Why Poverty Persists in America
nytimes.com
nytimes.com
1. Raising health care costs
2. Very little poverty spending actually goes to the recipients' pockets
3. Decline of union membership
4. Home ownership is out of reach and the rent is too damn high
5. Banking is expensive for poor people
Most of these issues can be traced back to corporate lobbying.
The moral of the story is that poverty is a policy choice.
https://www.statista.com/statistics/233910/poverty-rates-in-....
In case this sounds snarky, let me be clear: this is a really important thing to consider (IMO): there are societies without poverty. It's just that most of us (reading this here today) are unfamiliar with them because they were and are actively destroyed by the poverty-having societies. (E.g. the destruction of the free pirates by the imperial navies. Destruction of Amazonians by loggers. I can list examples all day.)
By having a poverty-based system, you can force people to go into the armed forces and then use them to attack and destroy other societies to take their resources and expand your system. Without the "stick" of destitution no one will participate voluntarily in these unpleasant and unnatural systems. (E.g. people preferred Native American lifestyles to European American lifestyles. I've got a great quote from Ben Franklin on lock on that point, BTW...) The way it's usually framed is, "But who will pick up the garbage?"
The most effective solution to poverty is to continue to raise the lower bound as much as you can which alleviates suffering and to remove barriers to forward progress for the individual as that increases everyone's chance to improve themselves and their society a little more.
Sure, a tiny pie divided equally is inferior to a large pie divided unequally but so that everybody gets a much larger piece.
But that's not absolute. Inequality has significant moral and psychological effects, so yes it is worth shrinking the pie slightly if that's what is required to divide it up more equally.
It's a balance - strive for both progress and fairness, not for one at the expense of the other.
Exploitation. Our economic system is based on exploiting other people. We "had" the worst kind, slavery along with colonialism. Then we slowly moved to a combination of "unlivable" Wages and Undocumented Workers.
This allows the well off to live the good life. With the issues we are having now, we may need to move to a different system, but witch one ? Unfortunately the only way that has happened in the past is civilization ending wars (or something close to that).
The primary reason for our stalled progress on poverty reduction has to do with the fact that we have not confronted the unrelenting exploitation of the poor in the labor, housing and financial markets.
I'd be wary of these 'mega-unions' my SO has one here in Spain as she is a nurse and it hasn't been very good in practice.
They often side with the employer (in this case the Government) and then there is little recourse for the employees to find better conditions or pay as the agreements are for the whole sector.
That's not to say all unions are bad - it depends on the union, but having a few super unions seems to increase the probability you end up with bad ones.
Large unions do exist in the US, but again, they do not organise as their Spanish counterparts, as they only exist attached to a trade or industry. Thus, workers who want to organise, cannot just go and say “we are now represented by this or that union”, and if there is not an union to their trade, they would need to self organise into a small union, which obviously does not have the same bargaining power as a larger one, see the Starbucks employees unionising across the US.
I wonder if any countries regulate these kinds of unions as the monopolies that they are?
A "monopoly" refers to supply side, when one supplier is (or practically is) the entire market supply.
But on the demand side, the term is "monopsony."
For example, the US Department of Defense is (probably) a monopsony for fighter pilots. The classic example is the company-owned coal town.
Another term to remember is "regulatory capture." This usually refers to a government's regulators having their incentives captured by those they are intended to regulate. However, the incentive structures are more or less equivalent if an union is captured by a monopsony employer.
If there is only one demander (employer) for the labor, it would be a monopsony. Like a coal company in a company town.
This seems like such an obvious factor to leave out of an article like this. I have trouble believing it's not one of, if not the most important changes the US has gone through.
Or, you know, if we had any number of institutions in this country which are more common in the rest of the developed world, such as paid childcare and maternity leave, affordable healthcare and rent, real protections against discriminating on the basis of age&gender, etc.
[1]https://post.ca.gov/portals/0/post_docs/publications/Buildin...
[2]https://ifstudies.org/blog/less-poverty-less-prison-more-col...
[3]https://www.theguardian.com/business/2022/jul/04/half-of-all...
