How Poverty Helps the Rest of Us

Posted on June 13, 2021 by L Franz

Ezra Klein of The New York Times writes about poverty and the American economy:

I’m not going to pretend that I know how to interpret the jobs and inflation data of the past few months. My view is that this is still an economy warped by the pandemic, and that the dynamics are so strange and so unstable that it will be some time before we know its true state. But the reaction to the early numbers and anecdotes has revealed something deeper and more constant in our politics.

The American economy runs on poverty, or at least the constant threat of it. Americans like their goods cheap and their services plentiful and the two of them, together, require a sprawling labor force willing to work tough jobs at crummy wages. On the right, the barest glimmer of worker power is treated as a policy emergency, and the whip of poverty, not the lure of higher wages, is the appropriate response.

Reports that low-wage employers were having trouble filling open jobs sent Republican policymakers into a tizzy and led at least 25 Republican governors — and one Democratic governor [the one in Louisiana] — to announce plans to cut off expanded unemployment benefits early. Chipotle said that it would increase prices by about 4 percent to cover the cost of higher wages, prompting the National Republican Congressional Committee to issue a blistering response: “Democrats’ socialist stimulus bill caused a labor shortage, and now burrito lovers everywhere are footing the bill.” The [right-wing] outlet The Federalist complained, “Restaurants have had to bribe current and prospective workers with fatter paychecks to lure them off their backsides and back to work.”

But it’s not just the right. The financial press, the cable news squawkers and even many on the center-left greet news of labor shortages and price increases with an alarm they rarely bring to the ongoing agonies of poverty or low-wage toil.

As it happened, just as I was watching Republican governors try to immiserate low-wage workers who weren’t yet jumping at the chance to return to poorly ventilated kitchens for $9 an hour, I was sent “A Guaranteed Income for the 21st Century,” a plan that seeks to make poverty a thing of the past. The proposal, developed . . . for the New School’s Institute on Race and Political Economy, would guarantee a $12,500 annual income for every adult and a $4,500 allowance for every child. It’s what wonks call a “negative income tax” plan — unlike a universal basic income, it phases out as households rise into the middle class.

“With poverty, to address it, you just eliminate it,” [one of the authors, Darrick Hamilton] told me. “You give people enough resources so they’re not poor.” Simple, but not cheap. The team estimates that its proposal would cost $876 billion annually. To give a sense of scale, total federal spending in 2019 was about $4.4 trillion, with $1 trillion of that financing Social Security payments and another $1.1 trillion support Medicaid, Medicare, the Affordable Care Act and the Children’s Health Insurance Program.

Beyond writing that the plan “would require new sources of revenue, additional borrowing or trade-offs with other government funding priorities,” [the authors] don’t say how they’d pay for it, [but] it’s clearly possible. Even if the entire thing was funded by taxes, it would only bring America’s tax burden to roughly the average of our peer nations.

I suspect the real political problem for a guaranteed income isn’t the costs, but the benefits. A policy like this would give workers the power to make real choices. They could say no to a job they didn’t want, or quit one that exploited them. They could, and would, demand better wages, or take time off to attend school or simply to rest. When we spoke, Hamilton tried to sell it to me as a truer form of capitalism. “People can’t reap the returns of their effort without some baseline level of resources,” he said. “If you lack basic necessities with regards to economic well-being, you have no agency. You’re dictated to by others or live in a miserable state.”

But those in the economy with the power to do the dictating profit from the desperation of low-wage workers. One man’s misery is another man’s quick and affordable at-home lunch delivery. “It is a fact that when we pay workers less and don’t have social insurance programs that, say, cover Uber and Lyft drivers, we are able to consume goods and services at lower prices,” Hilary Hoynes, an economist at the University of California at Berkeley . . .

This is the conversation about poverty that we don’t like to have: We discuss the poor as a pity or a blight, but we rarely admit that America’s high rate of poverty is a policy choice, and there are reasons we choose it over and over again. We typically frame those reasons as questions of fairness (“Why should I have to pay for someone else’s laziness?”) or tough-minded paternalism (“Work is good for people, and if they can live on the dole, they would”). But there’s more to it than that.

