American Poverty

1. American Poverty • The American Poor • The Social Welfare Response • The New Welfare Approach

2. The Documentary I. In one sense, the cases are not typical of the poor. Those individuals and families featured are likely to be long-term poor. As you will see, most Americans who fall into poverty are not poor for long periods. II. The film does not stereotype the poor (i.e., it does not give the impression that only minorities are poor), but it does not include all the major groups of American poor. It leaves out, for example, the elderly poor, two-parent working poor families, and the angry, frightened, emotionally disturbed poor who may reject help. III. Men you notice are missing from most of the families. Men often contribute little or nothing to their children and the mothers of their children. This is quite typical in poor families.

3. IV. The film shows that even the poor with “good attitudes” make terrible mistakes: they smoke, quit jobs before they have another one, take too long to address problems, have children without thinking about the consequences. V. Elba, the teenager, is a good example of the teen mother. She does not think about consequences, and has no concern about living off welfare. Her mother is a poor parent and poor role model. Elba is a third generation welfare recipient. She needs better parenting and better role models. VI. You may have noticed that our poor are often very well dressed and, therefore, may not look poor. VII. It is often said that life for the American poor is not that difficult. However, the poor in the film are sometimes homeless, short on food, often do not have utilities, have serious transportation and child care problems, and live with a great deal of stress. This is typical.

4. VIII. In every family with children in the film, the children would be better off in high quality day care or a good school. They need healthy environments and good role models. IX. Some of the children might be better off if they were removed from their household—perhaps the child of the “depressed lady”, perhaps those of the lady with the drug problems. X. The poor in the film are typical in the sense that they are very badly educated, and very low on skills. Some have so little education and are so naïve that they would be very difficult to train or educate. Some, sadly, do not seem to be very bright. XI. Some of the poor in the film may need medical care. They are depressed, addicted, dispirited. XII. As the film shows, private charities play a very important role in helping the poor. XIII. Ironically, children in the families interviewed often seem happy, well adjusted and even smarter than their parents.

5. XIV. It may not be possible to help all the poor. Some may have been spoiled by welfare and may be unable or unwilling to ever help themselves. We may not know how to help some of the poor. Under the new law, we may have a “lost” generation of American poor. The major question is will they take their children down with them?

6. America invests a great deal of effort in identifying and trying to help the poor. I. There are numerous and sometimes rather conflicting reasons why America tries to identify and help the poor. a. High costs of social programs b. Lack of productivity or contributions of idle poor c. Social problems associated with poverty d. Impact on children who grown up in poverty e. Compassion - yet conservative about response II. How Serious is American Poverty? a. As the film made clear, the American poor have many very serious problems, but they are not like the poor in third-world nations b. Most are not homeless, and most are not in danger of starvation.

7. c. They do suffer food shortages. One in six poor households report food shortages: one-in seven actual hunger d. Poor children often have inconsistent food supplies. Those who live in poverty for long periods are 2.7 times as likely to suffer from stunted growth e. Home Ownership. About 40% of the poor own their own home. Most home ownership is among the elderly. Homes are often in bad repair f. Seventy percent of poor households own a car g. About 97% of poor households own a television

8. About half of all poor households report: a. Loss of utilities at least once in the past year. b. Food shortages over the last four months. c. Poor quality housing, including plumbing, electricity and rodent problems. d. Crowded housing. e. Lack of access to a telephone, refrigerator or stove. f. Eviction in past year.

9. Most children who grown up in poverty are not permanently handicapped by the experience, but children who grow up in poverty are: a. Twice as likely to drop out of school. b. Four times as likely to be teen parents. c. Suffer greatly increased chances of drug and alcohol abuse. d. Much more likely to score low on educational evaluations. e. Much more likely to end up in prison. Boys raised in poor families (especially without fathers) are much more likely to become criminals. f. Suicide is much higher among poor children. (Studies show that as the income of parents improves, all the above factors improve) .

10. When Children Are Placed at Risk, There are Often Negative Consequences • This is Especially True as the Number of Risks Increase

12. Percent of Children with Four or More Risks

14. How does our society identify those people who are poor? III. There are a number of ways to measure poverty (none are perfect) a. Countries use either absolute or relative measures. b. Relative: Example—one-half of median income for various types of Households. c. Absolute: Fixed dollars amounts. World Bank $370 a year. d. America uses a fixed dollar approach

15. Poverty Thresholds: 2002 • Size of Family Threshold Children • One (under 65) 9,359 • One (65 and over) 8,628 • Two Persons 12,110 One 12,400 • Three Persons 14,348 One 14,480 • Four Persons 18,392 One 18,859 • Five Persons 21,744 One 22,377