[0] https://www.bankrate.com/banking/savings/emergency-savings-r... [1] https://www.amjmed.com/article/S0002-93430900525-7/fulltext
Simply put, the impoverished just don't have access to resources that others do, including the ability to take off from work and travel somewhere to get an abortion, if needed.
Add to that the poverty to prison pipeline and it's clear that it's really a systemic issue.
Interestingly there has been a lot of research on the "Success Sequence"[1]. This is 3 steps for people living in developed countries to break out of this cycle:
1. Finish high school.
2. Get a full-time job once you finish school.
3. Get married before you have children.
To quote the studies, "97% of people who follow these steps do not live in poverty. In contrast, 76% of those that did not adhere to any of these norms were below the poverty line."
[1] https://www.acf.hhs.gov/opre/report/success-sequence-synthes...
If poverty were a leading cause, then there must be some other truly enormous even-more-leading cause that's counteracting the reduction in poverty since then.
The number of single parent households has dropped and the number of single teen mothers has dropped dramatically in the past couple of decades and it is visible in the child poverty statistics.
I would think that increased competition would improve conditions for customers?
https://www.aarp.org/money/investing/info-2022/restarting-po...
literally a no-op...junk mail is printed, USPS delivers it against my will, I put it in my recycle bin...another truck comes and empties that bin
this is well-functioning?
But as far as central non-digital services centers go, the USPS is top notch. It can be improved, sure, and it suffers from the same issues many government services handicapped by the misplaced, accumulated "starve the beast" policy cruft. Despite this, it remains a fantastic resource.
I really wish certain political ideologies would recognize when they are shooting themselves and their fellow citizens in the collective foot.
In literally any other context you would be cheering this on.
Congress has done a lot of terrible things but the burden they have placed upon USPS isn't one of them.
There's a cool Veritasium video on it: https://www.youtube.com/watch?v=esQyYGezS7c
Or TLDR: People who don’t store much money in their bank account aren’t customers the bank wants if we ignore fees.
Unions can organize all they want. Politicians can raise the minimum wage all they want. Those things don't fix the main problem that the making-things-here jobs that support wage increases across the board are absent.
I think there's an implicit assumption that as options increase, variability in those choice options offered increases as well, which isn't always the case.
To the extent that the competitors all are constrained by some common variable (a business model oriented around loaned money, for example), they will not vary along some variables, which might result in the absence of some critical choice option.
I guess I'm feeling nitpicky about this but sometimes I think the US really needs some collective reflection on the meaning of competition, who is supplying it (private, public, government, etc.), how it is attained (choice expression through monetary-based purchases or non-monetary mechanisms such as votes) and so forth.
Often I think you can think of government services or regulation as another competitive mechanism; it's just attained indirectly through votes, and might encourage competition in different ways (e.g., either by acting as a competitor directly, as in the case of the USPS, or by changing the constraint landscape as in the case of regulation).
It did improve conditions for customers! As an example I currently bank with Ally, free checking account, no ATM fees (on any ATM, in/out network doesn't matter) and pretty sure they have good overdraft protection though I've never checked. Compare that to a place like BoA that has ATM fees, minimum account balances and fees, and while they probably have better overdraft protection than in 2008, it's probably not as good as what Ally offers.
The reason Ally can compete like this is simple, BoA and most other traditional banks have a ton of physical locations they have to pay to keep the lights on in, Ally on the other hand is entirely online. And while it may be nice to have a physical location for "peace of mind", in practice I found that it's usually better when the company (like Ally) puts the money into customer service so the phone gets answered when you call.
Honestly the biggest problem with Ally is that they are still a bit of a "savvy bank", that is if you ask any old joe on the street if they have heard of Ally, they would probably say no. Same goes for the litany of other new banks that have roughly the same business model as Ally. They would all be a great deal for those that are low-income but they aren't in your face like BoA or WF with their physical locations so people usually end up going to the "traditional banks" which are IMO not designed for them.
Being savvy is one of the ways that people can lift themselves out of poverty. Unfortunately, there is no way to force people to be savvy, and there is also no way to make regular banks be like savvy banks.
But this is an unstable equilibrium.
