Poverty in America, Why So Bad, and What to Do About It

Citizen Wealth Financial Justice

New Orleans      The answer to the perpetually plaguing question of why we have such intractable poverty in the United States, arguably the richest country in the world, is always perplexing.  Every comparison of the US with other economically developed countries finds us at or near the bottom.  Recently the conservative business weekly, The Economist, looked at the issue with a different set of eyes to try to determine why the results of spending trillions over the years still has us struggling.

The heart of their argument is that our poverty programs focus on the “problems of the past, largely elderly and the working poor, leaving behind non-working adults and children.”  And it shows:

  • 40 million poor in 2017 or 12% of the population that amounts to individuals in a family of four living on $17.64 per day.

  • 18..5 people make only half that amount.

  • Children fare the worst with 13 million in poverty or 17.5% of all American children.

The Economist writers were not afraid to ask “Why?”  Their answer: “the safety net does not work as elsewhere.”

Countering the rightwing consensus, they argue that the poverty program has been a success, as far as it went.  Using the supplemental poverty measure, the “1967 safety-net taxes and transfers barely dented poverty:  26.4% of Americans were poor before, and 25% remained poor after.  Without a safety net, nearly the same proportion of Americans… would be poor today as were 50 years ago.”

No back-patting though.  They also find that poverty is now moving to the suburbs where 15% are at that level compared to 11% in cities.  Youngstown, Ohio gets special attention as sinking fast and Cleveland, where half of the children live in poverty, is no model despite some claims and hype.

Of course, poverty is also not colorblind with people of color paying the most painful prices for poverty.  With reparations in the news but not likely on a short list of potential policy agreements not matter the overwhelming justice that lies in the arguments, what are race-neutral problems that would move the needle?

The Economist doesn’t have the answer here, but refreshingly they do not default to the notion that philanthropy and charity are the answer.  Even with total charitable giving at $438 billion, that only accounts for 2.1% of GDP, and despite all the claims of the techsters and the rich who claim they know and do better, “charitable giving has stayed roughly the same for 40 years,” as they point out.

What might help break the cycle?

Help on rent and more affordable housing, they recognize, as we have argued, would be huge.  A lot more investment in children, which means more for HeadStart, an entitlement to daycare for all, and other programs perhaps too far out for their taste would also move the needle.

Of course, just plain cash support for out of work men and women and a restoration of welfare supports that make a difference for mothers and their young children, would be huge.  Just saying, because The Economist hinted at those answers without advocating them.