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Poverty in America…Still

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Ben Tafoya
April 24, 2023

Among the most intractable problems in U.S. public policy is the issue of poverty. According to the U.S. Census Bureau estimates for 2022, 12.8 percent of residents lived below the poverty level of $30,000 in annual income for a family of four. For children the rate is significantly higher at 16.9 percent. While for senior citizens, lower at 10.3 percent. Overall, this means that 37.9 million people live at or below the poverty threshold. The Census Bureau also uses a supplemental measure that examines poverty after taxes and transfers (social programs) that shows a lower overall rate of 7.8 percent as there is something of a safety net that assists those suffering from the circumstance of poverty. Yet the supplemental rate depended on programs which expired after a COVID era bump.

The dynamics of poverty in the United States are the subject of a new and important book by Matthew Desmond entitled Poverty, by America. His central thesis is that to understand poverty you must look at the institutional arrangements: political, economic, and social, which reveal the stunning inability of the richest country on earth to significantly reduce poverty. He rightly points out that while we measure poverty by income there are other important attributes that mark poverty including physical pain from lack of medical care, trauma from unmet needs, instability from precarious housing and employment, fear of things only getting worse, lack of liberty from the carceral state and diminished personhood because of a government and society that devalues them due to economic circumstance. 

The modern view of poverty was shaped in part by the 1962 publication of Michael Harrington’s work, The Other America. Written during the middle-class boom years of the post-WWII era it reminded America and the world that not everyone benefitted from the economic growth of the day. The book was credited with aiding the development of the War on Poverty, the Johnson Administration initiatives in health care, housing, community development and cash assistance which dramatically reduced the number of the poor. The poverty rate declined by half before the reaction of neoliberalism took hold and the progress abated.

Being poor is expensive. The economy and society are not oriented to help in ways that lower costs below the market. The alternative is social insurance programs for those that qualify. Despite what was identified by Harrington decades ago as a piecemeal approach to poverty reduction, we still have separate programs and qualifications for housing, food and medical assistance. Other social insurance programs help those with higher incomes more than the poor or near poor. For example, unemployment insurance provides greater benefits to those with middle or higher incomes than those of the working poor. Moreover, the upper middle class have arrangements that help them lower costs on everyday items. At a recent lunch with friends as we each handed over our credit cards, we started talking about the reason we used the card we did (2 percent cash back) and the other cards we used to get cash back on groceries (5 percent or 6 percent) or fuel (3 percent) or streaming services (3 percent). These are arrangements made for people with high credit scores not working people scrapping by paycheck to paycheck, let alone those in minimum wage jobs who can’t qualify for any card at all.

There are myriad actions that could be taken to relieve the burden of those who suffer from poverty. While we have depended heavily on the Earned Income Tax Credit for poverty relief, policy experts are realizing its inefficiency. There are successful experiments with guaranteed incomes/universal cash benefit which have proven to encourage work more effectively and can provide a better buffer for economic downturns. Some of these ideas were used in the COVID era relief bills that boldly extended the child tax credit and expanded Medicaid eligibility. Sadly, both actions have now expired and that is putting significant economic pressure on the poor. This on top of the states that never expanded Medicaid per the provisions of the Affordable Care Act.

Desmond realizes, like Harrington before him, that market mechanisms will not solve the problem of affordable housing or lack of medical care or poverty in general. The use of incentives, such as tax advantages for savings give us wealthy people with billions in tax advantaged retirement accounts. Public policy in the United States has such ambivalence toward government action that directly addresses problems with solutions. Housing shortage? Have government build rather than changing zoning and hoping the market responds. Food insecurity? Expensive childcare? Give families funds to directly offset the cost. Poverty is a condition defined by lack of income. The consequences for those that are poor, well documented in Desmond’s work, are pain and trauma and jail and hunger.

We can do better.

Author: Dr. Ben Tafoya is an adjunct faculty member at Northeastern University in Boston teaching Economics. Ben is the author of a chapter on social equity and public administration in the recently published volume from Birkdale, Public Affairs Practicum. He can be reached at [email protected] or Mastodon @[email protected] . All opinions and mistakes are his alone.

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