It is true, of course, that some might use a guaranteed income to play video games or melt into Netflix. But why are they the center of this conversation? We know full well that America is full of hardworking people who are kept poor by very low wages and harsh circumstance. We know many who want a job can’t find one, and many of the jobs people can find are cruel in ways that would appall anyone sitting comfortably behind a desk. We know the absence of child care and affordable housing and decent public transit makes work, to say nothing of advancement, impossible for many. We know people lose jobs they value because of mental illness or physical disability or other factors beyond their control. We are not so naïve as to believe near-poverty and joblessness to be a comfortable condition or an attractive choice.

Most Americans don’t think of themselves as benefiting from the poverty of others, and I don’t think objections to a guaranteed income would manifest as arguments in favor of impoverishment. Instead, we would see much of what we’re seeing now, only magnified: Fears of inflation, lectures about how the government is subsidizing indolence, paeans to the character-building qualities of low-wage labor, worries that the economy will be strangled by taxes or deficits, anger that Uber and Lyft rides have gotten more expensive, sympathy for the struggling employers who can’t fill open roles rather than for the workers who had good reason not to take those jobs. These would reflect not America’s love of poverty but opposition to the inconveniences that would accompany its elimination.

Nor would these costs be merely imagined. Inflation would be a real risk, as prices often rise when wages rise, and some small businesses would shutter if they had to pay their workers more. There are services many of us enjoy now that would become rarer or costlier if workers had more bargaining power. We’d see more investments in automation and possibly in outsourcing. The truth of our politics lies in the risks we refuse to accept, and it is rising worker power, not continued poverty, that we treat as intolerable. You can see it happening right now, driven by policies far smaller and with effects far more modest than a guaranteed income.

Hamilton, to his credit, was honest about these trade-offs. “Progressives don’t like to talk about this,” he told me. “They want this kumbaya moment. They want to say equity is great for everyone when it’s not. We need to shift our values. The capitalist class stands to lose from this policy, that’s unambiguous. They will have better resourced workers they can’t exploit through wages. Their consumer products and services would be more expensive.”

For the most part, America finds the money to pay for the things it values. In recent decades, and despite deep gridlock in Washington, we have spent trillions of dollars on wars in the Middle East and tax cuts for the wealthy. We have also spent trillions of dollars on health insurance subsidies and coronavirus relief. It is in our power to wipe out poverty. It simply isn’t among our priorities.

“Ultimately, it’s about us as a society saying these privileges and luxuries and comforts that folks in the middle class — or however we describe these economic classes — have, how much are they worth to us?” Jamila Michener, co-director of the Cornell Center for Health Equity, told me. “And are they worth certain levels of deprivation or suffering or even just inequality among people who are living often very different lives from us? That’s a question we often don’t even ask ourselves” . . .

Helping Helps

Posted on January 26, 2021 by L Franz

The Biden administration and House Democrats are working on legislation that would send monthly checks to people with children:

In one draft of the proposal, the IRS would deposit checks worth $300 every month per child younger than 6 and $250 every month per child age 6 to 17. This would give parents $3,000 per year for each child between the ages of 6 to 17, and $3,600 per child under age 6. . . .

Eligibility for the benefit, similar to the stimulus checks, would be based on family income for the prior tax year and be phased out at a certain income amount . . .

Paul Krugman thinks it’s a very good idea: “it could, among other things, cut child poverty in half”:

America stands out among wealthy countries for its failure to provide much help to families with children. U.S. expenditures on family benefits as a share of G.D.P. are less than a third the rich-nation average. Largely as a consequence, we have a much higher rate of child poverty than our peers.

Our stinginess does a lot of harm. Economists have shown that previous extensions of aid to families with children, like the gradual rollout of food stamps in the 1960s and 1970s and the expansion of Medicaid in the 1980s, didn’t just improve children’s lives in the short run; children who received the aid grew into healthier, more productive adults than those who didn’t receive the aid. By not doing even more for children, we are stunting their future, and that of the nation as a whole.

