U.S. Leads Developed World in Child Poverty

Over the past six years, America’s wealth expanded by over $30 billion — a growth rate of 60 percent — despite the weak recovery. During the same span of time, another metric grew by that percentage: the number of homeless and food insecure children.

As Raw Story reports, despite its vast and ever-growing wealth, the world’s richest country by a considerable margin lags behind most other developed nations in measurements of child poverty.

America is a ‘Leader’ in Child Poverty

The U.S. has one of the highest relative child poverty rates in the developed world. As UNICEF reports, “[Children’s] material well-being is highest in the Netherlands and in the four Nordic countries and lowest in Latvia, Lithuania, Romania and the United States.”

Over half of public school students are poor enough to qualify for lunch subsidies, and almost half of black children under the age of six are living in poverty.

$5 a Day for Food, But Congress Thought it was Too Much.

Nearly half of all food stamp recipients are children, and they averaged about $5 a day for their meals before the 2014 farm bill cut $8.6 billion (over the next ten years) from the food stamp program.

In 2007 about 12 of every 100 kids were on food stamps. Today it’s 20 of every 100.

For Every 2 Homeless Children in 2006, There Are Now 3

On a typical frigid night in January, 138,000 children, according to the U.S. Department of Housing, were without a place to call home.

That’s about the same number of households that have each increased their wealth by $10 million per year since the recession.

The US: Near the Bottom in Education, and Sinking

The U.S. ranks near the bottom of the developed world in the percentage of 4-year-olds in early childhood education. Early education should be a primary goal for the future, as numerous studies have shown that pre-school helps all children to achieve more and earn more through adulthood, with the most disadvantaged benefiting the most. But we’re going in the opposite direction. Head Start was recently hit with the worst cutbacks in its history.

Children’s Rights? Not in the U.S.

It’s hard to comprehend the thinking of people who cut funding for homeless and hungry children. It may be delusion about trickle-down, it may be indifference to poverty, it may be resentment toward people unable to “make it on their own”.

The indifference and resentment and disdain for society reach around the globe. Only two nations still refuse to ratify the UN Convention on the Rights of the Child: South Sudan and the United States.

Aside from the obvious immorality of allowing so many millions of children to suffer during their most formative years, this abysmal performance in child well-being will leave a lasting legacy of social ills, poor children are increasingly more likely to remain poor for the rest of their lives (especially given the declining social mobility for which the U.S. was once famous).

Why Do The Poor Buy Luxury Goods?

From Tressie McMillan Cottom at TPM

Why do poor people make stupid, illogical decisions to buy status symbols? For the same reason all but only the most wealthy buy status symbols, I suppose. We want to belong. And, not just for the psychic rewards, but belonging to one group at the right time can mean the difference between unemployment and employment, a good job as opposed to a bad job, housing or a shelter, and so on. Someone mentioned on twitter that poor people can be presentable with affordable options from Kmart. But the issue is not about being presentable. Presentable is the bare minimum of social civility. It means being clean, not smelling, wearing shirts and shoes for service and the like. Presentable as a sufficient condition for gainful, dignified work or successful social interactions is a privilege. It’s the aging white hippie who can cut the ponytail of his youthful rebellion and walk into senior management while aging black panthers can never completely outrun the effects of stigmatization against which they were courting a revolution. Presentable is relative and, like life, it ain’t fair.

In contrast, “acceptable” is about gaining access to a limited set of rewards granted upon group membership. I cannot know exactly how often my presentation of acceptable has helped me but I have enough feedback to know it is not inconsequential. One manager at the apartment complex where I worked while in college told me, repeatedly, that she knew I was “Okay” because my little Nissan was clean. That I had worn a Jones of New York suit to the interview really sealed the deal. She could call the suit by name because she asked me about the label in the interview. Another hiring manager at my first professional job looked me up and down in the waiting room, cataloging my outfit, and later told me that she had decided I was too classy to be on the call center floor. I was hired as a trainer instead. The difference meant no shift work, greater prestige, better pay and a baseline salary for all my future employment.

….

