autonomy as a substitute con—
cept for values.19

Becker's article about "Social Class Variation
in the Teacher—Pupil Relationship," stated that teachers

complained that they derived no sense of reward from

teaching Class III (the poor class). They further said

 

18David P. Ausubel and Pearl Ausubel, "Ego Devel-
0pment Among Segregated Negro Children," in Education
in Depressed Areas, ed. by A. Harry Passow (New York:
Bureau of Publication, Columbia University, 1963).

 

 

19Walter B. Miller, "Low Class Culture as a Gen-
erating Milieu of Gang Delinquency," Social Survey Review,
XIV (1958).

 

31

that Class II (moderate economic status) children were
the ones that gave them some satisfactions as they were
nice but not bright; Class I (upper economic class)
children were the ones that gave them the greatest
sense of accomplishment. Regarding discipline, they
reported that they have more trouble with Class III
than with any other.20
Another study revealed that the attitudes towards
schools, teachers, programs, and the values of education
did not differ significantly by income groups. Dif-
ferences by income groups were found in attitudes per—
taining to social life, being liked by other pupils and
personal interest in teachers.21
Another study revealed that economic and social
factors play an important role in helping to determine
which children graduate from high school and enter col-
lege. After entering college, the chances of graduating
were much more dependent upon ability and much less on

family background.22

 

20Howard S. Becker, "Social Class Variation in
the Teacher—Pupil Relationship," Journal of Educational
Sociology, XXV, 8 (April, 1952).

 

 

21John K. Coster, "Attitudes Toward School of
High School Pupils From Three Income Levels," Journal of
Educational Psychology, XLIX (1958).

 

 

22Dale Wolf, "Education opportunity, Measured Intel-
ligence, and Social Background," Education, Economy, and
Society, New York, 1961.

32

The United States Department of Health, Education
and Welfare23 investigated that the poverty is declining
during a unique period of sustained economic expansion
and because of increased governmental efforts to alleviate
the problem. In some groups this decline is remarkable
but the past trends suggest that this problem is not
likely to disappear in the near future.

Importance of Poverty to the
Economic 81:11de

 

 

For the causes of poverty, peOple generally blame
either the poor or the society because in some instances
the individual may be lacking in ambition, initiative, or
willingness to work while in other cases the society may
have failed to provide the proper socio-economic environ-
ments for the development of human resources. The cause
of this problem is not a simple or a pinpoint phenomenon,
but it is a compound interrelationship of different fac-
tors. From the society's point of View unemployment, sub-
stitution of capital and technology for labor, depletion
of natural resources, discrimination in sharing the eco-
nomic function, and inflationary practices are generally
responsible for this problem. On the other hand, lack of

education, poor health, high birth rate, age, broken

 

23U.S., Department of Health, Education and Wel-
fare, Toward a Social Report (Washington, D.C.: Government
Printing Office, January, 1969).

 

33

family institutions and occupational and racial dif-
ferences, are the important factors on the part of indi-
viduals, to add to the severeness of the problem. These
factors are not independent, they are interrelated; and
the cure of poverty needs close cooperation on the part
of both the individual and the economic system.

The Council of Economic Advisors concluded that
poverty includes ignorance, disease, delinquency, crime,

24

irresponsibility, immorality, and indifference which

generally is considered as the major threats to a certain
economic society. The existence of poverty is asso-
ciated with the waste of resources and social ills which
are the costs not only to the individuals but to the
economic society as a whole.
Jerry G. West, looking at the relationship of
poverty to the economic society said:
Probably the greatest cost of poverty to society is
that represented by the human resources which are
wasted. The poor who are unemployed or underemployed
are obvious illustrations of such loss to society.
Likewise, those whose productivity is low, even
though working full—time, because of low levels of
education or lack of training, represent waste

relative to what the situation might have been--
society must also bear much of the cost of the

 

24The Annual Report of the Council of Economic
Advisors (Washington, D.C.: Government Printing Office,

1964), . 55.

 

34

juvenile delinquency, civil disorders, crime, alco-
holism, mental illness, physical defects, and chronic
illness often associated with poverty . . .

President Johnson's National Advisory Commission

on Civil Disorders concluded that:

The culture of poverty that results from unemploy-
ment and family breakup generates a system of ruth-
less, exploitative relationships. . . . Prostitution,
dope addiction, and crime create an environmental

'jungle' characterized by growing up under such con-
ditions are likely participants in civil disorder.26

West27 believes that the important factor which

is the rapid technological development in agriculture is V/
responsible for rural poverty because this forced the
rural population to seek employment in other sectors of
the economy. Therefore, human resources suffered from
unemployment and underemployment. He further says that
there is underinvestment in the human resources; there-
fore, the quantity and the quality of education and

social development approaches have been much inferior

as compared with urban areas.

 

25Jerry G. West, Poverty: Its Meaning and Its
Causes With Selected Case Studies (Raleigh: Ag. PoIicy
Institute, School of Agriculture and Life Sciences,
North Carolina State University, July, 1968), p. 153.

 

 

6Report of the National Advisory Commission on
Civil Disorders (New York: Banton Book, Inc., 1968), p. 14.

27Jerry G. West, "Evaluation of the People Left
Behind," Papers on Rural Poverty_(Raleigh: Ag. Policy
Institute, North Carolina State University, March, 1969).

 

35

Stanley Masters28 conducted a study in which he
measured the effect of family income on children's edu-
cation in which he stated that children of little edu-
cation and low income parents have more than twenty
times greater chance of dropping out or falling behind
in school than the children whose parents are well-to-do
and both parents have high school education and had grad-
uated.

A study was conducted in 1960 in which the author
concludes that the majority of Americans are moderately
satisfied with their work. Occupational prestige is the
best index of satisfaction; aSpects such as control over
the technical and social environment, integrated work
groups, and occupational communities are among the pre—
conditions for job satisfaction in the American economic
society.29

An exploratory study was made of the employed
population of a poverty area of Washington, D.C. which
revealed that marginal families heads' incomes were not

higher than incomes of the poor families but the size

of the families were slightly larger than the poor

 

28Stanley H. Masters, "The Effect of Family Income

on Children's Education," Journal of Human Resources, IV,
2 (Spring, 1969).

 

29Robert Blauner, Work Satisfaction and Industrial

Trends in Modern Society, Report No. 151 (Berkeley: Insti-
tute of Industrial Relations, University of California,
1960).

 

36

families. The proportion of Negroes in poor families
was higher than in marginal families. The heads of
poor families were younger;30 therefore, it can be
imagined that if this trend continued, how it will
effect the society.

Bernard31 discusses the relation between the
individual's inner processes and his social environment,
in which she describes the importance of comprehensive
community mental health projects in an anti-poverty pro-
gram. She emphasized the "unconscious problem" which may
contribute to the distress of the disadvantaged, who

are economic failures in an affluent society.

Policies to Alleviate Poverty

 

It was realized that a national action should be
taken since a few decades when the President, Franklin
Roosevelt stated, one-third of the nation was ill-housed,
ill-clothed and ill-fed. Many of his programs for
recovery involved the manipulation of planned economic
scarcities. The concept of full employment, universal

adequate minimum income which are basic to present-day

 

30Charles v. Willie and Walter E, Riddick, "The
Employed Poor: A Case Study," in Poverty as a Public
Issue, ed. by Ben Selligmen (New York: The Free Press,
1965).

31Viola W. Bernard, "Some Principles of Dynamic
Psychiatry in Relation to Poverty," The American Journal
of Psychiatry, XXII (September, 1965).

 

37

concept of poverty, was not widely heard until the middle
of the present century. As the administration of the
social system changed, different programs have been
tried against poverty (e.g., social security and
insurance programs, area resource development, com-
munity resource development and war against poverty).
Most of the early efforts gave importance to the 3‘
urban poverty but the National Association for Community

Development, criticized the existing approaches and drew

 

attention to rural poverty. The Association further
exposed the unfair division of prosperity of an affluent i
economy in the form of ineffective resource develOpment
programs in the rural areas.
The President's National Advisory Commission on
Rural Poverty unveiled a number of dimensions of rural
poverty and criticized the previous anti-poverty efforts.
The Commission stated:

Until the past few years, the Nation's major social
welfare and labor legislation largely by-passed
rural Americans, especially farmers and farm workers.
Farm people were excluded from the Social Security
Act until the mid-1950's. Farmers, farm workers and
workers in agriculturally related occupations are
still excluded from other major labor legislations,
including the unemployment insurance programs, the
Labor Management Relations Act, the Fair Labor
Standards Act and most State Workmen's Compensation
Acts.32

 

32President's Commission on Rural Poverty, People
Left Behind, p. ix.

 

38

The Commission further emphasized the need of
appropriate measures for solving the problem of rural
poverty which is increasing urban poverty. Agricultural
price support programs are considered to help the farm

33 concluded in their

population. Learn, Cox and Herder
study that agricultural price support programs are not
effective to improve the income situation of farmers
because very many farmers do not have sufficient pro—
ductive resources to earn an adequate income. They sug-
gested consolidation of farms to make economic units
because in the existing situation farm labor is not
sufficiently productive.

Jerry West concludes in his evaluation of The

People Left Behind that:

 

. . . Much of the underemployment in rural areas
can be traced to inadequate monetary and fiscal pol-
icy, imperfection in the labor market, and lack of
economic development in rural areas . . .

Another factor which must be considered is the
combination of programs developed by the federal
government to support prices and incomes of farmers.
Although certainly of importance to the commercial
sector of agriculture these programs have done little
to improve the plight of the rural poor . . . 34

 

33Elmer W. Learn, Rex W. Cox, and Richard J.
Herder, Upper Midwest Agriculture: Alternatives for the
Future, Study Paper No. 6 of Upper Midwest Economic Study
(Minneapolis, Minn.: University of Minnesota, 1962).

34West, "Evaluation of People Left Behind,"
Papers on Rural Poverty, p. 13.

 

 

39

For the regional and community economic develop-
ment, West also emphasized the coordination of federal
programs as Office of Economic Opportunity and Coopera—
tive Extension Service in the U.S.D.A.

E. Walter Jones writes in his article about the
concept of adequate income. He says that poverty is a
crippling phenomenon and income is a necessary, but
totally insufficient, solution to the problem. He
further argues that:

The relationship of rural poverty to the income
and social system in this country must be taken into
account if an effective solution is to be found. The
answers to the problems of poverty are not dependent
upon a compassionate people and an emotional response
to the vagaries that are identified with it. The
economic and social system itself must be adjusted
so that it is capable of relating effectively to
poor people. Therefore, if we are to do something
about effecting a permanent solution to the poverty
problem, we must bring about changes in the function-
ing of basic institutions in this country. The
patchwork of poverty programs outside the institu-
tional structure will not do the job. . . . The process
of economic growth has spun off many of the people
who are in poverty and rendered them nonfunctional.
The educational and manpower institutions have not
been geared to deal with these marginal human
resources in developing their capacity to cope
with their social and economic environment . . .