If competitors focus on attracting more profitable customers then I'd imagine that this subsidy becomes unsustainable as unprofitable customers migrate to banks with lower fees and minimums and profitable customers migrate to banks with higher rates. (Which those banks can afford to pay because they are no longer subsidizing as many unprofitable customers.)
Since that time, interest rates have steadily dropped and that business model no longer works very well
We need more housing; no one can deny that. But rents have jumped even in cities with plenty of apartments to go around. At the end of 2021, almost 19 percent of rental units in Birmingham, Ala., sat vacant, as did 12 percent of those in Syracuse, N.Y. Yet rent in those areas increased by roughly 14 percent and 8 percent, respectively, over the previous two years. National data also show that rental revenues have far outpaced property owners’ expenses in recent years, especially for multifamily properties in poor neighborhoods. Rising rents are not simply a reflection of rising operating costs. There’s another dynamic at work, one that has to do with the fact that poor people — and particularly poor Black families — don’t have much choice when it comes to where they can live. Because of that, landlords can overcharge them, and they do.
A study I published with Nathan Wilmers found that after accounting for all costs, landlords operating in poor neighborhoods typically take in profits that are double those of landlords operating in affluent communities. ...
It's not that the government doesn't have the money or that we're not paying enough in taxes. It's that we're spending it on the wrong things (if we want to have a generally prosperous and stable society).
Articles like this never address some fundamental questions that would be much more enlightening:
* Why does poverty persist in any country? Is there any country where there are no poor?
* It states that the percentage of the poor in the US stayed relatively constant over time. But is it the same people (and their descendants) who are staying poor, or are the poor of one generation (or their descendants) able to lift themselves out of poverty into a stable middle-class life?
Instead it chooses to frame most economic choices made by the poor as being "exploitative", and at the same breath blames payday loan companies for being predatory and yet posits that the poor need greater access to credit.
Biden recently talked about limiting "junk fees" for example - we need more focus on stuff like that, and incidentally, these policies probably help all Americans.
Look at San Francisco. Their homelessness budget is over $600 million a year, and yet, homelessness is the WORST its ever been. That's because homelessness "activists" keep the homeless as farm animals, living in homelessness without actually trying to help them elevate themselves. Look at the open drug markets and free access to drugs and needles they have. This is all to keep them enslaved in drugs and homeless without trying to help them.
Because if they solve the problem of homelessness, they won't have jobs anymore. They are like the pharmaceutical industry except at the grassroots level.
You're upset about the SF homelessness budget and homelessness activists, but what is your solution? break up homeless camps and throw all their earthly possessions into a dumpster, then tell them to "elevate themselves" at the shelter where they're more likely to be assaulted and stolen from?
Or maybe send as many to prison as you can to "teach them a lesson"?
Can you point to a study where safe injection sites make drug problems worse?
Can you point to anything where its physically possible to "pull oneself up by their bootstraps"?
Look, I get it, you don't like looking at them, they make you feel bad, you don't want to see them as human. But you can't just solve poverty by telling the diseffected masses to become an entrepreneur.
It's ipso facto sensible that giving people addicted to drugs an upside to continue their addiction (i.e. a safe place to consume said drugs) and no downside (i.e. no threat of jail time) will make them in fact continue to be addicted and unable to become productive members of society. If you're asking for studies, it's incumbent upon you to prove why it would be otherwise.
in some cases that may be true; but UBI trials have also shown that they make a huge difference in people lives. It's not just the jobless/homeless, it's the working poor.
No, it won't, assuming you're talking about existing programs. The current programs aren't designed to fix the problems the recipients face. They're merely designed to keep people alive (food, medical care, etc). They have absolutely nothing to do with getting those people jobs with pay high enough to exit the support system. Many of the people on those relief programs work, but simply don't make enough. So in that regard your last sentence allpies to your own statement: "It's that we're spending it on the wrong things".
As others have pointed out, the Child Tax Credit was a huge boon to low income families, but sadly discontinued since "cash handouts is socialism and in America, we believe in capitalism, darn it!" That's the type of program that could make a difference.
I could be wrong, but one of the biggest deceptions of the program seemed to be how many people were "lifted out of poverty" simply because monthly payments were included as monthly income whereas the lump payment before would not be, thus lifting peoples monthly income above the poverty level even though it was largely the same amount overall.