At the heart of these incredulous statements about the poor decisions poor people make is a belief that we would never be like them. We would know better. We would know to save our money, eschew status symbols, cut coupons, practice puritanical sacrifice to amass a million dollars. There is a regular news story of a lunch lady who, unbeknownst to all who knew her, died rich and leaves it all to a cat or a charity or some such. Books about the modest lives of the rich like to tell us how they drive Buicks instead of BMWs. What we forget, if we ever know, is that what we know now about status and wealth creation and sacrifice are predicated on who we are, i.e. not poor. If you change the conditions of your not-poor status, you change everything you know as a result of being a not-poor. You have no idea what you would do if you were poor until you are poor. And not intermittently poor or formerly not-poor, but born poor, expected to be poor and treated by bureaucracies, gatekeepers and well-meaning respectability authorities as inherently poor. Then, and only then, will you understand the relative value of a ridiculous status symbol to someone who intuits that they cannot afford to not have it.

The Poor Have It Easy In America

That is a sentiment that appears to be widely held by the nation’s wealthiest citizens, according to a recent Pew survey reported by the Washington Post.

The center surveyed a nationally representative group of people this past fall, and found that the majority of the country’s most financially secure citizens (54 percent at the very top, and 57 percent just below) believe the “poor have it easy because they can get government benefits without doing anything in return.” America’s least financially secure, meanwhile, vehemently disagree — nearly 70 percent say the poor have hard lives because the benefits “don’t go far enough.” Nationally, the population is almost evenly split.

Here are the results in visual form; note the large minorities of poor and middle-class people that agree with this view.

Unsurprisingly, the report also found that those who identify as conservatives — around 40 percent of the most financially secure groups — are more likely to believe the poor have it good thanks to the government, and that the poor do not work hard enough. Another Pew report confirmed that around 75 percent of conservatives in general feel this way about the poor, regardless of income.

So in essence, if you are wealthy or conservative — but especially both — you are likely to take a dim view of America’s least fortunate — and conversely, to believe that wealthy people have it harder, due to perceived higher taxes, onerous government regulations, and the usual bugbears of the right.

As columnist Christopher Ingraham points out, such a perception of America’s poor is greatly at odds with reality:

But I have a hard time understanding how you could read about the experience of families relying on food stamps to eat, or those trying tomanage chronic conditions with Medicaid, and conclude that these people somehow have it easy. For context, here is a brief and wildly incomplete list of the ways life is “easy” when you’re poor:

Of course, it is no coincidence that those who think the poor have it easy also think the poor do not work hard enough and just live off the government (and by extension, live off the hardworking taxpayer). If you think that poor people get what they deserve for their laziness and irresponsibility, no amount of data demonstrating their difficult circumstances — and by contrast how much better the wealthy are doing — will sway the wealthy’s sympathy; nor will any of the evidence showing the role that external factors — from low wages to unstable business cycles — have contributed to growing and persistent poverty.

Moreover, with many of these same wealthy Americans having a disproportionate influence on our media and politics, it is little wonder that more is not being done to address the mounting socioeconomic conditions faced by a growing proportion of Americans.

As for how so many wealthy people can retain such callous views of the nation’s poor, that can be attributed to a range of factors. Richer people are increasingly holing up in gated communities or gentrified areas where poor people are largely absent. They are more likely to interact with and know only other well off or at least middle-class people. Some evidence even suggests that wealth accumulation itself contributes to an empathy gap with those who are not rich.

Whatever the cause, it goes without saying that this arrangement is not sustainable. No society has ever endured such a wide and growing gap between rich and poor without ultimately subsiding into sociopolitical instability — including revolution. While the U.S. may not necessarily go the way of 18th century France or Bolshevik Russia, it will certainly experience the same sort of underlying tensions and political problems that tend to bode ill for long-term prosperity.

It is time we start caring about the least vulnerable in America and doing more to help them, namely by promoting a more sustainable and equitable economic system. If more companies paid their employees better (perhaps by tapping into those record-breaking profits), that alone would go a long way. Of course, viewing the poor as people that deserve dignified wages and treatment would be the natural place to start — it is a shame that even needs to be a lesson to learn.

Graph: The U.S. Leads the Way in Low-Wage Work and Pay

As has sadly been the case all too often these days, one of the latest reports from the Economic Policy Institute, an American think-tank, is grim: low-wage workers (the 10th percentile of wage earners) have seen their real pay decline by five percent over the 1979-2013 period, despite concurrent productivity gains of 64.9 percent.