In a non-technological age, it was easier for
people to pull themselves up by their own bootstraps
and overcome environmental handicaps. However, with
the explosion of knowledge and the complexities of
today's world, the educational deprivation in the
home and community. We must not, however, think that
we can deal with this problem by setting up a new

 

40

set of institutions. The challenge is to adjust the
basic institutional structure of this country . . . 5

For the regional development and the rural pov-
erty, Niles M. Hansen evaluates the policy of the Presi—
dent's Advisory Commission on Rural Poverty as:

The regional policy of the President's Advisory
Commission on Rural Poverty is based on the assumption
that the social costs of bringing industry to rela-
tively poor regions would be less than the social costs
involved in the migration of workers and increased con-
gestion and unemployment in industrial areas. How-
ever, there is no convincing evidence that government
controlled programs can attract enough industry to

the countryside to provide people everywhere with

jobs in proximity to their places of residence. On

the other hand, federal programs to influence the i

 

quality of human resources in lagging rural areas

benefit the people of these regions and the nation

as a whole. Opportunity cost considerations favor

federal subsidies for investment in education,

health, and training in lagging regions . . .

Anti-poverty strategy of adequate minimum income

through the various social security and social service
measures have often been criticized. Two main objections
are often raised to guarantee annual income and President
Johnson's policy "war on poverty." The first objection

is related to incentive and the second is inflation. Some

of the economists think that if the people were guaranteed

 

3SE. Walter Jones, "Nature and Extent of Rural
Poverty," in Papers on Rural Poverty presented at the
Annual Conference of the Southern Economic Association
(North Carolina State University: Agricultural Policy
Institute, March, 1969), pp. 7-8.

 

36Niles M. Hansen, "Regional Development and the
Rural Poor," in the Journal of Human Resources, Institute
for Research on Poverty (Madison: University of Wisconsin
Press, IV, 2, 1969).

 

41

annual income they would no longer try to improve them—
selves. David Hamilton criticizes this concept and
argues that:

. . . Undoubtedly some individuals might choose to
at the minimum--but that the vast majority possess-
ing such minimum income would lose all incentives to
rise above it which is a very doubtful proposition.
Can anyone seriously believe that a family of four
with approximately $3,000 in guaranteed income would
lack incentive to seek employment to add to this
income and to their level of living? The truth is
most probable, that a guaranteed income would give
new hope to those benefitted and raise new aspir-
ations . . . 37

Inflation, which is the second common objective,
has been heard often in the second half of the last
decade and the necessity of cutting back the anti-poverty
programs particularly war on poverty, because of its
inflationary effect in the country. David Hamilton con-
cludes again this idea as:

. . . the expenditures on the war on poverty is
no more inflationary than the new net investment on
night clubs or baseball stadiums or wars. A dollar
spent on poverty has the same effect on the price
level as a dollar spent on anything else.

. . . Expenditures for cigarettes and liquor were
an inflationary force several times greater than the
war on poverty.

If, however, a guaranteed annual income were
introduced as a means of resolving poverty, the
expenditures would be larger and its inflationary
effect potentially greater than that of the current
war on poverty.38

 

37David Hamilton, A Primer on the Economics of
Poverty (New York: Random House, 1967), p. 114.

38Ibid., pp. 115-16.

 

42

Education is another important antipoverty
strategy, it is significantly established evidence that
the investment in education is important as a means to
developing the human resources which are known as human
capital. This human capital is essential to increase
income.

While evaluating how education can help reduce $1
poverty, Carroll39 says that education is a helpful anti-
poverty strategy because it is not only a means of trans-

ferring wealth but also helps promote economic growth.

 

1
Education is wealth which cannot be sold, stolen, or i,
destroyed easily except by death of the possessor or
complete deterioration of his or her mental health. Edu-
cation can increase the ability for better allocation of
resources to improve the welfare. Education helps to
develop attitudes toward work, social institutions and
patterns of consumption and production which can help
to reduce the differences between behavior of individuals
and the society. An educated society is more likely to
be responsible and motivated enough to improve welfare.
Benefit-cost analysis is a common process to measure the
return of investment in education which has been used

by economists.

 

39

A. B. Carroll, "Education for Reduction of Rural
Poverty,‘ Papers on Rural Poverty, presented at the Annual
Conference of’Southern Economic Association (North Caro-
lina State University: Agricultural Policy Institute, 1969.

 

43

The President's National Advisory Commission on
Rural Poverty recommends that relocation programs be
established in the Department of Labor and provide
their relocation assistance to the disadvantaged workers
who cannot find proper employment where they now live,
but for whom jobs and training opportunities can be

located in other labor market areas.40

 

F

This recommendation of the Commission refers to g
relocating the worker to an area where employment is g
available and provides them financial assistance which +
includes transportation costs of the family and the cost g

of the removal of household goods, and a starting allowance
to support the family until the time that the bread winner
gets his first pay check. This recommendation of the
Commission that financial assistance be given to the
relocaters, Schnitzer comments that:

. . . in order to have a high rate of economic
growth, there has to be a high degree of labor
mobility; . . . High mobility of labor as well as
capital characterizes the purely laissez-fair
economy. Yet in the mixed economies of today,
government intervention is directed toward the
mobility of capital, leaving market sources to
determine the mobility of labor. The assumption is
that capital needs the inducements to locate a par—
ticular area, but labor needs no particular induce-
ment to leave the area.

This reasoning, when applied to the type of per-
son, relocation assistance is designed to help, and
is absolutely wrong. The person who has been uneme
ployed over a long period of time, or is making an
income of less than $3,000 a year, usually does not

 

4OPresident's Commission on Rural Poverty, People
Left Behind, p. 35.

 

44

have the financial resources to support a move to

an area where employment is available. He is also

not aware of job opportunities elsewhere. Lack of

financial resources and knowledge of existing employ-

ment opportunities are deterrents to labor mobility.41

He further argues that the movement of unskilled

labor from the rural areas to the industrial areas will
complicate the socio-economic problems which already
exist in such industrial areas. He also says that there

is already labor mobility from rural areas, without any

significant effort, which is adding and creating socio-

' I. 7K". L‘L:o_-.——E

economic problems particularly in big centers. He argues g

 

that this move should be stopped and there should be new Ea
factories put in the depressed areas and better edu—
cational facilities should be provided for rural youth.

Industrialization of the poverty-stricken rural
areas is commonly heard as an anti-poverty policy but
questions arise about how industry can be shifted eco-
nomically? Should it be the private sector; factor pay—
ment or public sector-—transfer and investment? The
second question is that, will it help the poor? Bryant
concludes this about the strategy based on his micro
analysis:

Factor payments to capital and the effects on immi-
gration appear to me to the major private sector

 

41Martin Schnitzer, "An Approach to the Amelio-
ration of Rural Poverty: Migration and Relocation,"
Papers on Rural Poverty (paper presented at the Annual
Conference of the Southern Economic Association, The Agri—
cultural Policy Institute, School of Agriculture and Life
Sciences, Raleigh, North Carolina State University, March,
1969), p. 45.

45

leakages diminishing the impact of industrial growth
on the poor. Leakages from the public sector effects
appear to revolve around the proposition of invest-
ment in public overhead capital which constitutes
investment in human capital; the higher the propor-
tion, the smaller the leakage. If the efforts to
industrialize a poverty-stricken rural area succeeds
only in raising the income level, then some fraction
of the increase in income goes to the poor. It is
likely that the fraction will decline through time
as immigration continues for capital labor ration of
new capital rises, and as the unemployed as fraction
of the total poor in the area increases.

 

F1
He further says that there are two dilemmas in the :
minds of the policymakers to execute the poverty policy,
"first it is posed by the Anderson analysis43 which indi-
cates that the effect of the national economic growth on g;

poverty declines as economic growth proceeds. The second
dilemma is posed by Phillips'44 curbe analysis which indi-
cates that the unemployment rate can be pushed down only

at the cost of a higher rate of inflation.

 

42W. K. Bryant, "Industrialization as a Poverty
Policy: Toward a Micro Analysis," Papers on Rural Poverty
(paper presented at the Annual Conference of the Southern
EconOmic Association, The Agricultural Policy Institute,
School of Agriculture and Life Sciences, Raleigh, North
Carolina State University, March, 1969), p. 81.

 

43W. H. Locke Anderson, "Trickling Down: The
Relationship Between Economic Growth and the Extent of
Poverty Among American Families," Quarterly Journal of
Economics (November, 1964).

 

 

44G. L. Perry, "The Determinants of Wage Rate
Changes and the Inflation--Unemployment—-Trade—Off for
the United States," Review of Economic Studies, XXXI, 88
(October, 1966).

46

After reviewing the above literature on poverty,
one can conclude that different characteristics of the
poor like color or race, age or sex, geographic location,
type of employment or lack of job Opportunity, should
never divert anyone from the one universal characteristic

of all the poor: they do not receive enough income in

 

money and other forms to cross the poverty line.

 

The poor have been widely known to generations of
economists who briefly stated in the following, which is
still applicable:

This association of poverty with progress is the
great enigma of our times. It is the central fact
from which spring industrial, social and political
difficulties that perplex the world, and with which
statesmanship and philanthropy and education grapple
in vain.

Prompt action is needed in regard to the large,
though it may be hoped, now steadily diminishing
residium of persons who are physically, mentally,
or morally incapable of doing a good day's work
with which to earn a good day's wages. . . . The
children of unskilled workers need to be made
capable of earning the wages of skilled workers:
and the children of skilled workers need by similar
means to be made capable of doing still more respon—
sible work. . . . The most imperative study of this
generation is to provide for the young such oppor—
tunities as will both develop their higher nature,
and make them efficient producers.

 

45Alfred Marshal, Principles of Economics (London:
Macmillan and Co., Limited, 1920), p. 714.

 

 

CHAPTER III

IMPERICAL ANALYSIS

This chapter is mainly concerned with the inter-

 

pretation of the statistical analysis. As mentioned in fl
the first chapter, this study is an exploratory effort
to examine some of the aspects of poverty. Therefore,
first of all statistical testing approach will be applied i

to measure the differences of the means of two groups
(rich and poor counties). Secondly, to know if there is
any concentration of poverty and some of the poverty
factors like employment opportunities, coefficient of
localization analysis results will be interpreted.
Thirdly, the results of correlation analysis will be
presented and their further interpretation will be
focused on the evaluation of anti-poverty programs which

have been in practice and others which have been proposed.

47

48

Difference Between Two Groups of Counties
With Low and High Percentage
of Poor Families
For this analysis, two groups of ten counties each
were compared according to the percentage of poor families.1
In the first group, 18.3 to 21.9 per cent of the families
were in the poor category, whereas in the second, 33.3 to
35.5 per cent of the families were classified as poor.
There were forty-two socio—economic characteristics which
were analyzed to measure the difference between the two

groups. The t test analysis was used and the results

are shown in Table 1. These calculated t values are com-

 

pared with the table value at 5 per cent level of sig-
nificance.

Whenever we think of rich and poor, the first
impression is that rich have more and poor have less of
everything. But it seems that this is not always true.
The poor certainly have less but not of everything. In
the comparison of rich and poor counties2 twenty-two of
the forty-two variables indicate no significant difference
between rich and poor counties. The means of the remain-

ing twenty variables are significantly different but do

 

1For sampling procedure, see Methodology in
Chapter I.

