Thursday, September 03, 2015

America's extreme poverty

The World Bank and other global institutions use a very specific measure to record global poverty rates. They gather data designed to record the number of people in a country who live on less than $2 a day, and then use the information to make a “poverty headcount ratio”— the percentage of people in a country who live under this standard. In most recent data, Sierra Leone, for example, had a staggering 82.5% of its citizens living in poverty by this count. A new book, $2.00 a Day: Living on Almost Nothing in America, explores the status of Americans who face this extreme level of poverty

According to the research by co-authors Kathryn J. Edin, and H. Luke Shaefer, the number of Americans living on $2 a day or less has “more than doubled since 1996, placing 1.5 million households and 3 million children in this desperate economic situation.” 

1996 is an important marker, because that's the year the Clinton administration, working alongside Republicans in Congress, eliminated the Aid for Families with Dependent Children program, which provided a guaranteed safety net for the poor. In its place they created Temporary Aid for Needy Families (TANF), a much more meager and temporary safety net. TANF isn't working.  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 money has gone to the very rich. That's is to say, all of the productivity gains have gone to the rich, as have most of the other gains of society. The end result is that society is more unequal, more stressful, and people are doing worse off compared to before. Nothing is going to change unless we get a more egalitarian society – socialism.

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