The program may have been beneficial, but expanding it would mean lining the pockets of the middle class and rich more than the poor without drastic changes. And we have no data to show it truly reducing poverty.
We can and we should do better. But we will never eliminate poverty so long as we want freedom of economic trade. (And use a definition that is relative).
Using the BLS CPI calculator:
https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1015&year1=198...
$1,015 in 1980 is equivalent to $3,091 in 2016 dollars. So, it’s only a small relative increase, and as the article points out, it was mainly for Medicaid:
> Most of this increase was due to health care spending, and Medicaid in particular. But even if we exclude Medicaid from the calculation, we find that federal investments in means-tested programs increased by 130 percent from 1980 to 2018, from $630 to $1,448 per person.
$630 in 1980 has the same buying power as $2,007 in 2018. So it’s actually a reduction in spending outside of healthcare.
> Lousy, underpaid work is not an indispensable, if regrettable, byproduct of capitalism
Actually, it is. Market competition in the search for a steady profit pressures capitalists to reduce wages as much as possible, and eliminate any human aspects from work that are not strictly necessary for production. So, definitionally lousy, poorly paid work[^0].
Workers can fight back against this pressure, but it’s a Sisyphean task. As this article explains, it’s difficult and any gains will be eroded over time and a new generation of workers will have to fight again.
The real solution is to construct systems (technologies and institutions) that can perform the functions of capital (coordination of production and distribution, giving people something to do with their day), and then eliminate capital as a social process. Generating poverty (not to mention war, ecological destruction, etc.) is just an intrinsic consequence of the dynamics of capital and will be with us until we do away with it.
[^0]: I didn’t say underpaid because on average all jobs in capitalism are underpaid: profit comes from paying people less than they produce…
Our military budget will soon pass $1 trillion annually
Our elected representatives now routinely provide the Pentagon with more money than it even requests
Every NYTimes article on Ukraine is riddled with comments suggesting we provide a blank check for weaponry
The Washington Post likes to tell me every day why it is essential the US build more $15 billion aircraft carriers to provoke China
This is just one reason why we have poverty and always will
Money is always the culprit.
Abstract: this article, we present a new theory that, given the economic consequences of military spending, some governments may use military spending as a means of advancing their domestic non-military objectives. Based on evidence that governments can use military spending as welfare policy in disguise, we argue that the role of ideology in shaping military spending is more complicated than simple left-right politics. We also present a theory that strategic elites take advantage of opportunities presented by international events, leading us to expect govermments that favor more hawkish foreign policy policies to use low-level international conflicts as opportunities for increasing military spending. Using pooled time-series data from 19 advanced democracies in the post-World War I period, we find that government ideology, measured as welfore and
The US government already spends more on healthcare and social security than on the military.
Most of that military spending is salaries for US workers. Guess where that $15 billion carrier is getting built? In the US from US parts. Its a jobs programs that conservative senators can support.
Money can be borrowed with interest from social security, and while paying down that interest is closer to a voluntary expense, it is still a much more serious decision than simply deciding not to do so.
57% of people pay no income tax.[1] The carriers and planes are essentially only being paid for by the top 40% of earners.
[1]: https://www.cnbc.com/2022/03/25/57percent-of-us-households-p...
It seems to be the usual things, education, understanding and knowledge of opportunities, risky behavior, and blind trust in the system waiting for it to live a person up rather than them having to lift themselves up.
There is a persuasive lecture given by Darren McGarvey that makes this point more eloquently: https://www.bbc.co.uk/sounds/play/m001g2zf
This is because a system sets the very problem domain for a person to "fail". By virtue of being a system, it is trivial to point to it and say "where" and "how" the person is failing inside it.
People are not so easy to describe. A person is not a simple system. Their needs are not so easy to point at and say "where" and "how" a given system has failed them. Each person is unique, and there are hundreds of millions of us all interacting with one system.
But that complexity is in everything you are asking of people here: What's does it mean to "lift yourself up"? What are the circumstances for "risky behavior", and are there really better options? Is the behavior a problem or result? These questions are all fraught with complexity, because people have complicated needs and complicated circumstances.