2Rich counties are those which have low per—
centage of poor families and poor counties are the other
way around.

49

TABLE 1

t STATISTICS OF FORTY-FIVE VARIABLES; t VALUE
AT 5 PER CENT LEVEL OF SIGNIFICANCE-~2.101

 

Variables

Calculated t

 

Statistic
Population, 1960 3.769a
Per cent population over 65 years of age 3.022a
Per cent non-white 1.546
Taxable property value, 1968 2.392a
Per cent commercial property 0.853
Per cent industrial property 2.753a
Per cent residential property 1.862
Per cent agricultural property 0.574
County Revenue (General) 3.128a
No. of farms, 1964 1.946
Population 25 years and over 0.491
Per cent of population 25 years and over
with four years high school and more
education 1.568
Labor force 2.706a
Per cent of unemployed labor force 2.847a
Median income, 1959 2.803a
Median income of farm families, 1959 2.496a
Ratio worker/non-worker 3.641a
No. old-age welfare recipients, 1967 3.776a
Total Payment 3.229a
No. of dependent children on welfare
recipients, 1967 1.224
Total Payment 0.971
No. of blind welfare recipients, 1967 0.787
Total Payment 0.765
No. of disabled welfare recipients, 1967 2.161a
Total Payment 2.667a
No. of persons getting direct relief,
1967 0.643
Total Payment 1.344
Hospital beds/1,000 0.994
Nursing homes/1,000 2.099
M.D.'s/l,000 1.854

D.O.'s/1,000

1.896

 

50

TABLE 1.--(continued)

 

Calculated t

 

Variables Statistic

No. employed in ag. for fish. 1.582
No. employed in mining 2.360a
No. employed in construction 2.700a
No. employed in manufacturing 3.627a
No. employed in utilities 1.274
No. employed in trade 1.581
No. employed in finance ins. real es. 1.175
No. employed in business and personal

services 3.399a
No. employed in other services 0.452
No. employed in public administration 2.194a
Population density 5.032a

 

aVariables with significant difference

 

51

not explain which group (rich or poor) possesses more.

The answer to these questions is not in the sc0pe of this
statistical test of differences (t test) between the means
of the two groups. To examine the relationship and impor-
tance of these independent variables with the dependent
variable (percentage of poor families) simple correlation

and linear regression analysis is used.

 

Coefficient of Localization

 

To describe the spatial dimension of poverty, the

 

coefficient of localization approach has been applied. E
In the first case (Appendix A) poverty (percentage of
poor families) has been calculated against the total popu-
lation of each county. In the second case (Appendix B)
employment in different industries like agriculture, con-
struction, the manufacturing, utilities, mining business
and personal services has been considered against total
employment in each county.

In the case of percentage of poor families and
the total population, the coefficient of localization is
.001. It means that poverty as a whole (percentage of
poor families) is not concentrated in rural counties.
Poverty is evenly distributed in rural counties as popu-

lation. Similarly, employment in agriculture, manufacturing,

52

construction, utilities, mining, business and personal
services, is not concentrated anywhere in rural counties

of the Lower Peninsula. The employment in the above
mentioned industries is evenly distributed as total
employment in the area. The coefficient of localization
for agriculture is .0025, construction .0013, manufacturing
.0015, utilities .0017, mining .0054, and business and

personal services .0009. Employment in construction, .3
manufacturing, utilities and business and personal ser-

vices is slightly better distributed than the employment

 

i
in agriculture and mining. E

Multiple Regression Analysis

 

At this point the main concern of this study is
to know what characteristics are associated with the
percentage of poor families, and the explanation of those
variables which are associated at the 5 per cent level
of significance. For this analysis, from the previous
long list of independent variables, to avoid the complicacy
of forty-two variables, only twenty-nine variables are
included without any specific statistical criteria of
selection, except the judgment of the writer about the
logical reason for expecting these to be related to the

poverty. These twenty-nine variables include most of the

53

important aspects of the problem.3

All the fifty-one
rural counties in the Lower Peninsula of Michigan are
included instead of twenty counties which were considered
in the previous analysis of p values. The estimating

equation including the twenty-nine independent variables

is as follows:

Regression Equation:

P<
ll

45.693 + 0.0981 + 7.118x2 + 0.060x3 + 0.0484
- 0.299x5 - 2.073x6 + 0.254x7 - 0.056x8

+ 3.292X9 + 1.293Xl0 - 0.276Xll + 6.094X12

+ 0.102xl3 - 4.449xl4 + 2.165x15 — 0.158xl6
+ 0.065x17 - 0.457xl8 - 0.611x19 - 0.569x20
- 0.717x21 - 0.13ox22 + 1.167x23 + 0.223x24
— 0.199x25 - 0.569x26 - 0.42ox27 - 0.062x28
- 0.016x29

Multiple Correlation Coefficient:

R12 = 0.9545,R = 0.977052 = 0.8917,R = 0.9443

 

3Income of the family is obviously an important
factor of poverty which has not been included in the final
analysis of correlation. This variable was included in
elementary analysis and dominated the analysis. Therefore,
it was decided to delete it from the final analysis.

 

 

St

Y

Independ

X1
X2
X3
X4
X5

X6

X7
X8

X9

X10
X11
X12
X13
X14
X15
X16

X17

X18

X19

54

andard Error of Estimate = 2.4838

= Percentage of poor families (dependent variable).

ent Variables:

= Population, 1960

= Population over 65 years of age (per cent)
= Per cent non-white

= County revenue (per capita)

= Per cent population 25 years and over

= Per cent population 25 years and over with 4
years high school and over education

 

= Per cent labor force of the total population
= Per cent of labor force unemployed

= Per cent social welfare recipients of the total
population

= Median school years completed
= Property value per acre

= Property value per capita

= Hospital beds/1,000

= M.D.'s/l,000

= D.O.'s/l,000

= Nursing homes/1,000

= Per cent (of the total employment) employed in
agriculture, forestry and fisheries

= Per cent (of the total employment) employed in
mining

 

= Per cent (of the total employment) employed in
construction

55
X20 = Per cent (of the total employment) employed
in manufacturing

X21 = Per cent (of the total employment) employed
in utilities

X22 = Per cent (of the total employment) employed
in trade

X23 = Per cent (of the total employment) employed
in finance, insurance and real estate

X24 = Per cent (of the total employment) employed
in business, personal services

X25 = Per cent (of the total employment) employed
in public administration

X26 = Per cent (of the total employment) employed
in other services

X27 = Total employed
X28 = Population density

X29 = Per cent total employed

When we look at the multiple coefficient of deter-
mination which (R2) is equal to 0.9545, we can conclude
that 95 per cent of Y, which is our dependent variable
(percentage of poor families) is associated and can be
explained by the above twenty-nine independent variables.
But when we look at the regression equation, we actually
see very few independent variables which have a signifi—
cant relationship. The rest of the independent variables
are not significantly related; therefore, these twenty-
nine variables are run on L.S. Delete Routine at 5 per
cent level of significance. Eleven independent variables

were left at the 5 per cent level of significance.

 

 

 

56

The regression equation formed by eleven variables

which are significant at 5 per cent level.

y = 41.243 + 0.137xl + 0.524x2 + 0.047x4 + 3.229x9

4.364Xl4 - 0.394X18 - 0.627X19 - 0.489X21 - 0.064X20

0.396X26 - 0.459x27

Multiple Correlation Coefficients:

R2: 0.9282, R = 0.9634, fi2 = 0.9080, E = 2.9529

Y = Dependent variable (percentage of poor families of
the total population)

 

X1 = Population, 1960

X2 = Per cent of pOpulation 65 years and over

X4 = Per capita county revenue
X9 = Per cent social welfare recipients (of the total
population)

X14 = Medical doctors/1,000

X19 = Per cent employed in construction
X21 = Per cent employed in utilities

X20 = Per cent employed in manufacturing
X26 = Per cent employed in other services4

X27 = Total employed

 

4Other services as an independent variable does
not include agriculture, forestry, fisheries, mining,
construction, manufacturing, utilities, trade, finance,
insurance, real estate, business and personal services,
and public administration.

57

Interpretation of Regression Analysis
Results With Relation to the
AntiéPoverty Programs

 

 

 

First of all, to evaluate how close our prediction
of poverty is, the residuals (plus and minus differences
between observed and calculated values of Y) and observed
and calculated values are graphed (Figure 2). This
graph shows that estimated Y or explained variance is
not far from the observed values. The differences between
observed and estimated values range from plus 5.3 to
minus 0.03. These plus and minus differences are plotted

on Map no. 2 to show which counties are over- and under—

 

predicted. Out of fifty-one rural counties under study,
twenty-four counties are over-predicted and twenty-seven
counties are under—predicted (Figure 3). Twenty counties

are predicted very close to the observed values (Figure 4).

Population and Poverty

 

The multiple regression coefficient of independent
variable Xl (total population) which is significant at
5 per cent level of significance shows that population
and percentage of poor families are positively related.
The regression coefficient of these two variables is
0.13667. Therefore, if we increase X1 (population which

is in thousands) 10 per cent, we increase poor families

 

1.2 per cent. In the case of simple correlation, the

58

D J
NIH
I pl. phi-.1

 

.AmHQMHHM> ucmpcwmmpv M NO mosam> pmumHDOHmo paw pm>ummn0||.~ musmfim

mm om ma OH m
. meaum Mensa mum noen3 mmflucsoo mconaumam

  

mosam>
pm>ummno

 

modam>
emanasoamu

 

SBTI'FUIPJ 100d JO 8593U8018d

 

OH

on

om

ov

om

59

OIL. IOVALI
("I H
- w

 

 

  
 
 
       
  

cuouron
l
I r- -
onto-non L, , '
L r" inn“ ,3
3
ooouuc |_ _ I | muwnu . u
1 l g I LOCI
' '_-‘_-_ 0 '____n I
'- - - 1 noun 1 u ' ' l
' LOII l’ _ .’ | ICNIPPIII
' ""I scuomcnn'.-___l
l ,oocunoul r'— _ _ _ 1' A I ucnuc L _ - b
I I , onu ' I " ' 1
' r ‘ r ‘ ' ' ‘ Q
r ‘1 g
l | l 0 O
.1 : 0 b
IIMIIIL °
”N? 543% ----- . ..............
Over -estimat ed counties 5252525252525 55255:; ,3 "553252523: 55325252532325?
(Plus residuals) o 0 on... on. ..........

OOOOOOOOOOOOO
ooooooooooooooooooooooooo
oooooooooooooooooooooooooooooooo
ooooooooooooooooooooooooooooooo
................................
ooooooooooooooooooooooooooooooo
..................................
000000000000000000000000000000000
ooooooooooooooooooooooooooooooooooo
I

Under-estimated counties
(Minus residuals)

 

  

I" 1 III?

 

—-J

OYYAIA :

r
'uoutuu I ""“

 

  

 

Figure 3.--Leve1 of prediction.

