Number of Very Poor Americans Surges Since 1996

The super-rich aren’t the only ones whose ranks (and collective wealth) are growing. To further highlight just how wide the gap of inequality is growing, in less than two decades, the number of Americans living on just two dollars a day has more than doubled. That means 1.5 million households, including 3 million children. As CBS reports, the inherent contradiction of the world’s richest country having so many poor people is no coincidence.

“Most of us would say we would have trouble understanding how families in the county as rich as ours could live on so little,” said author Kathryn Edin, who spoke on a conference call to discuss the book, which she wrote with Luke Shaefer. Edin is the Bloomberg Distinguished Professor of Sociology at Johns Hopkins University. “These families, contrary to what many would expect, are workers, and their slide into poverty is a failure of the labor market and our safety net, as well as their own personal circumstances.”

To be sure, the labor market has been rocky for many Americans, not just the poorest. But changes in how employers deal with their low-wage workers have hit many of these poor Americans especially hard, such as the rise of on-call scheduling, which leaves some parents scrambling for hours and dealing with unpredictable pay.

Retailers such as Walmart (WMT) and fast-food companies increasingly are using sophisticated scheduling software that allows them to tinker with work schedules at the last minute, depending on their stores’ needs. That reduces costs for the employer, but it can make life difficult for employees, especially those with children and dependents.

“Time and time again, we would constantly see people’s hours cut from week to week,” said Shaefer, associate professor of social work at University of Michigan. “Someone might have 30 hours one week, down to 15 the next and down to 5 after that. We saw people who would remain employed but were down to zero hours. This was incredibly common in this population.”

Other workforce problems include abuses such as wage theft and unhealthy workplaces, which lead to health problems and missed work, he noted.

And while the private sector, by its own actions, fails to prove why people shouldn’t turn to the government for help, it has also done a good job in rallying people against the policies that would help compensate their own ruthless approach to business.

These families have also been hurt by the welfare reform of the 1990s, when America’s social safety net was overhauled to create Temporary Assistance for Needy Families (TANF), which is geared toward providing temporary monetary aid to poor families with children.

But TANF isn’t working, Shaefer and Edin said. Since the program was created in 1996 to replace a 60-year-old welfare system, the number of families living on less than $2 a day has more than doubled. In 2012, only one-quarter of poor families received TANF benefits, down from more than two-thirds in 1996, according to the Center on Budget and Policy Priorities. According to “$2.00 a Day,” the welfare program reached more than 14.2 million Americans in 1994, but by 2014 only 3.8 million Americans were aided by TANF.

The authors’ research — which included data analysis and interviews with ultrapoor families in four regions — found that many families weren’t even aware of TANF. “One person said, ‘They aren’t just giving it out anymore,'” Shaefer said. “In fact, in Appalachia it has, in some ways, disappeared. We asked, ‘Have you thought about applying for TANF?’ and they said, ‘What’s that?'”

Aside from a lack of knowledge about the program, poor Americans often put off applying for aid because of social stigma and other hurdles, such as requirements to attend orientation meetings, make employment plans and register for employment services.

Perhaps even more disquieting than the growing legions of the poor — which is again occurring during the simultaneous concentration of vast wealth in the upper echelons of society — is how these people get by day to day.

They tend to rely on a few strategies, including selling their own plasma for $30 a pop and selling scrap metal. Some families also sell their food stamp benefits for cash, which is illegal and which Edin said is “very unusual.”

Some women barter for goods and services using sex. Private charities provided very little assistance. Dealing in drugs wasn’t common, Edin said, perhaps because the researchers were interviewing families, which might be less likely to engage in drug use given the presence of children.

“In no cases did [these strategies] raise people out of poverty,” Edin said. “$60 would be the maximum per week” for earnings through these methods. “There was no case where someone was living high off the hog from this informal economy.”

There is not much else to say. It should be patently obvious that a society with as much capital and resources as our own should not have the developed world’s second highest rate of child poverty. This is a resounding political and moral failure, on the part of both business leaders and public officials (though certainly many Americans bear no small amount of guilt for often favoring the shaming and deprivation of the poor — even when it includes themselves). The culture problems at the heart of this tragedy merit a whole other post.

What are your reactions and thoughts?

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