What we really need is to set a new problem domain: the needs of each person. But suddenly this becomes some vain moral debate: isn't it selfish?
It is. So is a system.
But what if a person's needs are to be taken care of without having to work hard themselves? Isn't that unfair?
It is. So is a system.
Our system demands we ignore such edge cases, and wave them off as moral failings: the person's fault: but what gives our system the right to say so? After all, this is just a system: it isn't God! We made the damn thing! It doesn't get to tell us what is right and what is wrong. Yet we let it do just that with every person every day.
The worst parts of the US need a well-trained, well-monitored police state that will bring safety to those neighborhoods and so that the kids can get educated properly and level up into the middle class and higher. I'm all for freedom, but we can only achieve freedom once we have moved up in Maslow's hierarchy, and people in those neighborhoods don't have the foundation to thrive.
Second, we need to focus on education. Education, especially when run by people like those in charge of California's education system, is ruinous. Lowering standards only helps those white liberal educators feel better about themselves by seeing graduation percentages go up. But it leaves the children unable to compete and unprepared for the real world. It's like the story of Blind Side, where Michael Oher kept getting graduated to the next grade but he couldn't read. That's what is going on in California, when they start saying that mathematics propagates white supremacy, as if mathematics didn't originate outside of America. I believe the poorest areas of the US should get double or triple the number of teachers, so that class sizes are small and kids get the learning they need.
Safety and education. I believe those are what bring people out of poverty. My parents grew up in a war-torn country, and they grew up poor. My grandfather had a gambling addiction and never had enough money to pay tuition for my dad. Both my parents studied their asses off and immigrated to North America, and we became middle class. My siblings and I are all 1%ers or higher, and that's because we could thrive because of the education we received. We need to give kids in the worst areas a chance, but no one cares so places like Chicago, St. Louis, Baltimore, Missouri, etc are all left to fend for themselves in squalor and they will NEVER get out of it by themselves without safety and education.
Also, if I am correct, I think teachers and underpaid and schools are working at max capacity. This also creates a big inequality with people that can afford the best schools.
And better if we do not talk about the crime that is healthcare in the US...
Being poor and downtrodden forces one to turn to street violence? Nonsense. Poor kids raised in cultures that value education and self-improvement are able to turn their lives around. Poor kids in cultures that value other things aren't, which obviously isn't the fault of the kids, but there is only so much the state can do to step between the parent and the child.
Even among groups that would be categorized together in the US, such as African-Americans, you can see a clear divided in outcomes between cultures; Nigerian-Americans, for example, have a higher average income than the US average, and nearly twice that of Somali-Americans. Average incomes for black people who immigrated to the US is considerably higher than those native-born.
Or take Indian-Americans vs. Bangladeshi-Americans, whose original countries are next to each other and have comparable GDP per capita; yet the former group has an average income more than twice the latter. And you can imagine that whatever prejudices an Indian-American faces, a Bangladeshi-American faces equally.
There's no evidence historically to suggest that cultural groups that value human capital differently should end up at similar levels of wealth over time.
Why do you think 'inner-city' gang culture develops?
>Even among groups that would be categorized together in the US, such as African-Americans, you can see a clear divided in outcomes between cultures; Nigerian-Americans, for example, have a higher average income than the US average, and nearly twice that of Somali-Americans.
What are the differences in immigration reason for these groups? I'm not familiar with Nigerian immigration, but Somalian immigration is driven by leaving strife and come as refugees. Is that the case for Nigerians?
You can't judge how successful a culture is just because of their income, you have to know where they started and what resources they have access to.
> Average incomes for black people who immigrated to the US is considerably higher than those native-born.
It makes sense to me that people who can afford and have the qualifications needed to emigrate to the US will have better job prospects than people living in generational poverty and enduring systemic racism.
Applying that term to 21st Century Western governments is ideological nonsense. Were there systemic racism, it would equally impact immigrant populations, but it doesn't. Some groups that come from differing cultures have differing rates of success though they share the same racial characteristics.
This is also true for native groups in the U.S. The idea of systemic racism also fails to account for the poor who belong to the supposedly favored racial groups.