 

60

0| LC IOVAL!
I'll
- '3

 

 

 

ouonvon
I
l r '-
ourounoou k l t
' r‘ IOAlAOA .
L , ' r
I
cocaine I- _ 1 ' ""°“"" ' LUCE
. ' . 0 .- - - -' '
L l‘ -“ - - - 4 I ‘ I
— — 1 Icon , IALocn I . IcuIrptIA
l I- - - — .1 ' rszu6oLcun ' ' b
I “““
' ,oacummm| r'_ _ - - 4 'IACIIIAC “L. - - .. - ,
I l ' O‘L" . : t W
1 r - r " I
I“ H A O
I I l 00 Q:
4 I
I
L
UIIOIIIIC

- (Counties(-l to +1)

(More than -1 to +1)

| Area out of study

 

 

L.-—‘—

r.-
OAtLAuo .
I

I

I

 

Figure 4.-—Difference between the observed values
and calculated values of Y by counties.

 

61

relationship between population and percentage of poor
families is the opposite because this relationship is
only between two variables. The multiple regression
coefficient is positive because of the entire effect of

other independent variable is taken into account

Age and Poverty

 

The next significant variable is percentage of
population which is sixty-five years old or more. This
variable is also positively related with the percentage
of poor families as indicated by the regression coeffi-
cient. The coefficient is + 0.5241. If we change (increase
or decrease) 10 per cent of this independent variable (per-
centage of population sixty-five years old and over) we
can change (increase or decrease) 1.7 per cent of our
dependent variable while holding all over variables con-
stant at their means. In the case of simple correlation,
this relationship is also positive.

In the rural counties of the Lower Peninsula,
there are 159,409 people of sixty-five years of age or
older, 10.5 per cent of the total population of the area.
The minimum and the maximum limits are 5.2 and 19.9 per
cent, respectively, in rural counties of the Lower Penin-
sula. The majority of them live alone or with just one
other person. Families headed by ages persons generally

have lower incomes than younger households of the same

“he

 

62

size because they are less likely to include a steady
earner and because the public programs that help many of
the aged almost always pay less than the earnings they
are intended to replace. Also, aged are less likely to
work regularly than the younger persons and they earn
less when they do work which is the main reason why pov-

erty is so much more common among the aged.

‘3
41...;

Emplpyment and Poverty

 

The total number of employed persons as one of the

independent variables is negatively related with the depen-

 

 

I
dent variable both in simple and multiple regression F;
coefficient. This variable is further subdivided into

ten categories: The percentage of persons employed in

agriculture, forestry and fisheries, mining, construction,
manufacturing, utilities, trade, finance, business, public
administration, and other services. Out of these ten

categories, only five--mining, construction, manufacturing,

utilities, and other services-—are significaniy asso-

ciated with percentage of poor families. These five

independent variables have the same relationship as the

total number of employed variable. The b. coefficients

were: Total employment -0.4586, mining -0.3938, con-

struction -0.4895, manufacturing -0.6490, utilities

—0.3964 and other services -0.4586. This minus rela-

tionship of employed persons is quite logical because

63

when higher percentage of people are employed they
increase the income of the families and pull poor
families out of the poverty bracket. Figures 5 and 6
show this relationship between the percentage of employed
persons of the total population and percentage of poor
families in rural counties. Figures 7 and 8 explain the
relationship between percentage of poor families and
percentage of employed persons of the total labor force.
Counties with large percentage of employed persons have
generally a low percentage of poor families. The rural
counties which are adjacent to the urban counties gen-
erally have large percentages of the labor force employed
and low percentage of poor families as compared to the
rest of the rural counties which are away from the urban
counties (SMSA). This is because the labor force can
commute easily to the urban areas for job opportunities
and obtain higher salaries than in the rural areas.

In the State of Michigan, the average civilian
labor force unemployment per county is 7.9 per cent.5
Standard metropolitan statistical (SMSA) counties have
an average of 5.8 per cent unemployed civilian labor
force whereas in rural counties of the Lower Peninsula

the average is 7.3 per cent.

 

5U.S., Department of Commerce, Bureau of the Cen-

sus, U.S. Census of Population (Washington, D.C.: Govern-
ment Printing Office, 1960).

 

 

 

 

64

 

hu man
/ nu.)
- “

 

 

   
   
     
  

OUCNYOI
l
I r- -
ciao-noon L. I {1
I
L I-J Inn“ r‘
noun: 1 I l quunn I we:
- - 1 ' I I '- _ - J :
I ~ - L _ _ _
L- - 1' ”'0' I Iauu r __I : IcIIInua ‘
- _ _ I
: Lam“; r'. _ - _ lsjuooicum hie-I705: J ,L _ - - - 1 b
I , , nun I I L a
I r - I- 4 I ' &)
I" I‘l S O
J I ' 0 00 717$“
I mun
Ina-nu ~ 3227:“‘50'fiznuw
E ,I L
Q CNAILI ll*-J 3‘ : 322-.
“g- - L __ Z7 Ffi.3';°:';°.__: AL‘I:
Qt“ V um- r 32 '
0 ‘ 3 3 | l 3 0 I
(‘3 _.35-I-.2J.IS.3-:-L°__
_ 'uuuul Ioscooa o I.
. ¥I355°"'M' so I°5‘5'°'I 3 2 1‘53"
Upper figures: , 09:“ I2, :34 :34
Perc ent employed per sons unwrap-3'0” F3353 ioTcEIITIEJJII'Io-w; ‘
of the total populat1on. 34 .34 ,3 0 :2 9 I2 7
- 3; _ LE‘TJ. 99-39-1310. -13.!
Lower finure 81:; f . 1 ' 30:»: : Li... log‘uu: ‘5‘" :osarul II Inc
0 l
ercen Door 3111 188 25-.‘ . : 32 .5 34 I 33 3.3“.
T L__:o___
”scan: “"“c
I
32
3.7.1:...
Figures are round up. ’3
flute 2°

  

OAKLAHD I

 

 

34 3‘
I
W i
nun-I I. _'3

'- - - -r
3. can "I'M" "new ”MW Ltlllll
I33 :3 :0 '38'34

I 2

I
2 I21:..

p---

Figure 5.--Percentage of employed persons and
poor families.

 

 

 

65

 

 

50 '
40‘
U)
m
-o-I
v-I
"2%
30 ’ m
u
o
o
m
I44
0
20 ' m
m
m
4.)
c
o
o
I-I
w
10 I m
Percentage Employed of the Total Population . . . . .)
20 30 40
Mg ‘ ‘ ‘

 

Figure 6.--Re1ationship of employed population
and poverty. ‘

 

66

 

 
   

  
  

I
I
I
I GIMP?!“
I

.scummn ' ......
Insane I_ _ _ _ _
I 'I

    
  

Imus:
§ cunt L _ .1 u a
.. j5.2.7 ' 75033.5“
QUI'W AITIII rm : ‘I
0 so I
I 21 . r2 : '.

-UIIIIIIA| GOING. I “CC“
'IZICr- _f-‘V" .7 I . a I . 3 ' . .

u; sz'"-1}_’.-:.39--L33---

”1“};ng “m1."“ow- 'ounu I W

an I80 .30 L3; ._30 _L53

- h " Toutofnl' I'
.un ' . 5 '33-: flaw” are

    
 
 
   
  
 
  
  

Upper figures:
Percent employed persons

of the total labor force
Lower figures:

  

 

Percent poor families ,g. ' I
- 3.9-; 9!. .I .33- '1‘- J3}. “' 03'"
“g unvoo 'uconuI'“"Lu'IIouI° _ _ _3_Q_ _
a I . : I.‘ '. 5 VIII-GOLA.“'““
I L___:_Q4_I_M "I C. I
t . IIQIYC‘L..' :‘a..' IAOIIII u I . t
"" '35" '3 15...... ' Ital...
«Inc. | .g
Figures are round up. » 3 3 -_ 555:?” °
. .5 IvT “'00 :quu I.
' I
.. L _ .. - r " ’ ""
3 “fl”. noun-an em:
M I86 :3“ I I:
II III 5 .3- - .—
. Pad-I. “a" IIAICNT'KLWILIIAIII mom
I. 5 ' | '0 C . ’ ‘ 9 3
I’ I o I I. I ' 7 | .

Figure 7.-—Percentage of employed persons of the
labor force and percentage of poor families.

 

 

67

 

 

 

 

5 o I Jaw;
/}
40 I f
0‘)
m
-r-I
r-I
-v-I
E
30 I m
L4
0
o
m
Q4
0
20 0
UI
o
4.)
c
m
o
H
w
10 . “
Employed People Percentage of the Labor Force ......>
80 85 90 95 100

 

Figure 8.--Percentage of employed persons of the
labor force and percentage of poor families.

 

68

In any social system, it is a fact that work is
the key to economic security of that social system and
work Opportunities are usually necessary to keep up the
economic health. With all the interest in more job oppor-
tunities for the poor, it is generally revealed that for
many it is not more jobs which are lacking but better job
opportunities. Particularly this kind of situation is
prevailing in rural areas where mostly low-paying jobs
are available. It is just possible that poverty in rural
areas may not be the outcome of unemployment only, but
also the low—paying jobs. As one would expect, the kind
of job held was intimately related to the risk of poverty.
The most poverty-prone calling for men is generally farm-
ing and unskilled labor and for women workers it is domes-
tic service in rural areas. This is the place where
"working poor" work.

Generally, family size is larger in rural areas
than the urban, therefore, it is another burden on the
family bread-winner. In 1964, reported Mollie Orshansky:

The poverty rate among families rose sharply from
12 percent when there was one child in the home to
49 percent when there were six or more children.
And among families with the same total number of
persons, those with large numbers of children are

more poor than the others because the income tends
to go down as the number of children goes up.6

 

6Mollie Orshansky, "Who's Who Among the Poor: A
Demographic View of Poverty," Social Security Bulletin,
XXVIII, 7 (July, 1965), 14.

 

 

“—
I;
._“_

 

I, lib-m! (will! "LI ru

 

 

69

Unemployment and underemployment which is more
common in rural than urban areas affect society's human
resources. This was the major point, also, of West's
comments cited earlier.7

West also mentioned that the important factor
responsible for rural poverty is, the rapid growth in
agricultural technology because this change forced the e-.
labor force to be unemployed and to seek employment in i]
the other sectors of the economy, particularly in urban

areas. This migration of unskilled labor created prob-

 

lems in urban areas. When some of this unskilled unem— éj
ployed labor force could not adjust in urban areas, pre-

ferred to return to rural environments they had left.

This part of the labor force is probably suffering more

because of this back-and-forth shift.

Mostly unemployed labor force in rural areas is
suffering from lack of education and lack of training of
a certain skill to get jobs. Even the report of the
Commission on Rural Poverty places very little emphasis
on job retraining aspects of needs in rural education
deficiencies, as it concentrated primarily upon edu-
cational needs of rural youth but the Commission did
emphasize the coordination of all Federal manpower

develOpment and training programs under one administration,

 

7See Page 25, Footnote 27.

70

"That adequate job training opportunities be provided for
rural workers to maintain and upgrade their skills and to
qualify for better jobs."8 The theory of welfare economics
states that a perfectly competitive, free enterprise sys-
tem guarantees the attainment of maximum social welfare.