Consequently, American low-wage workers fare the worst in the developed world: according to the OECD, as of 2012, they earned just 46.7 percent of what a median worker worker does, far below the OECD average of 59.9 percent; to catch up to that average, U.S. low wage workers would need a 28 percent raise in their wages.

The graph below highlights this issue rather starkly:

Note that over a quarter of America’s labor force — 25.3 percent to be exact — is low wage, which is defined as earning less than two-thirds of the median wage. On this metric, too, the United States ranks the highest among the 26 countries surveyed, and far higher than the OECD average of 16.3 percent.

Thus, the U.S. has the largest number of low-paid workers in the developed world, and they in turn are the lowest paid in the developed world. And while several countries, such as the U.K., Ireland, and Canada, come close, most of them at the very least have more developed social safety nets to offset the shortfall among low-wage workers (universal healthcare alone is a major mitigating factor, given that medical bills account for many cases of bankruptcies among the American poor).

Setting aside the considerable amount of misery that comes with low paying and often menial labor, the broader impact on the long-term prosperity of the nation cannot be understated: with one out of four workers (and their dependents) having so little income, consumer demand — the lifeblood of the economy — stagnates. Fewer people are able to afford an education or vocational training, leading to a lot of untapped and desperately needed potential.

All this despite the nation’s economic elites — its executives, shareholders, and investors — broadly doing better than ever. Is it really so untenable for companies to spare some of their record, post-recession profits to improve the plight of their beleaguered workers — i.e. the consumers and patrons they all so badly need?

 

In any case, this is a point I have made too many times before, so instead of retreading it once more, I will leave you with this illuminating report by  Elise Gould (also from EPI) on Why America’s Workers Need Faster Wage Growth—And What We Can Do About It. As always, feel free to share your thoughts and feedback.

A Quick Guide to the Guaranteed Basic Income

Although not a new idea, the concept of a guaranteed basic income — also known as a guaranteed minimum income or universal basic income — seems to be gaining a lot more traction lately. Amid concerns about rising poverty and inequality, as well as greater scrutiny on the failings and inefficiencies of current welfare programs, the allure of a more streamlined and equitable income for all seems obvious; hence why thinkers and activists across the political spectrum — from Martin Luther King, Jr. to Milton Friedman — have advocated one form of it or another.

If you would like a great breakdown on what this idea entails and how it would be implemented, check out this article on Vox.com. It does a pretty good job of introducing the subject in a balanced and holistic way, including analyzing the various arguments for and against a basic income by conservatives, liberals, and libertarians. What do you think?

 

 

Chart: Poverty in Asia

Much has been made of the rise of Asia and the subsequent arrival of an “Asian Century“, whereby the continent will become the dominant economic, cultural, and political force in the 21st century world. Setting aside the sheer diversity of this massive landmass — in terms of both culture and fortune — most Asian nations still face tremendous challenges, namely in the area of poverty reduction. Consider the following chart:

Courtesy of The Economist.

As The Economist goes on to note:

Asia’s rapid economic growth has put it on track to eradicate “extreme” poverty, defined by the World Bank as daily consumption of less than $1.25 per person, by 2030. However, the Asian Development Bank reckons this is too low given that nowadays, things like mobile phones are seen as necessities; so it has calculated a more suitable daily minimum of $1.51.

This lifts Asia’s 2010 poverty rate to nearly one-third of the population, adding 343m people to the ranks of the poor. The ADB believes food insecurity, and the risks of natural disasters, global economic shocks and the like, should also be taken into account when measuring poverty. This would further raise Asia’s 2010 poverty rate, to nearly 50 percent.

As with so many other parts of the world, Asia holds tremendous promise but faces daunting challenges. As the continent grows richer and more powerful, despite millions being left behind in squalor, it may be wracked by the same strife and instability that historically bedevils most unequal societies.

The Plight of Restaurants Workers

Throughout the recession and subsequent recovery, one of the few job opportunities that have remained largely unaffected, if not growing, has been food service. From eateries to fast-food chains, this broad industry has gained an impressive 30 percent in employment since 1990, accounting for nearly one out of ten private-sector jobs in the U.S.