And aid to children would achieve what proponents of the tax cut promised but failed to deliver: an improvement in America’s long-run economic prospects. If the children we help today grow up into healthier, more productive adults than they would otherwise — which they will — that will eventually mean higher G.D.P.

And aid to children would also indirectly help the budget, because those children would later pay more in taxes and be less likely to call on safety net programs. These fiscal benefits might even be big enough that helping children pays for itself, and in any case they mean that the true cost of aiding children, even in narrowly fiscal terms, would be less than it might appear.

All in all, then, increased aid to families with children is a really good idea. It would immediately improve millions of Americans’ lives, it would make us stronger in the future, and it would have only modest budget costs.

By “modest”, Krugman means it would cost around half of the 2017 Republican tax cut, which mainly benefited the rich. Of course, there will be Republican opposition:

We’ll surely hear some version of the standard conservative argument that any policy reducing misery reduces the incentive to be self-sufficient — you know, unemployment insurance encourages people to stay unemployed, food stamps encourage them to be lazy, and so on. Making this argument about a broad-based program to help children will be hard, but they’ll find a way.

He discusses a broader issue in his NY Times newsletter:

What should we do about Americans with low income — and their children? Should we make a new push to reduce or eliminate poverty, and if so, what should it involve?

. . . As with everything else in modern America, the two parties have starkly different positions on this issue. . . . I don’t believe that the Republican position on this, or for that matter on any major policy issue I can think of, reflects a good-faith attempt to figure out what works best. But the expressed views of the parties do show a big divide about how the world works.

The Republican view is basically that anti-poverty programs aren’t the solution, they’re the problem. How so? When you have “means-tested” programs — programs that are only available to people with sufficiently low incomes, or that phase out as income rises — you are in effect imposing high marginal tax rates on the relatively poor. That is if, say, a single mother manages to increase her earnings from $15,000 to $20,000 a year, she will find much of that extra $5,000 taken away in the form of reduced benefits.

This high de facto taxation, conservatives say, discourages efforts to break out of poverty. And they also say that it fosters a culture of dependency. So they argue that to help the poor we should, well, offer them less help.

Progressives don’t deny that incentives can matter. To use one of my favorite examples, countries that offer generous benefits to people who retire early, like France, end up with many people, you guessed it, retiring early.

But economists on the center left generally argue that the disincentives created by anti-poverty programs are exaggerated, and that the main thing actually trapping people in poverty is a lack of resources: It’s hard to get an education, start a business, even move to a place where jobs are available, when you have no money in the bank and are living hand-to-mouth.

Also, being poor imposes a lot of cognitive stress: It’s hard to focus on self-improvement when you’re constantly worrying about where the next rent check will come from or how to pay medical bills.

If you see resources as the main problem for the poor, the answer to poverty is to provide more resources; this doesn’t just improve the lives of the poor in the short run, it also increases their chances of breaking free of the poverty cycle.

This is the kind of debate that should be settled with evidence. And for what it’s worth, there is growing evidence that the resources view of poverty is much closer to the truth than the incentives view. . . . This is especially true for programs that help families with children, which seem to improve the lives of those children long after they’ve matured past receiving aid.

It Wouldn’t Be Hard to End Poverty in America

Posted on January 5, 2021 by L Franz

If we were willing to share the wealth. From Jacobin Magazine:

The poor in our nation are often blamed for their own crises, with lawmakers and even service providers citing bad behavior or ignorance as the cause of individual poverty.

In Broke in America, Joanne Goldblum and Colleen Shaddox reject that narrative. US policies that benefit the wealthy cause poverty, they insist — and changes to those policies can end it.

Fran Quigley interviewed Goldblum and Shaddox for Jacobin.

Almost immediately in this book, you confront the maxim, “Give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for a lifetime”: “Antipoverty efforts should stop making assumptions about people’s fishing abilities,” you write. “It’s past time to stop judging and give that hungry person a fish.” Why did you take that on?