It seems that poverty does exist in this economic system.
Schultz9 argues that poverty causes discomfort for society s
and we prefer less poverty to more poverty, which appears ‘8]
that some of the assumptions of a perfectly competitive

free enterprise system do not hold in this economic system. 3 J

 

In the last decade many studies have been completed ii i
to test the return from education and investment in the
human factor of production in this country. Schultzlo
has mentioned that poverty in this country is the result
of "long standing chronic disequilibrium rooted in inade-
quate investment in particular classes of people who are

therefore poor," and he further emphasizes more investment

in poor people (job training) to correct this disequilibria.

 

8President's Commission on Rural Poverty, People
Left Behind.

 

9T. W. Schultz, "Public Approaches to Minimize
Poverty," in Poverty Amid Affluence, ed. by Leo Fishman
(New Haven: Yale University Press, 1966).

 

1oxbid.

71

Welfare and Poverty11

 

In the rural counties of the Lower Peninsula,
there are a total of 24,420 welfare recipients which are
1.6 per cent of the total population of these counties.
The minimum and the maximum number in these counties is
80 (0.8 per cent) and 2,895 (5.5 per cent) recipients,
respectively. The mean is 1.8 per cent. These figures we}
have been calculated from monthly average data. The per 7
cent of welfare recipients as an independent variable in
regression analysis shows highly significant relationship

with the dependent variable. As per cent welfare assis-

 

tance recipients increases, the percentage of poor people
increases and the relationship of simple correlation and
multiple regression coefficients is positive which seems
logical. It is not only true in these rural counties but
even in the nation and the state as a whole. The per-
centage of people on relief is climbing, no matter what
kind of financial assistance is availab.e

As Charles Schottland, Dean of the Brandies Uni-
versity, School of Social Welfare, says that there are
many gaps and the present system of welfare assistance has
failed because there are too many people falling into

the poverty category. Actually welfare assistance programs

 

11Data in this section represent the fiscal year
ended June, 1967.

72

are not coping with the problem rather are encouraging
the poverty problem. Edmund K. Faltermayer states that:

. . . Yet some of the most deserving poor have
received no help at all; the rules work to exclude
them. And for those it does cover, the system
appears to be counterproductive. It has done
almost nothing to rehabilitate people and put them
to work, and far from promoting the cohesiveness
of families' life, it has tended to encourage the
break-up of families . . .12

. V! q
;.
no:

Welfare Programs

 

The present welfare system is very costly, destruc-
tive of pride, self-reliance, incentive of the poor and

inefficient. In other words, it is a disease for the

 

healthy economic growth of the nation in the long run.
Instead of "welfare," it has been often referred to

"illfare."

The most important anti-poverty efforts are direct

relief and aid to dependent children and Milton Friedman13

explains in the following:

These programs have at least one merit: the people
who are assisted for the most part have lower
incomes than the people who pay the taxes to finance
the programs. This may seem like a trivial or
obvious merit. But it is not. Of the great host of
so-called welfare programs in the U.S., these are
the only programs which unambiguously benefit people
with lower incomes than they burden. For some other

 

12Edmund K. Faltermayer, "A Way Out of Welfare

Mess," Fortune (July, 1968).

13Milton Friedman, "The Case for the Negative
Income Tax," in The Republicangapers, ed. by Melvin R.
Laird (New York: Doubleday and Company, Inc., 1968).

 

 

73

programs, like Social Security, the redistributive
effect is uncertain; for still others, like urban
renewal and agricultural price supports, the pro-
grams quite clearly benefit with higher incomes than
those who pay the cost.

Direct relief and aid to dependent children welfare
programs do not have only above-mentioned merit but these
are also coupled with some defects. The most important
flaw is that there is no incentive because the poor are
being taxed 100 per cent as compared with a much lower
per cent in the case of the non-poor. If there is any
increase in the poor's earned income, his or her relief
payment is reduced the same amount.

The second important effect of these kinds of pro—
grams is on the personal freedom, dignity and privacy of
the poor because they have to expose in detail their pri-
vate circumstances to qualify for welfare assistance.
These programs often are unable to assist people accord-
ing to their needs and values.

In spite of the above-mentioned welfare programs,
there are many others which are also known as public
welfare programs. The most important are public housing,
old age assistance, unemployment insurance, job training,
farm price supports and many others. All of these welfare
programs basically support the concept of governmental
means.

When we see "the children's allowance" welfare

program and the childhood poverty, it can be easily

 

74

realized that this is a group of poor which requires the
top priority but unfortunately has been most neglected
and most shabbily treated by current social welfare poli-
cies. Children deserve top priority but unfortunately
has been most neglected and most shabbily treated by
current social welfare policies. Children deserve top
priority in welfare assistance not only because they are
dependent and are subject to the risks to adequacy and
continuity of income to which all adults are liable but
they have also two other reasons. The first one is lost
or interrupted income and the second is the size of the
families where some of these children are born. The
present policies to deal with the childhood poverty which
is due to lost or interrupted income of the bread-winner
and size of families are inadequate by any criterion.
Although children are protected from the loss of a bread-
winner through death (old age survivors' disability and
health insurance) as far as the bread-winner was a "cov—
ered worker") but loss of a bread-winner through separation
of parents by divorce, legal separation or the fact that
the parents have never been married. About the size of
families and the poverty, Mollie Orshansky says;

The poverty rate among families rose sharply from

12 percent when there was one child in the home

to 49 percent when there were six or more children.
And even among families with the same total number

 

75

of children, there are more poor than the others
because the income tends to go down as the number
of children goes up.

15 .
mentions three measures to cope

Eveline M. Burns
with childhood poverty problems: (1) social insurance
improvement,(2) public assistance, and (3) negative income
tax. He suggests that there is a lot of scope to improve
the existing income maintenance system by covering all of F .
the workers with unemployment insurance and temporary ‘1

disability insurance. He further suggests a liberal

policy in case of social insurance coverage, particularly

 

for heavy medical expenses. He supports the argument b}
that at present unemployment insurance covers only four
wage earners out of five, while temporary disability
insurance is in effect in only four states and nationally
for railroad workers only. In the case of public assis-
tance programs, Burns is quite optimistic for the improve—
ments to provide more adequate payments without destroying
initiative and self-respect of the recipients.

The third proposal, "Negative Income Tax," amounts
to setting the minimum income level for a family of any
given size at the sum of deductions and exemptions per-

mitted a family of that size. After the failure of most

 

l4Orshansky, "Who's Who Among the Poor,"
Papers on Rural Poverty.

15Eveline M. Burns, ed., Children's Allowance and
the Economic Welfare (Report of a conference, 1968 Citizens'
Committee for Children of New York, Inc.).

 

 

 

76

of the present welfare programs, some other alternatives
have been presented. In 1962, Milton Friedman, a con-
servative economist, spelled out "The Negative Income
Tax" approach to cope with the welfare problem. The
basic philoSOphy of this concept is a guaranteed minimum
income for everyone through supplement but not replace-
ment. The whole process will be executed through present
income tax framework. Milton Friedman explains in the
following:

I have termed this device for helping the poor a

negative income tax in order to stress its identity

in concept andioperation with the present income

tax by supplementing the income of the poor by a

fraction of their unused income tax exemptions and
deductions.16

 

Friedman explains the advantages of this tax
device as:

1. It concentrates public funds on the poor.

2. It treats indigent as responsible individuals,
not incompetent wards of the state.

3. It gives indigent an incentive to help them-
selves.

4. It would cost less than present programs yet
help indigent more.

5. It eliminates bureaucracy and political slush

fund.

 

16Milton Friedman, "The Case for the Negative
Income Tax," in The Republican Papers.

 

 

77

Negative income tax proposal as a way of guaran-
teeing everyone some minimum income is among those cur-
rently most fashionable. Many economists and other con-
cerned thinkers are advocating this concept to supplement

the income of the poor.

Medical Facilities and Rural Poverty

 

To examine the relationship between poverty and
medical facilities, four independent variables were
included in the regression analysis:

(1) Number of hospital beds

(2) Number of M.D.'s

(3) Number of D.O.'s

(4) Number of nursing homes.

Out of these four variables, only the number of M.D.'s
are significantly associated with percentage of poor
families.

Lack of medical facilities is an important factor
of poverty in rural areas and uneven distribution of
medical facilities has been pointed out in the Advisory
Commission's Report. Actually, rapid expanding of urban
oriented medical technology which needs more complex and
expensive equipment and skills is a limiting factor to
develop medical resources in rural areas. Because of
this complex medical technology development, medical

resources are being centralized in urban centers.

'1... ca;

 

78

What happens when the population is short of per-
sonnel and facilities for health care? The shortage of
health personnel and medical facilities create very many
disadvantages for the rural disadvantaged population in
case of high illness rates and an accumulation of physical
defects. Research results from a wide range of studies
show that the rural population of this nation has a
higher incidence of almost all types of illnesses than
urban population.

Shortage of medical care results general illness
of population which has left so many rural areas exhausted
and poor, both economically and culturally. Poverty and
illness are often so much interwoven that it is difficult
to determine which comes first. Studies have shown the
following:

Disease and premature death are startlingly high
among the rural poor. Infant mortality, for
instance, is far higher among the rural poor than
among the least privileged group in the urban areas.
Chronic diseases also are common among both young
and old. And medical and dental care are conspicu-
ously absent.17

Similarly other studies reveal disadvantages in
health situations of rural areas. For example, prevalence

of chronic illness, infant mortality rates, days lost from

illness, preventive measures, draft rejection rates, etc.

 

l7President's Commission on Rural Poverty, People
Left Behind, p. x.

 

 

79

Health care needs generally are greater in rural
areas and the following factors differentiate the rural
population from urban residents. The first factor is
the higher percentage of poor families in rural areas.
In the rural counties of the Lower Peninsula the minimum
and maximum proportion of poor families is 13.6 per cent
and 48.0 per cent, respectively. The average percentage
of poor families per county is 27.1 whereas in urban Ema
(SMSA) counties the minimum and the maximum percentage

is only 9.4 and 22.4. The average in this area is 14.3

per cent of families which are below the poverty line.

 

“a

The second factor is age distribution. In rural areas “”
there are more aged persons and children and there are
fewer persons of working age as compared to the urban
counties. In rural counties which are under study there
is 5.2 and 19.1 per cent population minimum and maximum,
respectively, which is sixty-five years old and over.

The mean is 11.4 per cent. In urban counties, it ranges
from 4.3 to 9.4 per cent sixty-five years old and older.
The average is 7.7 per cent. The third point which dif-
ferentiates rural and urban residents in the case of their
health care needs is the average level of education. In
rural areas, levels of education are much lower than in
urban centers. Educated people are more aware about the
health care and are more conscious about their health.
Urbanites, which are more educated, have better attitudes

about health care. Doherty says that:

80

Even when allowances are made for the greater pro-
portion of older persons living in rural areas, the
incidence of such activity-limiting conditions
increases with rurality. Farmers, in particular,
experience a high rate of chronic i11ness--use of
health services, as distinct from need for such
services, is influenced by education. Because of
their low level of education, rural people--
especially the poor--are less likely than more
highly educated people to utilize advice about nu-
trition, hygiene, immunization, prenatal care, and
periodic check-ups and other health aids.l8
Medical services tend to locate in urban areas
because of rural environment which discourage whereas
urban environments encourage the location of physicians.
The low income and sparcity of rural population is
another disadvantage to attract the physicians in
rural areas.19 The present situation of health facilities
in rural and urban counties in Michigan confirms the
statements. In rural counties of the Lower Peninsula the
minimum and the maximum number of M.D.'s per thousand of
population are 0.00 and 1.970, respectively; and the
mean is 0.627 M.D.'s per thousand population. In the
case of urban counties (SMSA) the range of numbers of

M.D.'s per thousand pOpulation is 0.347 to 3.729, and the

average number of M.D.'s per thousand people is one.