Unfortunately, a recent report by the Economic Policy Institute exposes some very disquieting things about one of America’s fastest-growing employers. Here are some of the highlights courtesy of Mother Jones:

The industry’s wages have stagnated at an extremely low level. Restaurant workers’ median wage stands at $10 per hour, tips included—and hasn’t budged, in inflation-adjusted terms, since 2000. For nonrestaurant US workers, the median hourly wage is $18. That means the median restaurant worker makes 44 percent less than other workers. Benefits are also rare—just 14.4 percent of restaurant workers have employer-sponsored health insurance and 8.4 percent have pensions, vs. 48.7 percent and 41.8 percent, respectively, for other workers.

 

Unionization rates are minuscule. Presumably, it would be more difficult to keep wages throttled at such a low level if restaurant workers could bargain collectively. But just 1.8 percent of restaurant workers belong to unions, about one-seventh of the rate for nonrestaurant workers. Restaurant workers who do belong to unions are much more likely to have benefits than their nonunion peers.

 

As a result, the people who prepare and serve you food are pretty likely to live in poverty. The overall poverty rate stands at 6.3 percent. For restaurant workers, the rate is 16.7 percent. For families, researchers often look at twice the poverty threshold as proxy for what it takes to make ends meet, EPI reports. More than 40 percent of restaurant workers live below twice the poverty line—that’s double the rate of non-restaurant workers.

 

Opportunity for advancement is pretty limited. I was surprised to learn that for every single occupation with restaurants—from dishwashers to chefs to managers—the median hourly wage is much less than the national average of $18. The highest paid occupation is manager, with a median hourly wage of $15.42. The lowest is “cashiers and counter attendants” (median wage: $8.23), while the most prevalent of restaurant workers, waiters and waitresses, who make up nearly a quarter of the industry’s workforce, make a median wage of just $10.15. The one that has gained the most glory in recent years, “chefs and head cooks,” offers a median wage of just $12.34.

 

Industry occupations are highly skewed along gender and race lines. Higher-paid occupations are more likely to be held by men—chefs, cooks, and managers, for example, are 86 percent, 73 percent, and 53 percent male, respectively. Lower-paid positions tend to be dominated by women: for example, host and hostess (84.9 percent female), cashiers and counter attendants (75.1 percent), and waiters and waitresses (70.8 percent). I took up this topic in a piece on the vexed gender politics of culinary prestige last year. Meanwhile, “blacks are disproportionately likely to be cashiers/counter attendants, the lowest-paid occupation in the industry,” while “Hispanics are disproportionately likely to be dishwashers, dining room attendants, or cooks, also relatively low-paid occupations,” the report found.

 

Restaurants lean heavily on the most disempowered workers of all—undocumented immigrants. Overall, 15.7 percent of US restaurant workers are undocumented, nearly twice the rate for non-restaurant sectors. Fully a third of dishwashers, nearly 30 percent of non-chef cooks, and more than a quarter of bussers are undocumented, the report found. So a huge swath of the people who feed you pay payroll taxes and sales taxes yet don’t receive the rights of citizenship.

All of this reflects a rather disturbing overall trend in the U.S. economy: the loss of stable, well-paying jobs to less secure, low-wage ones. Not only has job growth not kept pace with the needs of the labor force, but the relatively few options that remain share largely the same characteristics: meager pay, little to no benefits, no paid sick leave, poor upward mobility, and so on. And since this has become standard across the industry — baring only a few examples — most companies have little incentive to offer anything better to their workers — in essence, it is a race to the bottom, one that desperate workers of all ages have no choice but to take up.

Needless to say, this is not a sustainable model for prosperity. Not only do individual employees suffer, but so do their families and communities (the poorest of which often have few options beyond food service and equally low-paying retail). The national economy as a whole cannot thrive when such a large chunk of its consumer base is too poor to afford goods and services, or too unhealthy and demoralized to work at optimal productivity. These highly profitable employers have as much an interest in investing more in their labor force as the workers themselves.