That saying summarizes everything that’s wrong with how the United States addresses poverty: we say the problem is the person, so we need to fix the person and what that person lacks in skills. But does he even have a fishing pole? Is he too weak with hunger to go fish? Is the “he” in question actually a woman, and women aren’t allowed to fish there?

It’s so paternalistic and so horrible. Yet people say it all the time, like they’ve said something wise and caring.

At the policy level, we create systems that actually make it harder for people to be self-sufficient.

For example, many people who are part of the TANF (Temporary Assistance for Needy Families) or workforce development programs are trained to become certified nursing assistants, CNAs. That’s a very important job that we need to do. But it is a poverty-wage job. By and large, people who work in those positions don’t have workplace benefits and are not paid a living wage. But the government trains someone to be a CNA and then it can feel like it’s done something because it’s gotten that person off of the rolls.

You devote a good deal of the book to reviewing the data and the stories that describe US poverty, but you always circle back to solutions, refuting the idea we often hear that “the poor will always be with us.” Why do you think we can, as your subtitle promises, end poverty in the United States?

Because poverty is simply not having enough money to meet your needs. There is nothing more complicated about it than that. And we live in the richest nation in the world, where there is plenty of money. So if we have the political will, we could end poverty.

There are lots of different ways to do it. A living wage is necessary . . . We talk in the book about universal health care, housing supports, about making water and electricity and heat a public good. Other countries do all this, and there is no reason we could not do so as well. If we just tax people appropriately, we can have the money to do all this.

We write about challenges in affording car insurance in places where you need a car to get to work, the difficulty in keeping the lights on, not being able to afford medicines. Being in poverty is like walking across a rotted floor — there are so many ways you can fall through. And it all comes down to money.

[There] is a lot of money that’s churning around in our economy, but it’s not being shared appropriately. And by “shared,” I don’t mean some generous act. I mean that the worker in the warehouse who is making everything run deserves a fair share of the revenue he is generating. We don’t have that now.

You both have worked with poor people in the United States for a long time. But you write that it took a while for you to come to your own realizations that our approach to confronting poverty is fundamentally flawed.

I was a social worker doing direct service with chronically homeless families. When they did have homes, they often did not have heat and hot water. One mom who I worked with never had toilet paper and often did not have clean diapers. . . . It turned out there was no choice involved: there was nothing more than the fact that she couldn’t afford these basic necessities. . . .

At the soup kitchen where I worked, you would always have people after the meal asking, “Do you have 75 cents for the bus?” I used to think, gosh, we should teach them planning skills, how to think more long-term. Because they knew when they came to the soup kitchen, they had to get back home. Later on, I realized: they were hungry, and they got 75 cents somehow to come to the soup kitchen to eat in the first place. That was the wise survival strategy.

So often we make judgments about poor people’s motivation and cognition that are really a reflection of not having resources. I do a lot of work in the criminal legal system, and motivation is a big deal. Do they show up for their appointments? Do they return phone calls?

Well, to show up for an appointment, you need transportation and childcare. To return phone calls, you need a working phone. The written notices may be written in a language they don’t speak. And on and on. It’s very much like that woman who didn’t have toilet paper: she didn’t need a lecture on being a better parent; she needed toilet paper. And the guys at the soup kitchen that I was making judgments about — they needed 75 cents for the bus.

You have your own experiences addressing poverty, you spoke with experts, and you did your own policy research. Why did you consider it important to include in the book the stories of people living in poverty?

These stories matter. There is a certain symbolic annihilation of people in poverty in this country. You watch a situation comedy, and everybody lives in a house with a glittering kitchen with granite countertops. We don’t represent poor people in the world in either nonfiction or fiction terribly much. And when we do, we often reduce them to stereotypes. Colleen really insisted that we interview people from all over the country, to make it clear that poverty exists everywhere in the United States, and that it is not one community, one group, one area, one city. You can go anywhere and find people who are experiencing these issues.

As frontline service providers who have dealt with these practical problems of poverty, why did you include chapters on racism, sexism, and denial of political power?