 

18Neville Doherty, Rurality, Poverty, and Health,
U.S., Department of Agriculture, Medical Problem in Rural
Areas, Agricultural Economics Report No. 172 (Washington,
D.C.: Government Printing Office, 1970), p. 2.

 

19U.S., Congress, Senate, Hearing before the Sub-

committee on Monopoly of the Select Committee on Small
Business, "Competitive Problems in Drug Industry," in
Income Opportunities and Physician Location in the U.S., by
Steele and Rimlinger, 90th Cong., Part 5, December 14, 9,
1967; January 18, 19 and 25, 1968, pp. 2,012-24.

 

81

Similarly, in case of general hospital beds, they range

from 0.000 to 9.990 beds per thousand people in rural

counties, whereas in urban counties, the range is 1.163

to 8.126. The mean is 3.330 and 3.

counties, respectively. The range
0.000 to 8.053 and 1.401 and 4.581
lation in rural and urban counties
The average nursing homes is 2.602

2.550 in urban counties which is a

450 in rural and urban
for nursing homes is
per thousand popu-

of the Lower Peninsula.
in rural counties and

little better situation

as compared to M.D.'s and general hospital beds in rural

. 20
counties.

It seems that rural peOple generally have

higher birth rate than the urban residents, therefore

they need more nursing homes per thousand population.

General County Revenue

and Poverty

 

In our analysis general (per capita) county

revenue21 is significantly related

to the dependent

variable (percentage of poor people). Counties with

larger percentage of poor families

have more per capita

general revenue perhaps because these counties get higher

grants for welfare programs from the state and the

federal governments (Figure 9), County revenue from

 

20

The data on medical facilities were obtained

from the U.S. Department of Agriculture, Economic
Research Service, Economic Division, located at Michigan
State University, East Lansing, Michigan.

21

For definition see page 13.

-4” l...

 

'"7

L'd -

 

i L

.mowawamw noon mo mmmuamonmm cam wocm>mu mucnoo muflmmo Hmmll.m musmwm

 

82.

 

av mv ov mm on mm om ma 0H m
A ..... mow—3.5m noom mo ommucwouwm . om
d
a
1 7 cc
3
P
d
'5:
q
a
D
m saw
u
a.
K
a
a
A
a
m I. cm
a
. .03
<
v ONH
. ova
+03

 

83

local sources and taxes which people pay do not show the
above significant relationship with percentage of poor

families.

CHAPTER IV

SUMMARY AND CONCLUSION

This study is an exploratory effort to know more

of the dimensions of the rural poverty in the Lower Penin-

sula of Michigan. The main emphasis is to expose some of

the aspects of this problem which may help to provide

information to those who want to consider this problem in

detail. The major considerations have been focused on the

following three purposes:

A.

The first purpose of this study is to measure
the differences if any, in material and
services between the areas with lower and
higher percentage of poor families.

The second purpose is to study the relation-
ship of socioeconomic characteristics with
the percentage of poor families in the rural
area.

The third purpose of this work is to review
some of the current and proposed anti-poverty
policies in the light of the above relation-

ships.

84

85

The definition of poverty is a controversial
topic and many people do not agree on any one concept.

It is also not possible for a complete agreement on a
dictionary definition because it refers vaguely to "insuf-
ficiency of means" which we cannot translate into money
units. If we define poverty in terms of money, then it
can be compared with the money available to a family

with the money it needs to spend during a given year.

By this way it necessitates, while counting the poor,
complete information regarding assets, annual earned and
unearned incomes, and cash expenditure needs of the family.
Only earned and unearned cash data are available in dollar
terms, therefore, the measurement of poverty is likely to
be based on cash-income criterion. There is disagree—
ment on this criterion but it is a most acceptable tool

to measure the problem in the absence of any other unani-
mously accepted approach.

Therefore, the total money income line will be
considered ($3,000 established by the Social Security
Administration) as a reference point in this study because
it is the only one for which time series by relevant demo-
graphic characteristics are available.

To examine the difference in services and material
between the means of two groups of counties with lower
and higher percentage of poor families, t test a statis—

tical approach was applied. Forty-two socio-economic

86

characteristics were included in this test. Out of these
forty-two only twenty variables are significantly dif-
ferent while the other twenty-two variables do not have
any significant difference between two groups.

The coefficient of localization analysis shows
that poverty and some other factors of poverty like
employment in different industries is not concentrated

in the rural counties of Lower Peninsula. Poverty is ,
V/J’
almost evenly distributed as the total population

throughout the area under study.

To examine the relationship of socio-economic
characteristics and poverty (percentage of poor families)
multiple regression analysis was conducted. This analy-
sis shows that there are eleven independent variables
which are significantly associated with the dependent
variable at the 5 per cent level of significance. These ,/
are:

1. Total population, 1960

2. Per cent of population 65 years and over

3. Per capita general county revenue

4. Social welfare recipients (per cent of the

total population)

5. Medical doctors per 1,000 population

6. Per cent employed in mining (percentage of

the total population)

7. Per cent employed in construction

87

8. Per cent employed in manufacturing
9. Per cent employed in utilities

10. Per cent employed in other services
11. Total employment

The above independent variables explain 92 per
cent of the variation in percentage of poor families in
fifty-one rural counties in Lower Peninsula in the state
of Michigan.

Total pOpulation is positively related with pov- _,w
erty. If we increase total population 10 per cent, the
percentage of poor families will change 1.2 per cent. A
10 per cent increase in the percentage of population
sixty-five years or older would change the percentage
of poor families 1.7 per cent.

The total number of employed persons as one of the
independent variables negatively related with the depen-
dent variable both in simple correlation and multiple
regression coefficient. Employment in mining, construc—
tion, manufacturing, utilities, and other services (per—
centage of the total employment) have the same relation-
ship as the total employment. This negative relationship
between dependent variable and the employed population WM“.
shows that if we increase 10 per cent of the total
employment we can decrease 0.8 per cent poverty. This
relationship seems to be logical because more job oppor-

tunities will increase the level of income. In rural

88

areas mostly family size is larger, therefore, if there
are more employment opportunities in rural areas the
children will help more to increase the income of the
family bread-winner.

The percentage of welfare recipients as an inde- ~/,
pendent variable in correlation analysis shows highly
significant relationship with the dependent variable
(poverty). As per cent welfare assistance recipients
increase, the percentage of poor people increases. This
positive relationship in both simple and multiple
regression coefficient was expected.

As Charles Schottland, Dean of the School of Social
Welfare, Brandeis University, says that there are very
many gaps and the present welfare system has failed
because there are too many peOple failing in the cate-
gory of welfare recipients. Actually welfare assistance
programs are not coping with the problem rather are
encouraging the poverty problem. Edmund K. Faltermayer
states that:

. . . yet some of the most deserving poor have
received no help at all; the rules work to exclude
them. And for those it does cover, the system
appears to be counter productive. It has done
almost nothing to rehabilitate peOple and put them
to work, and far from promoting the cohesiveness of

family life, it has tended to encourage the break—
up of families.1

 

lFaltermayer, "A Way Out of Welfare Mess."

89

As Harold Watts2 mentioned in his speech, the
present public assistance programs are not successful
to achieve their objectives. He illustrates the follow-
ing defects in the present anti-poverty programs.

1. It has led to excluding nearly three-fourths

of the poor from assistance.

2. It provides a situation in which a father can

best serve his family by deserting it.

Such adverse incentives are a hazard with any
categorical approach that is based upon characteristics
of the family that can be changed at the option of the
family. But on the other hand it is hard to find a set
of programs to eliminate poverty that does not include
a universal as opposed to a categorical system of income
guarantees and supplements.

Employment opportunities, training and retraining,
education, medical facilities, and other social services
are indispensible parts of an effective anti-poverty pro-
gram and no one program can eliminate all poverty alone.
The most economical program requires a careful blending

of many approaches.

. . . A successful antipoverty effort must include
a comprehensive income maintenance program which can

 

2Harold Watts, Director Institute for Research on
Poverty, University of Wisconsin, presented his paper
before the Senate Sub-committee to Discuss the Welfare
System and Proposals for Reform, in Welfare Reform: Prob—
lems and Solutions (Madison, N.D.: University of Wisconsin
Institute for Research on Poverty), p. 108.

 

90

serve all the poor. A universal income maintenance
scheme must both support and encourage individual
efforts to improve this situation. An income-con-
ditioned cash benefit, usually termed the negative
income tax, can accomplish our objectives and seems
superior to the principal alternatives that have
been suggested.3

To examine the relationship between poverty and

medical facilities the regression analysis shows that

My

“3‘

number of medical doctors and the percentage of poor
families are negatively related. It means that if we
increase number of doctors 10 per cent we can decrease
poverty 0.9 per cent. What happens when the population
is short of personnel and facilities for health care?
The shortage of health personnel and medical facilities
create numerous disadvantages for the rural disadvantaged
population in case of high illness rate and an accumu—
lation of physical defects which decrease the income
level of the population. Poverty and illness are often
so interwoven that it is difficult to determine which
comes first.

General county revenue and poverty (percentage of
poor families) are positively related in our analysis
which does not seem logical because the general county
revenue is not only from the local sources. It also
includes grants from state and federal governments for
different functions. Therefore, general county revenue

is not all contribution of the pOpulation and that is why

 

31bid., p. 111.

91

we can argue that the above positive relationship is not
meaningful. The only argument which favors this rela-
tionship is that counties which have more poor families

perhaps get more grants for welfare programs and such

other activities.

BIBLIOGRAPHY

BIBLIOGRAPHY

Anderson, W. H. Locke. "Trickling Down: The Relationship
Between Economic Growth and the Extent of Poverty
Among American Families." Quarterly Journal of
Economics (November, 1964).

 

 

Batchelder, Alan B. The Economics of Poverty. New York:
John Wiley and Sons, Inc., 1966.

 

Bird, Alan R. Poverty in Rural Areas of the United States.
USDA. ERs, Agricultural Economic Report No. 63,
November, 1964.

 

 

Bonnen, James T. "Rural Poverty: Programs and Problems."
Journal of Farm Economics, XLVIII, 2 (May, 1966),
452-65.

Chamber of Commerce of the United States. The Concept of
Poverty. Task Force on Economic Growth and
Opportunity. Washington, D.C.: Government
Printing Office, 1965.

 

Clawson, Marion. "Rural Poverty in the United States."
Journal of Farm Economics, XLIX, 5 (December,
1967), 1,227-33.