For its part, the EPI report suggests legislative solutions, including a  higher minimum wage, mandated paid sick leave, and a path to legal status for undocumented workers. I would add unionization or some sort of labor collective as a big step, too. For its part, MoJo recommends that those wishing to learn more about the working conditions in America’s food industry read the 2013 book Behind the Kitchen Door by Saru Jayaraman.

As fast-food, retail, and other service work continues to take the place of increasingly obsolete but better-paying positions, we need to start adjusting the way we value such labor; otherwise, unpleasant, beggaring jobs will be the new normal, and that cannot last.

 
 

The Economic Sensibility of Housing the Homeless

It goes without saying that addressing the problem of homeless on all levels is a moral imperative. The ethical merit of keeping people off the streets, and helping uplift those already there, requires no argument (at least I should hope).

But unfortunately, in our world, morality is apparently not a good enough incentive. Even with all the capital that is available — whether it is wasted on the military industrial complex, sitting in offshore banks, or poured into pork-barrel projects — policies and solutions need to be cost-effective to gain any sort of political currency and public support.

Thankfully, there is a solution to alleviating homelessness that can bring together both moralists and cynics, providing the cost-efficiency that is so imperative to policymakers while legitimately helping those in need. 

Vox.com reported on a study by the Central Florida Commission that compared several approaches to addressing homeless in that region of the state (Florida has one of the highest rates of homeleness, not to mention poverty, in the country). 

[The study indicated] that the region spends $31,000 a year per homeless person on “the salaries of law-enforcement officers to arrest and transport homeless individuals — largely for nonviolent offenses such as trespassing, public intoxication or sleeping in parks — as well as the cost of jail stays, emergency-room visits and hospitalization for medical and psychiatric issues.”

Unsurprisingly, just dealing with the problem ad hoc or in a superficial sense is both costly and ineffective. But by contrast…

[Getting] each homeless person a house and a caseworker to supervise their needs would cost about $10,000 per person.

This particular study looked at the situations in Orange, Seminole, and Osceola Counties in Florida and of course conditions vary from place to place. But as Scott Keyes points out, there are similar studies showing large financial savings in Charlotte and Southeastern Colorado from focusing on simply housing the homeless.

The general line of thinking behind these programs is one of the happier legacies of the George W Bush administration. His homelessness czar Philip Mangano was a major proponent of a “housing first” approach to homelessness. And by and large it’s worked. Between 2005 and 2012, the rate of homelessness in America declined 17 percent. Figures released this month from the National Alliance to End Homeless showed another 3.7 percent decline. That’s a remarkable amount of progress to make during a period when the overall economic situation has been generally dire.

Here is a visual picture of the state of homelessness in the U.S.

Screen_shot_2014-05-30_at_9.26.15_am

Source: National Alliance to End Homelessness / Vox.com.

Keep in mind that this statistical success has taken place during some of the toughest economic times in our country’s history (and Florida’s economy was especially hard hit). As the article notes, there is a good reason why housing the homeless is more tenable than many would think:

When it comes to the chronically homeless, you don’t need to fix everything to improve their lives. You don’t even really need new public money. What you need to do is target those resources at the core of the problem — a lack of housing — and deliver the housing, rather than spending twice as much on sporadic legal and medical interventions. And the striking thing is that despite the success of housing first initiatives, there are still lots of jurisdictions that haven’t yet switched to this approach. If Central Florida and other lagging regions get on board, we could take a big bite out of the remaining homelessness problem and free up lots of resources for other public services.

There you go: a win-win for everyone, especially (and most importantly) he hundreds of thousands of homeless people across the country whose plight needn’t be ignored for either ethical or practical reasons. 

Your thoughts?

New Report Finds Global Poverty Worse Than Previously Thought

That global poverty is a serious and pervasive problem is without doubt. But it appears the scale and scope of it — despite being already staggering — may have been underestimated all this time. That’s the conclusion of a recent report by the Oxford Poverty & Human Development Initiative (OPHI) called the Global Multidimensional Poverty Index 2014 (MPI), which is considered the most accurate measure of world poverty to date.