When you look at any indicator of poverty — who doesn’t have water in their house, who has food insecurity, who dies sooner — you see that race matters. And you can say the same for gender. Women are more likely to be in poverty, more likely to be in extreme poverty. It’s not just that the world is unfair to poor people. It’s doubly unfair when you belong to another oppressed group. There were some communities that are not just left behind, but consciously excluded from prosperity.

That means that part of ending poverty is taking down structures that block access to the political process, educational opportunities, and on and on. For example, we write in the book about redlining and racism in housing policy at all levels. Colleen and I were very intentional about saying these things out loud and clearly, so people cannot pretend that racism and other structural inequalities don’t impact the struggles we are talking about.

You mention other nations’ approaches to basic needs. The United States has a dramatically higher poverty rate than other wealthy nations and dramatically greater levels of income and wealth inequality. What are other countries doing right that we don’t do here?

They establish some sort of floor. There is no floor in the United States — there is no depth of poverty that you can’t fall to. We have made TANF time-limited, we have enacted policies to make SNAP [Supplemental Nutrition Assistance Program, formerly Food Stamps] time-limited. You can be literally left out in the cold here.

One of the biggest things that’s different about the United States than most other countries is that you can become bankrupt due to medical debt. Not having guaranteed health care and the likelihood of accumulating debt related to health care is uniquely American and incredibly dangerous. . . .You talk to people around the world, and they just are gobsmacked that we allow this. . . .

What led you down the path of devoting your professional careers to anti-poverty work?

From the time that I can remember, the work that I felt called to do was being a social worker. My mother was a social worker who focused on reproductive rights, and my father was an attorney who did a lot of pro bono work with the ACLU and other causes. . . .

I grew up in New Jersey and was very lucky to go to Hunter College School of Social Work, which teaches what they refer to as Jane Addams social work: not therapy in an office, but changing systems and working to support people.

Probably the defining moment of my life was when I was a very young child, about five or six. My mom was a waitress who worked incredibly hard to support us all. At night, when her feet were just aching, she would put her feet in a tub of Epsom salts. One night I was sitting on the floor playing next to her and I saw the basin fill up with blood because her calluses and blisters had cracked. And I remember thinking: People don’t know how hard her life is, because if they knew they would help. When I grow up, I’m going to write stories about people like my mom. . . .

I know Colleen is an active Democratic Socialists of America member, and Joanne describes herself as “a little left of liberal.” How far removed from our current U.S. political reality are your prescriptions for ending poverty?

I am a socialist. But you can have onions in a soup without it being onion soup, right? Many of the policies we’re calling for are things that could be labeled socialist, but they’re going on in other capitalist countries. For example, Japan is a very capitalist country where childcare is free. We have just taken capitalism to a really toxic extreme in the United States.

There have been a lot of books written on poverty, and certainly a lot of media coverage. Who were you aiming to reach with this book?

We wrote this for people who consider themselves to be progressive and may be sympathetic to the poor. But they also have heard the line that poverty is an individual failing or think that it is unsolvable. It’s not.

Eviction vs. Conviction

Posted on July 30, 2019 by L Franz

We hear a lot about criminal justice in America and how it adversely affects the lives of black men in particular. A similar story should be told about housing in America and how it adversely affects the lives of black women. Lots of black men get convicted. Lots of black women get evicted.

Katha Pollitt’s 2016 review of “Evicted”, by Matthew Desmond, in The Guardian:

What if the dominant discourse on poverty is just wrong? What if the problem isn’t that poor people have bad morals – that they’re lazy and impulsive and irresponsible and have no family values – or that they lack the skills and smarts to fit in with our shiny 21st-century economy? What if the problem is that poverty is profitable? These are the questions at the heart of Evicted, Matthew Desmond’s extraordinary ethnographic study of tenants in low-income housing in the deindustrialised middle-sized city of Milwaukee, Wisconsin.

You might not think that there is a lot of money to be extracted from a dilapidated trailer park or a black neighbourhood of “sagging duplexes, fading murals, 24-hour daycares”. But you would be wrong. Tobin Charney makes $400,000 a year out of his 131 trailers, some of which are little better than hovels. Sherrena Tarver, a former schoolteacher who is one of the only black female landlords in the city, makes enough in rents on her numerous properties – some presentable, others squalid – to holiday in Jamaica and attend conferences on real estate.