 

Harbison, Frederick, and Myers, Charles A. Education
Manpower, and Economic Growth: Strategies of
Human Resource Development. New York: McGraw
Hill, 1964.

 

 

 

Jakubauskus, Edward B., and Baumel, Phillip C. Human
Resource Development. Ames: Iowa State Uni-
versity Press, 1967.

 

 

Johnson, Harry G. "Unemployment and Poverty." In Poverty
Amid Affluence. Edited by Leo Fishman. New
Haven: Yale University Press, 1966.

 

 

Keyserling, Leon H. Progress of Poverty. Conference on
Economic Progress. Washington, D.C.: Government
Printing Office, 1964.

 

92

93

Larson, Olaf F. "Discussion: Rural Poverty in the
United States." Journal of Farm Economics,
XLIX, 9 (December, 1967), 1234-36.

 

Levitan, Sar A. Federal Aid to Depressed Areas.
Baltimore: Johns Hopkins Press, 1964}

 

. Federal Manpower Policies and Programs to Com—
bat Unemployment. Kalamazoo, MiCh.: The W. E.
Upjohn Institute for Employment Research,
February, 1964.

 

 

Lewis, Oscar. "The Culture of Poverty." Introduction to
the author's book, LaVida: A Puerto Rican Family
in the Culture of Poverty. New York: Random
House, 1966.

 

 

Martin, Lee. "Effects of Alternative Federal Policies
on Welfare of Rural People." Journal of Farm
Economics, XLVIII, 5 (December, 1966), 1267-76.

 

 

McCauley, John S. "Manpower Development in Rural Areas."
Employment Service Review, V, Nos. 3 and 4 (March-

 

Meissner, Hanna H., ed. Poverty in the Affluent Society.
New York: Harper and Row Publishers, 1966.

 

Moynihan, D. P., ed. On Understanding Poverty. New York:
Basic Books, Inc., 1969.

 

Papers on Rural Poverty. Papers presented at the Annual
Conference of the Southern Economic Association.
Raleigh: North Carolina State University, Agri-
cultural Policy Institute, School of Agriculture
and Life Sciences, March, 1969.

 

Perkins, Brian, and Hathaway, Dale. The Movement of Labor

 

Between Farm and Nonfarm Jobs. Agricultural
Experiment Station Research Bulletin 13. East
Lansing: Michigan State University, 1966.

 

Research Committee. Institute for Research on Poverty.
Welfare Reform: Problems and Solutions. Madison:
University of Wisconsin, n.d.

 

Schutlz, T. W. "Public Approaches to Minimize Poverty."
Poverty Amid Affluence. Edited by Leo Fishman.
New Haven: Yale University Press, 1966.

 

94

Seligman, Ben B., ed. Poverty as a Public Issue. New
York: The Free Press, 1965.

 

Somers, Gerald G., ed. Retraining the Unemployed. Mad-
ison: The University of Wisconsin Press, 1968.

 

The President's National Advisory Commission on Rural
Poverty. Rural Poverty in the United States.
Washington, D.C.: Government Printing Office,
1968.

 

The President's Advisory Commission on Rural Poverty. The
People Left Behind. Washington, D.C.: Govern-
ment Printing Office, 1967.

 

Tweeten, Luther G. The Role of Education in Alleviating
Rural Poverty. USDA, ERS, Agricultural Eco-
nomic Report No. 114, January, 1967.

 

 

U.S. Department of Agriculture. Federal Programs Available
to Assist Rural America. Rural Community
Development SerVice, Washington, January, 1968.

 

 

U.S. Department of Labor. Manpower Report of the President
and A Report on Manpower Reguirements, Resource
Utilization and Training, April, 1968.

 

 

 

West, Jerry G. Poverty-~Its Meaning and Causes With
Selected Case Studies. North Carolina State
University: Agricultural Policy Institute,
School of Agriculture and Life Sciences, July,
1968.

 

APPENDICES

APPENDIX A

DISTRIBUTION OF POVERTY AND POPULATION

APPENDIX A

DISTRIBUTION OF POVERTY AND POPULATION

 

 

 

County Total El Total E13 5;: _
Population. 1E Poor Ei Ei
(000) (000)

Midland 51.4 .03 7,140 .02 -.01
Calhoun 138.8 .09 19,460 .06 -.03
Berrien 149.9 .09 24,160 .07 -.02
Shiawassee 53.4 .03 9,010 .03 0
Lenawee 77.8 .05 14.040 .04 -.01
Livingston 38.2 .02 6,840 .02 0
Alpena 28.6 .02 5,220 .02 0
St. Joseph 42.3 .03 7,980 .02 -.01
Allegan 57.7 .04 11,020 .03 -.01
Cass 36.9 .02 7,400 .02 0
St. Clair 107.2 .03 21,400 .06 -.01
Barry 31.7 .02 6,400 .02 0
Gr. Traverse 33.4 .02 6,930 .02 0
Manistee 19.0 .01 3,990 .06 0
Ionia 43.1 .03 9,460 .02 0
Branch 34.9 .02 7,700 .02 0
Gratiot 37.0 .02 8,510 .02 0
Tuscola 43.3 .03 9,890 .03 0
Isabella 35.3 .02 8,400 .02 0
Van Buren 48.4 .03 11,520 .03 O
Wexford 18.5 .01 4,500 .01 —.01
Mason 21.9 .01 5,500 .02 +.01
Presque Isle 13.1 .01 3,380 .01 0
Iosco 16.5 .01 4,160 .01 0
Hillsdale 34.7 .02 9,450 .03 +.01
Montcalm 35.8 .02 9,720 .03 +.01
Emmet 15.9 .01 4,320 .01 0
Charlevoix 13.8 .01 3,780 .01 0
Otsego 7.5 .01 1,890 .01 0
Oceana 16.5 .01 4,480 .01 0
Benzie 7.8 .01 2,240 .01 0
Crawford 4.9 .00 1,450 .00 0
Newaygo 24.2 .02 6,960 .02 O
Osceola 13.6 .01 4,340 .01 0
Sanilac 32.3 .02 10,240 .03 +.01
Gladwin 10.8 .01 3,630 .01 0
Roscommon 7.2 .01 2,310 .01 0
Leelanau 9.3 .01 3,060 .01 0
Mecosta 21.0 .01 7,140 .02 +.01
Arenac 9.8 .01 3,700 .01 0
Clare 11.6 .01 4,080 .01 0

96

Appendix A.--Continued

 

 

 

Count Total 31 Total E}; 51.3. _ E;
Y Population E Poor Ei Ei E
Oscoda 3.4 .00 1,020 .00 0
Antrim 10.4 .01 3,400 .01 0
Alcona 6.4 .01 2,040 .01 0
Cheboygan 14.6 .01 5,400 .02 +.01
Huron 34.0 .02 2,240 .04 +.02
Kalkaska 4.4 .00 1,440 .00 0
Missaukee 6.8 .01 2,660 .01 0
Ogemaw 9.7 .01 3,900 .01 0
Montmorency 4.4 .00 1,720 .01 +.01
Lake 5.4 .00 2,400 .01 +.01
TOTAL 1,554.5 340,620
Coefficient of localization Li = .001
(ei' - e.) >0 -.11
Formula: 3 J +.10
Li =EB [eij-ej1/100 for either or
.. - . <0
(ex: ea)

Where:

Ej = Population of county

Eij = Poor population in county (number of poor families)
Ei = Poor population in all counties (number of poor
families)
E = Total population in all counties

APPENDIX B

DISTRIBUTION OF DIFFERENT INDUSTRIES

AND TOTAL EMPLOYMENT

APPENDIX B

97

DISTRIBUTION OF DIFFERENT INDUSTRIES

AND TOTAL EMPLOYMENT

 

 

 

Total . . A . .
_ E Agri- 31 E1 _ 2 Con- 81 Bi _ E Manu- Bi Bi _ E
County fizgioy 7% culture TEE IE; I} struction'Tri1 '13; '1} facturing 1. T31 1}
Midland 16.3 .028 .48 .009 -.019 0.96 .034 +.006 8.5 .047 +.019
Calhoun 51.6 .089 1.87 .036 -.053 2.13 .075 -.014 18.6 .104 +.015
Berrien 56.4 .098 4.16 .080 -.018 2.73 .096 -.002 23.9 .133 +.035
Shiawassee 18.9 .033 1.41 .027 -.006 0.80 .028 -.005 7.7 .043 +.010
Lenawee 26.3 .046 2.34 .045 -.001 0.97 .034 -.012 10.6 .059 +.013
Livingston 13.2 .023 1.27 .024 +.001 0.83 .028 +.005 4.2 .023 0
Alpena 9.2 .016 0.59 .011 -.005 0.51 .018 +.002 3.5 .019 +.003
St. Joseph 16.5 .029 1.32 .026 -.003 0.78 .027 -.002 7.0 .039 +.010
Allegan 19.9 .034 2.46 .048 +.014 1.19 .042 +.008 7.9 .044 +.010
Cass 12.8 .022 1.31 .025 +.003 0.67 .024 +.002 5.2 .029 +.007
St. Clair 35.0 .061 2.13 .041 -.020 1.87 .066 +.005 11.6 .065 +.004
Barry 11.4 .019 1.39 .027 +.009 0.62 .022 +.003 4.5 .023 +.004
Gr.

Traverse 10.2 .018 0.71 .014 -.004 0.58 .020 +.002 1.9 .011 -.007
Manistee 6.4 .011 0.44 .008 -.003 0.43 .015 +.004 2.4 .013 +.002
Ionia 13.7 .024 1.67 .032 +.008 0.54 .019 -.005 5.3 .029 +.005
Branch 12.5 .022 1.48 .028 +.006 0.54 .019 -.003 3.7 .021 -.001
Gratiot 12.6 .022 1.65 .032 -.010 0.54 .019 -.003 3.9 .021 -.001
Tuscola 13.9 .022 2.54 .049 +.027 0.67 .024 +.002 4.1 .023 +.001
Isabella 11.6 .020 1.33 .026 +.006 0.67 .024 +.004 2.2 .012 -.008
Van Buren 17.2 .030 2.47 .053 +.023 1.14 .040 +.010 5.8 .032 +.002
Wexford 6.3 .011 0.27 .005 -.006 0.37 .013 +.002 1.9 .011 0
Mason 7.4 .013 0.75 .014 +.001 0.39 .013 0 2.2 .012 -.001
Presque