As The Atlantic reports, the MPI takes into account certain factors that are overlooked by the United Nations Development Programme‘s Human Poverty Index (HPI), which is the leading source for such data.  While it defines the poor as those making it less than $1.25 a day, it lacks in two key areas:

First, it counted countries as one whole mass, unable to differentiate degrees of poverty within a country and locate the worst pockets. And second, it placed all of its scrutiny on income, without considering other indicators such as health and education.

Sure, making a certain amount a day is one way to measure the physical comforts a person might be lacking: home, food, clothing. But what about limited (or a total lack of) access to medical care? Or barriers to getting an education? And just because someone has a roof over his or head doesn’t mean it’s a sanitary, safe place to live—impoverished people in cities are often concentrated in slums where open sewage, crowding, and rickety housing make for dangerous living conditions. Consequently, many didn’t consider HPI’s income index to be particularly accurate.

OPHI addressed this issue by going beyond just basic income and including what it calls “deprivations”, other needs such as nutrition and child mortality; years of schooling and school attendance; and things like sanitation, water, and electricity. If a person is deprived of a third or more of the indicators, he or she would be considered poor. Degrees of poverty were also factored in; for example, whether someone had a shack for a home versus no home at all.

The MPI’s other great advantage is its ability to pinpoint poverty down to a local, rather than national, level. So not only can one find which countries or regions are the poorest, but which particular areas within those borders are worse off — an invaluable asset for aid workers and policy makers seeking to better target their work.

So what did this multidimensional approach yield? How much worse is global poverty?

Sadly, the world is more impoverished than we previously thought. The HPI has put this figure at 1.2 billion people. But under the MPI’s measurements, it’s 1.6 billion people. More than half of the impoverished population in developing countries lives in South Asia, and another 29 percent in Sub-Saharan Africa. Seventy-one percent of MPI’s poor live in what is considered middle income countries—countries where development and modernization in the face of globalization is in full swing, but some are left behind. Niger is home to the highest concentration of multidimensionally poor, with nearly 90 percent of its population lacking in MPI’s socioeconomic indicators. Most of the poor live in rural areas.

So there are 400 million more people living in poverty than previously believed. For a point of  reference, that’s more than the entire population of the United States and then some — hardly a minor oversight. Needless to say, this is vital information, bringing to light the dire circumstances of hundreds of millions of people.

Granted, I wonder whether this will make any difference in stirring up public and political action: if an already eye-watering 1.2 billion people living in poverty isn’t enough to rouse humanitarian interest, will an extra 400 million make the difference? Will the numbness and inaction be any less prevalent? If anything, I fear the sheer scale of the problem will only lead to more cynicism and subsequent apathy.

In any case, I’d like to end this sobering revelation on a more optimistic note. As intractable as the problem seems to be, especially in light of widening global inequality, there has been progress:

Nepal is improving its situation the fastest among developing countries—and it’s in South Asia, the poorest region. In five years, Nepal reduced its MPI numbers from 65 percent of its population to 44 percent. Other classically poor countries, like Rwanda, Ghana, Bangladesh, and Cambodia are also improving, not just getting richer but also seeing some narrowing of the gap between rich and poor.

While these improvements are just a drop in the bucket compared to how many people are left suffering — including the hundreds of millions who are not technically poor but remain precariously close — every human life that is lifted up from misery is worth it. That’s why we can’t afford to ignore a single impoverished person.

If you would like to read the full report, including its methodologies and sources, click here. As always, feel free to share your own thoughts and reactions.

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New polling out from NBC and the Wall Street Journal shows a huge shift in attitudes towards poverty and the poor over the last 20 years. According to the survey, 46 percent Americans believe that poverty is caused by circumstances beyond people’s control, versus 44 percent who think it’s caused by impoverished people not doing enough to improve their station in life. The last time the survey asked that question, in 1995, a full 60 percent of Americans felt that the poor weren’t doing enough to lift themselves out of poverty, compared to just 30 percent who blamed extraneous factors. Hard times, it would seem, have made us more sympathetic to the plight of the poor. There’s nothing like a massive economic downturn to foster a little empathy.

And that makes sense. When the economy so rapidly and viciously turns on so many people, it’s hard to maintain the sense of idealism that leads one to believe that hard work and ambition are all that’s required to secure a comfortable, reasonably prosperous existenc

Simon Maloy, Salon

New polling out…