Desmond follows the intertwined fortunes of eight families and a host of minor characters. Arleen Belle and Doreen Hinkston are black mothers clinging to the edge of low-wage employment; Crystal and Trisha are fragile young black women whose upbringing was violent and chaotic; Lamar is a genial black father of two who lost both his legs to frostbite when he passed out on crack in an abandoned house; Scott is a white male nurse who lost his licence when he stole opioids from his patients; Larraine, also white, is a slightly brain-damaged sweet soul. It is sometimes a little hard to keep up with the storylines as they weave in and out of the text, but no matter. What is important is that Desmond takes people who are usually seen as worthless – there is even a trailer-dweller nicknamed Heroin Susie – and shows us their full humanity, how hard they struggle to retain their dignity, humour and kindness in conditions that continually drag them down.

The main condition holding them back, Desmond argues, is rent. The standard measure is that your rent should be no more than 30% of your income, but for poor people it can be 70% or more. After he paid Sherrena his $550 rent out of his welfare cheque, Lamar had only $2.19 a day for the month. When he is forced to repay a welfare cheque he has been sent in error and falls behind on rent, he sells his food stamps for half their face value and volunteers to paint an upstairs apartment, but it is not enough. People such as Lamar live in chronic debt to their landlord, who can therefore oust them easily whenever it is convenient – if they demand repairs, for example, like Doreen, or if a better tenant comes along. Sherrena liked renting to the clients of a for-profit agency that handles – for a fee – the finances of people on disability payments who can’t manage on their own. Money from government programmes intended to help the poor – welfare, disability benefits, the earned-income tax credit – go straight into the landlord’s pocket and, ironically, fuel rising housing costs. Public housing and housing vouchers are scarce. Three in four who qualify for housing assistance get nothing.

Even in the Great Depression, evictions used to be rare. Now, each year, hundreds of thousands, perhaps millions, of renters are put out on the street. Even a paid-up tenant can be easily evicted. Arleen loses one apartment when her son Jori throws a snowball at a passing car and the enraged driver kicks in the front door, and another when the police come after Jori when he kicks a teacher and runs home. Any kind of trouble that brings the police can lead to eviction, which means women can lose their homes if they call 911 when their man beats them up. Think about that the next time someone asks why women don’t call the cops on violent partners.

As Desmond shows, the main victims of eviction are women. Why? They are paid less than men for doing the same job. They are less able to make deals with their landlord, who is almost always a man, to work off part of their rent with manual labour. The main reason, though, is that women are raising children as single mothers. They not only have all the costs and burdens of childrearing, they need bigger apartments – which, since landlords dislike renting to families with young children, are harder to find and a lot harder to keep. Other sociologists – Kathryn Edin, for example – have found that single mothers often get help under the table from their children’s fathers, but Arleen, Doreen and Doreen’s adult daughter Patrice get mostly trouble from men, who are variously abusive, addicted, vanished or in prison. In one of the book’s many small sad moments, Arleen claims she receives child support in order to seem more stable and respectable to a prospective landlord. In fact, she gets nothing.

Desmond lays out the crucial role housing plays in creating and reinforcing white privilege. In Milwaukee, one of the most segregated cities in the US, all black people suffer from housing discrimination and all white people benefit at least a little from the racial dividend – a landlord who will rent to them but not to black people, for instance, or offer them a nicer apartment. Black people have the worst housing in the worst neighbourhoods – the great fear of the trailer-park people, who are all white, is that they will end up on the black side of town. Eviction hits black women hardest of all, and the bleak benches of housing courts, which deal with disputes between landlords and tenants, are full of black women and their children: “If incarceration had come to define the lives of men from impoverished black neighbourhoods, eviction was shaping the lives of women. Poor black men were locked up. Poor black women were locked out.”