16. Poverty Threshold: Family of Four 2002: $18,392 a. Food Budget (one-third): $6,131 $ 117.89 per week $ 16.84 per day $ 5.61 per meal $ 1.40 per person per meal b. Shelter Budget (one-third): $6,131 $ 510.88 per month c. Essential Budget (one-third): $6,131 $ 510.88 per month $ 127.72 per person • Results: Poverty Rates over time

18. Problems with Measure a. Lack of Regional Cost Adjustments b. Failure to Include Taxes and the value of In-Kind Benefits c. Employed versus Unemployed Families d. Variations in Health Care Costs e. The Food Budget f. The Missing poor

19. Earnings and Income Distribution

23. Income Inequality in U.S. vs. Other Countries

24. IV. Overview of the American Poverty Population • In 2003, 35.9 million Americans lived in poverty. About 12.5% of the population (Census, 2004) • State and Federal governments spent about $500 billion on the Poor. • Between 1968 and 2002 expenditures for welfare programs increased by 523 percent. • The American population grew by 43 percent. • Increases in welfare use and costs were the result of an explosion in single-parent households, income declines for families headed by high school graduates, cost of health care.

25. Who Are the Poor? • Poor are the most vulnerable—single parent families, children, handicapped, aged, minorities and the poorly educated. • Poverty, as you will see, is not one problem; it is complex set of problems.

26. A Few Facts: • About 18 percent of all children live in poverty. • Children represent about 36% of the poor: some 12 million children are counted among the poor. • Only 21.5 percent of all the poor receive any type of cash assistance. • Despite the huge increases in expenditures, over 90% of all families receiving cash assistance live in poverty.

27. Poverty Rate for Individuals in Selected Demographic Groups, 2003

29. Poverty Rate of American Children: 1959-2003

30. Poverty Rate of Children, by Race and Ethnicity: 1974-2003

31. Poverty Rate of Children by Family Type and Race: 2002

32. Percentage of all Poor Children in Mother-Only Families, 2002

34. Percentage of All Children Living in Families with a Never-Married Female Head, by Race: 1960-2002

35. Poverty Rate by Race and Ethnicity: 1960- 2003 * Non-Hispanic ** Not Available ***Alone. No other race. ****Hispanics may be of any race.

37. Poverty Rates of People in Families by Family Type and Presence of Workers: 2002

40. Welfare and Poverty Dynamics

41. A. The Dynamics of Poverty 1. Most poverty spells last less than two years 2. In fact, most people who fall into poverty, escape it within eight months. Many fall back into poverty. 3. About 20 percent are poor for a long time B. Welfare Dynamics 1. Only about a third of the poor receive cash benefits. 2. Most welfare spells are short. 3. All spells average about four years. 4. About 20% are long-term poor 5. On any given day, most welfare recipients have been on the rolls for a long time.

43. How could this be true. Example: 1. A hospital room with four beds. 2. Three of the beds are occupied by patients who stay the whole year. 3. The other bed is used by patients who stay one week. 4. At the end of the year, 55 patients have used the room. 5. 94% of the patients (52) were short-term users. 6. Yet on any given day, 75% were long-term users. This is the way welfare works. Most people are short-term users, but a minority stay a long time.

44. Why Are People Poor In Rich America?

45. A Few Theories: A. Behavioral Theories: Popular With Conservatives 1. Myron Magnet’s behavior theory 2. How big is the underclass? 3. Charles Murray - Cold Turkey 4. Lawrence Mead - poorly designed welfare programs 5. Katz - the role of welfare in sustaining poverty 6. James Payne - expectant giving. B. Structural/Economic Theories: Popular with Moderates and Liberals 1. William J. Wilson • Migration of black Americans to inner cities. • Changes in the employment market of inner cities (skills mismatch/spatial mismatch • Impact of idleness on inner-city men, women and welfare use • Impact of civil rights laws (selective out-migration) • The Contagion Effect • The evidence on this theory

46. 2. Cornel West • The decline of inner-city jobs • A history of racism and impact on black Americans (xenophobia, sexism, homophobia) • Racial reasoning • A culture that stresses materialism • A lack of quality black leadership • Solution: Moral reasoning which would produce coalition strategies and black cultural democracy.

47. 3. James Tobin a. There is a relationship between the health of the economy and the poverty rate. b. However, a healthy economy does not work as well today because: • Many people lack the skills required by our increasingly sophisticated economy • Many good jobs are outside the central cities • Fringes hold down wages • Changes in welfare population • Feds are allowing the economy to grow too slowly c. Tobin believes the economy can grow faster without setting off inflation because: • Globalization • Deregulation

48. f. What do the theories tell us about poverty and welfare reform? • Poverty is not a single problem • The economy is important • Many poor adults will need additional education and training to be economically viable • Some people will need more than one chance • Discrimination based on race, sex or ethnicity contributes to poverty

49. Policy-Making Stages

50. A New Approach to Welfare • The Personal Responsibility and Work Opportunity Reconciliation Act of 1996