Isle 4.2 .007 0.64 .014 +.007 0.17 .001 -.006 0.5 .002 -.005
Iosco 4.4 .007 0.32 .006 -.001 90.45 .015 +.008 0.8 .004 -.003
Hillsdale 12.3 .022 1.85 .036 +.014 0.60 .021 -.001 3.9 .021 -.001
Montcalm 13.6 .022 1.67 .032 +.010 0.58 .020 -.002 4.8 .023 +.001
Emmet 51.7 .090 0.37 .007 -.083 0.47 .017 -.073 0.7 .003 -.087
Charle-

voix 4,3 .007 0.39 .007 0 0.32 .011 +.004 1.2 .006 -.001
Otsego 2.4 .004 0.21 .004 0 0.18 .006 +.002 0.6 .003 -.001
Oceana 4.9 .007 0.97 .019 +.010 0.27 .009 +.002 1.7 .009 +.002
Benzie 2,5 .004 0.27 .005 +.001 0.16 .005 +.001 0.5 .002 -.002
Crawford 1.5 .002 0.03 .002 0 0.11 .002 0 0.4 .002 0
Newaygo 7.4 .013 1.13 .011. +.oi9 0.3 I.” o 2.6 .014 +.001
Osceola 4.6 .007 0.76 .014 +.007 0.29 .010 +.003 1.4 .008 +.001
Sanilac 10.9 .019 3.27 .063 +.044 0.47 .017. -.002 2.8 .015 -.003
Gladwin 3.3 .005 0.59 .011 +.006 0.29 .010 +.005 0.9 .005 0
Roscommon 2.2 .004 0.06 .002 -.002 0.30 .011 +.006 0.3 .001 -.003
Leelanau 2.9 .004 0.54 .011 +.007 0.25 .009 +.005 0.5 .002 -.002
Mecosta 6.7 .011 0.79 .015 +.004 0.34 .011 0 1.4 .003 -.003
Arenac 3.2 .005 0.48 .009 +.004 0.19 .007 +.002 0.8 .005 o
Clare 3.6 .005 0.32 .006 +.001 0.29 .010 +.005 1.1 .005 +.005
Oscoda 1.1 .001 0.15 .003 +.002 0.15 .001 0 0.2 .001 0
Antrim 3.2 .005 0.48 .009 +.004 0.25 .009 +.004 0.9 .005 0
Alcona 1.9 .004 0.29 .005 +.001 0.23 .008 +.004 0.3 .001 -.003
Cheboygan 3.9 .006 0.33 .006 0 0.47 .017 +.011 0.7 .003 -.003
Huron 10.3 .018 0.30 .006 -.012 0.48 .019 .+.001 1.8 .010 -.008
Kalkaska 1.3 .001 0.16 .003 +.002 0.13 .001 0 0.4 .001 0
Missaukee 2.1 .009 0.58 .011 +.017 0.10 .001 -.003 0.4 .001 ..003
Ogemaw 2.8 .005 0.39 .008 +.003 0.21 .007 +.002 0.6 .005 0
Montmorency 1.3 .001 0.19 .004 +.003 0.15 .001 0 0.2 .001 0
Lake 1.5 .001 0.17 .003 +.002 0.18 .007 +.006 0.3 .001 0

TOTAL 575.4 51.76 28.40 179.3
-.230 -.133 -.145
+.276 +.126 +.150
The Coefficient of Localization - Li .0025 .0013‘ .0015

Formula:

j (eij - ej)/100 for either

(eij - ej)>0

(eij - ej)<0

98

 

Business and

 

 

County Utilities ES?- ??- - §€. Mining Egg 811% - Sg- Personal £31 £9- - E?-
3 Services
Midland 0.53 .019 -.009 0.06 (.020 -.006 1.08 .029 +.001
Calhoun 2.81 .099 +.010 0.15 .050 -.029 3.57 .096 +.007
Berrien 2.79 .099 +.010 0.05 .017 -.080 3.94 .106 +.008
Shiawassee 1.51 .054 +.021 0.03 .010 -.023 1.19 .032 -.001
Lenawee 1.06 .038 -.008 0.03 .010 -.036 1.76 .048 +.002
Livingston 0.57 .020 -.003 0.12 .040 +.017 0.89 .024 +.001
Alpena 0.39 .014 -.002 0.08 .027 +.011 0.58 .016 0
St. Joseph 0.71 .025 -.004 0.01 .003 -.026 1.01 .027 -.002
Allegan 0.75 .026 -.008 0.09 .030 -.004 1.27 .034 0
Cass 0.64 .023 +.001 0.00 ..000 -.022 0.85 .023 +.001
St. Clair 3.44 .122 +.061 0.14 .047 -.014 2.58 .069 +.008
Barry .0.43 .015 -.004 0.03 .010 -.009 0.63 .017 -.002
Gr. Traverse 0.72 .026 +.008 0.01 .003 -.015 0.90 .024 +.006
Manistee 0.45 .016 +.005 0.01 .003 -.008 0.39 .010 -.001
Ionia 0.44 .016. -.008 0.00 .000 -.024 0.78 .021 -.003
Branch 0.57 .020 -.002 0.01 . 03 -.019 0.93 .025 +.003
Gratiot 0.72 .026 +.004 0.05 . 17 -.005 0.91 .024 +.002
Tuscola 0.57 .020 -.002 0.04 .013 -.007 0.78 .021 P.001
Isabella 0.39 .014 -.006 0.33 .110 +.090 0.96 .026 +.006
Van Buren 0.82 .029 -.001 0.02 .007 -.023 1.04 .028 -.002
Wexford 0.41 .014 +.003 0.00 .000 -.011 0.54 .014 +.003
Mason 0.86 .030 +.017 0.00 .000 -.013 0.46 .012 -.001
Presque Isle 0.65 .023 +.016 0.73 .256 +.249 0.19 .005 +.002
Iosco 0.31 .011 +.004 0.08 .026 +.019 0.45 .012 +.005
Hillsdale 0.52 .018 -.004 0.14 .046 +.024 0.79 .021 -.001
Montcalm 0.48 .017 -.005 0.03 .010 -.012 0.69 .020 -.002
Emmet 0.34 .012 -.078 0.00 .000 -.090 0.57 .019 -.071
Charlevoix 0.19 .007 0 0.00 .000 -.007 0.54 .014 +.007
Otsego 0.08 .003 -.001 0.00 .000 -.004 0.31 .008 +.004
Oceana 0.17 .006 +.001 0.06 .020 +.013 0.28 .008 +.001
Benzie 0.41 .014 +.010 0.00 .000 -.004 0.19 .005 +.001
Crawford 0.06 .002 0 0.00 .000 -.002 0.19 .005 +.003
NerYgo 0.39 .014 +.001 0.03 .010 -.003 0.49 .013 0
Osceola ' 0.25 .008 -.001 0.11 .037 +.030 0.32 .009 -.002
Sanilac 0.44 .016 -.003 0.05 .017 0 0.60 .016 -.003
Gladwin 0.04 .001 -.004 0.05 .017 +.015 0.27 .007 +.002
Roscommon 0.12 .004 0 0.05 .017 +.016 0.22 .006 +.002
Leelanau 0.09 .003 -.001 0.00 .000 -.004 0.27 .007 +.003
Mecosta 0.45 .016 +.005 0.06 .020 +.010 0.57 .019 +.008
Arenac 0.15 .005 0 0.10 .033 +.028 0.23 .006 +.001
Clare 0.18 .006 +.001 0.09 .030 +.025 0.31 .009 +.004
Oscoda 0.06 .002 +.001 0.00 .000 -.001 0.08 .002 +.001
Antrim 0.11 .003 +.002 0.00 .000 -.005 0.30 .008 +.003
Alcona 0.07 .002 -.002 0.00 .000 -.004 0.18 .005 +.001
Cheboygan - 0.23 .008 +.002 0.01 .003 -.006 0.48 .013 +.007
Huron 0.45 .016 -.002 0.06 .020 +.002 0.70 .019 -.001
Kalkaska 0.05 .002 +.001 0.00 .000 -.001 0.09 .002 +.001
Missaukee 0.04 .001 -.003 0.02 .005 +.002 0.12 .003 -.001
Ogemaw 0.13 .005 o 0.07 .023 +.018 0.25 .007 +.002
Montgomery 0.03 .001 0 0.00 .000 -.001 0.14 .003 +.002
Lake 0.08 .003 +.002 0.01 .003 +.002 0.25 .007 +.006
TOTAL 28.20 3.00 37.03
Formula: (e1j ’ °j)>°
Li - Ej [eij - ej] / 100 for either or
(eij - ej)<0

-.163 -.518 -.094

+.184 +.570 +.093
The Coefficient of Localization

Li-.0017 .0054 .0009

APPENDIX C

Y VALUE CALCULATIONS

APPENDIX C

Y VALUE CALCULATIONS

Y = 41.243 + 0.137 X 30.473 + 0.524 X 11.390 + 0.047

X 82.863 + 3.229 X 1.847 - 4.364 X 0.627 - 0.394

X 0.946 - 0.627 X 6.564 - 0.489 X 28.144 - 0.065

X 5.155 - 0.396 X 11.599 - 0.459 X 11.282 = 33.844

 

 

. Y+blAXl
Y1 = AX110% while X2+Xll are constant = _——Y__-
_ 33.844 + 0.137 X 3.047 _
‘ 33.844 “ 1'012
Per cent change = 1.012 X 100 - 100 = 1.2%
Y+b2AX2
Y2 = AX210% while X1,X3+Xll are constant = ———Y———
_ 33.844 + 0.524 X 1.139 _
' 33.844' ‘ 1°°17
Per cent change = 1.017 X 100 - 100 = 1.7%

99

Y

3

100

Y=b AX

AX310% while Xl,X2,X4+Xll are constant =

_ 33.844 + 0.047 X 8.286

’ 33.844 = 1°°11

 

Per cent change = 1.011 X 100 - 100 = 1.1%

p<

Y=b AX

AX410% while Xl+X3,X +X are constant =

5 11

_ 33.844 + 3.229 x 0.185
' 33.844

 

= 1.018

Per cent change = 1.018 X 100 - 100 = 1.8%

Y-b

AX510% while Xl+x4,x6+xll are constant =

_ 33.844 - 4.364 x 0.063

 

Per cent change = 0.992 X 100 - 100 = 0.9%

Y-b

9- . ' =
AX6100 while X1+X5,X7+Xll are constant

_ 33.844 - 0.394 x 0.095

‘ 33.844 = 0°993

 

Per cent change = 0.998 X 100 - 100 = 0.9%

Y-b

AX 10% while X

7 1+X6’X +X are constant =

8 11

33.844 - 0.627 X 0.656
33.844

 

= 0.988

Per cent change = 0.988 X 100 - 100 = 0.8%

4 4

Y

5Ax5
Y

AX

6 6
Y

7AX7
Y

101

Y-b AX

Y8 = AX810% while X1+X7,X9+Xll are constant =

K:

33.844 - 0.489 X 2.814

33.844 = 0°959

 

Per cent change = 0.959 X 100 - 100 = 0.6%

Y-b AX

Y9 = AX910% while X1+X8’X10'X11 are constant =

K19

_ 33.844 - 0.065 x 0.516
‘ 33.844

 

= 0.999

Per cent change = 0.999 X 100 — 100 = 0.9%

 

 

 

 

Y-blOAX10

YlO = AX1010% while X1+X9,Xll are constant = Y

_ 33.844 - 0.396 X 1.159 _

‘ 33.844 ‘ 0°986

Per cent change = 0.986 X 100 - 100 = 0.8%

Y‘b11Ax11

Yll = AX1110% while X1+X10 are constant = Y

_ 33.844 - 0.459 X 1.128 _

‘ 33.844 ' 0'985

Per cent change = 0.985 X 100 - 100 = 0.8%

"I7'11111111117111011'55