An evicted woman watches as a removal company moves her property out of her rented apartment on to the pavement. — **An evicted woman watches as employees of a storage company remove her belongings to place them on the pavement in front of her rented apartment. Photograph: Sally Ryan/Zuma Press/Corbi**s

What are the social costs of eviction? It puts incredible stress on families. It prevents people from saving the comparatively small sums that would let them stabilise their situation. They are always starting over from scratch, losing their possessions in the chaos of removal, or putting them in storage and losing them when they can’t pay the fees. An eviction on your record makes the next apartment harder to get. Eviction damages children, who are always changing schools, giving up friends and toys and pets – and living with the exhaustion and depression of their parents. We watch Jori go from a sweet, protective older brother to an angry, sullen boy subject to violent outbursts who is falling way behind in school.

Eviction makes it hard to keep up with the many appointments required by the courts and the byzantine welfare system: several characters have their benefits cut because notices are sent to the wrong address. Eviction destroys communities: when people move frequently, they don’t form the social bonds and pride in place that encourage them to care for their block and look out for their neighbours. “With Doreen’s eviction, Thirty-Second Street lost a steadying presence – someone who loved and invested in the neighbourhood, who contributed to making the block safer – but Wright Street didn’t gain one.”

“There is an enormous amount of pain and poverty in this rich land,” Desmond writes in his conclusion. That is easy to say, and many books by journalists and academics have done so. By examining one city through the microscopic lens of housing, however, he shows us how the system that produces that pain and poverty was created and is maintained. I can’t remember when an ethnographic study so deepened my understanding of American life.to all and safeguarding our independence.

Dollars and Poverty

Posted on May 2, 2014 by L Franz

Republican Congressman Paul Ryan, chairman of the House Budget Committee, is worried that the federal government spends too much money trying to help poor people:

“The question isn’t whether the federal government should help; the question is how,” Mr. Ryan said at [a committee] hearing on Wednesday. “How do we make sure that every single taxpayer dollar we spend to reduce poverty is actually working?”

Can you imagine someone like Ryan ever wanting to make sure that every single dollar spent on the military is actually working? I can’t.

The quote above comes from a New York Times article called “Changed Life of the Poor: Better Off But Far Behind”. The article describes the economic situation facing the poor today:

Two broad trends account for much of the change in poor families’ consumption over the past generation: federal programs and falling prices.

Since the 1960s, both Republican and Democratic administrations have expanded programs like food stamps and the earned-income tax credit….

As a result, the differences in what poor and middle-class families consume on a day-to-day basis are much smaller than the differences in what they earn.

“There’s just a whole lot more assistance per low-income person than there ever has been,” said … a senior research fellow at the conservative Heritage Foundation. “That is propping up the living standards to a considerable degree,” he said, citing a number of statistics on housing, nutrition and other categories.

[At the same time], the same global economic trends that have helped drive down the price of most goods also have limited the well-paying industrial jobs once available to a huge swath of working Americans. And the cost of many services crucial to escaping poverty — including education, health care and child care — has soared.

So, for example:

Tammie Hagen-Noey, a 49-year-old living in Richmond, Va., tapped at an iPhone as she sat on the porch of the group home where she lives… She earns $7.25 an hour at a local McDonald’s, and makes a little extra money on the side from planting small plots of land for neighbors….A few months ago, she sold her car for $500 to make rent.

Almost everybody could manage their spending better (even members of Congress) and that woman in Virginia presumably didn’t spend hundreds of dollars to buy the latest iPhone. Human beings get into all kinds of trouble, because of their own mistakes or through no fault of their own, and will continue to need help from the rest of us, even if every single dollar intended to help them doesn’t “work”. Republicans claim that cutting taxes and reducing regulations will create lots of better-paying jobs, allowing us to spend less on government assistance for the poor. What they’re really advocating is a race to the bottom, with more inequality, dangerous workplaces, pollution and unsafe food. Since we have to compete in a global economy, we’ll end up closer to the economic middle in future decades (nobody stays on top forever), but we shouldn’t race to become worse off.

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Tag Archives: Poverty

How Poverty Helps the Rest of Us

Eviction vs. Conviction

Dollars and Poverty

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