Systemic racism doesn't mean all white people will be rich or all Black people will be poor.
Systemic racism frequently intersects with poverty, educational attainment, networks, and other factors.
The type of person who has the resources to emigrate legally to the United States at this point in time is generally going to have higher educational attainment and the income that comes with it than native born people.
Crime in Chicago isn't talked about? That's not been my experience. It's literally infamous for it.
>The worst parts of the US need a well-trained, well-monitored police state that will bring safety to those neighborhoods and so that the kids can get educated properly and level up into the middle class and higher.
The police are generally not all that different than the other street gangs, especially in cities. The LA County Sheriff has an actual literal street gang operating in it.
There is no such thing as a 'well-monitored' police state.
Safety and education can only be achieved through economic security, not incarceration and abuse by the state.
If you ask your coworker today, how many shootings were there in Chicago last weekend, unless you live in or near Chicago, they will be shocked that there were 17 shootings and 4 homicides just over the weekend. Murders are "down" in 2023 with only 83 murders since Jan 1, 2023. We are only 10 weeks into the year.
> There is no such thing as a 'well-monitored' police state.
I think if enough money is poured into it, with enough eyeballs on it, and a high level of training, it can be very effective.
> Safety and education can only be achieved through economic security, not incarceration and abuse by the state.
You can't achieve economic security without safety. Can you name a single wealthy location with as high a crime rate as South side Chicago or Baltimore? The infant death rate in Baltimore is higher than 3rd world countries. We have fucking ABANDONED Baltimore and it's disgusting.
I don't want a police state, but in those areas, that's the only solution.
Would they? Literally everyone who reads the news knows Chicago has a lot of shootings. This sounds like something you made up to drive a narrative rather than basing it in truth.
> think if enough money is poured into it, with enough eyeballs on it, and a high level of training, it can be very effective.
There is no way it would be effective. Brutal? Yes. Inhumane? Sure. Suffering? Absolutely. The type of person who is attracted to being an authoritarian is not the type of person you want to have power. We already live in a quasi-police state, much more than other countries, and we still have a ton of crime and violence.
>You can't achieve economic security without safety.
You have that backwards. You can't achieve safety without economic security.
>. Can you name a single wealthy location with as high a crime rate as South side Chicago or Baltimore?
Nope, because wealthy places don't have a ton of crime. I'm not sure how that supports your argument, because it's literally what I'm saying.
Can you point to a very poor place that is safe due to the police?
>We have fucking ABANDONED Baltimore and it's disgusting.
Baltimore has more police per capita than other city besides DC https://baltimorefishbowl.com/stories/baltimore-police-per-c...
Baltimore is literally the closest city we have to a police state, you apparently don't like the outcome.
Edit* @yucky - HN doesn't want me to post and I don't want to come back and remember to post in a hour or whenever I'm allowed to again so here ya are
Police are powerful in all communities in the US. Rural people generally have less interaction with the police than urban areas. If you want to kill someone or rob someone in a rural setting, police are almost a non-factor as they wont be nearby.
> Can you point to a very poor place that is safe due to the police?
And for what it’s worth Phillips County was averaging 8 gun deaths a year across that time period for a place that has less than 20k people. That’s a shocking stat even with “small” numbers.
You're trying to take a small sample size as if it means something. And yet where would you rather be caught at with no phone and no car, some small town or the east side of Detroit?
I do find it interesting that you used a predominantly black rural area hoping it would prove a different point though.
How does that relate statistically to urban vs rural crime rates? You didn’t make an argument about Detroit. You made one about rural vs city generally.
> where would you rather be caught
When I was 13 years old I witnessed 2 teenagers being assaulted by a crowd of adults with firearms in a rural location while working on a farm for the summer. I’ve never experienced anything scarier since. I don’t extrapolate that experience out to all rural locations though so I’m not sure. I think urban just for the transportation options.
> you used a predominantly black rural area
I didn’t. Tptacek did. I just looked up their stats to see if it was an obvious anomaly. It wasn’t.
You also didn’t make a point about race. Your point was about rural vs urban. Perhaps you’d like to make a further point?