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Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you:

Tuesday, October 26, 2010

Poverty: A Social Issue as Well as an Economic One

Poverty. We might describe it as not having enough money to assure adequate shelter and "three squares a day" for your household. This is a condition generated by the economy, then, right? And with the current bad economy, poverty has increased. Well, yes. But "poverty" is more than this simplistic description, as we've found in some recent explorations of numerical evidence about who is poor and why.

Certainly, the current economic conditions have led to greater poverty. In data for 2009 published last month by the Census Bureau[1], another 3.7 million people fell into that category, bringing the total number to 43.6 million, amounting to 14.3% of the total population. The 2008 figure was 39.8 million, 13.2% of the population.

This sense of being "in poverty" is a specific designation, based on the income required to feed your family. The Census Bureau conducts an annual survey of some 100,000 people asking about income, job status and characteristics of your household, among other items. Some years ago, similar kinds of government survey work indicated that low-income families needed to spend about 30% of their income on food in order to maintain a "nutritious" diet. So price data were collected and the cost of such a diet was calculated, then multiplied by 3 to obtain the minimum income needed to cover that and other family needs. Through the years, this threshold income level has been adjusted in line with inflation. In 2009, it came to $21,954 for a family of four.

Certainly, if you did not work, your chances of being "in poverty" are fairly significant. Last year, people over age 16 who did not work constituted somewhat over a quarter of the total population and more than one-fifth of them, 22.7%, were in poverty. This share is half again as high as that for the total population. [The Census Bureau and the Labor Department count eligible workers beginning at age 16.] In contrast, among people who worked, the poverty rate was just under 7%, half of the rate for the total population.

The bigger story with poverty lies in the shape of families. People, including both adults and children, who live in a family where there are two parents also see low poverty: 7-1/4% last year, a number also about half the rate for the total population. But people in families headed by a single woman face poverty at a 32.5% rate, that is, nearly one-third of those women and children are in poverty. These people, 14.7 million of them in 2009, constitute 34% of all those in poverty even as they are just less than 15% of the population. Tough stuff. And that's whether somebody in the family works or not. For those in which no one does work, the poverty rate is a whopping – pardon the informal expression – 71.5%, making this almost a defining characteristic of poverty. If even one person works part-time, this drops to slightly above 50%. Clearly work pays, but in every household work situation – one full-time worker, two full-time workers, two part-time workers, and so on – the rates are markedly higher if the household is headed by a single woman rather than by a married couple or a single man.

When we first saw this, we thought, oh well, to fight poverty, just encourage people to make marriage commitments, to form this mutual relationship of respect and support. It's obviously crucial to the economic well-being of the entire household. That's easy for us to say. Some of you who are acquainted with policies and actions in this arena will know that social service programs to this end have indeed been tried, and they do help some. But the problem is more complicated than our simple recipe, "encourage marriage". A study described in a recent volume of The Annals of the American Academy of Political and Social Science[2] outlines the conundrum: young women who were interviewed by the writers in fact valued marriage and understood its importance. But they could not see the men in their communities as people who would yield up the kind of respect and support they thought would be necessary. They weren't about to enter into a committed relationship with those men.

We don't have an answer to this. We are aware of a number of initiatives, both private and government funded, on the local, state and national levels, which focus on young men (14-21 years of age) who have fathered children but do not live in the same household. Such programs assist young dads by encouraging them to continue their education, finding work so that they can provide some financial support and helping them to become emotionally involved in the lives of their children, from whom they may be estranged because of difficult relationships with the mothers.

We could also define "poverty" in a different way. Now many years ago, writer George Gilder spoke of it not in terms of current numerical income, but in terms of awareness of opportunity and willingness to seize such opportunities or at least strive for them. If people were genuinely poor, he suggested, it was because they could not conceptualize that there might be a way out. On the other hand, even if their incomes were low, they might not be impoverished if they could see that there are ways to improve their lives and if they then reached toward that improvement. The entire issue of The Annals we reference above takes this kind of approach in wanting to connect policymakers and scholarly elites to the culture of the people who are "in poverty." We hope they've made some headway.

[1] Carmen DeNavas-Walt, Bernadette D. Proctor and Jessica C. Smith. Income, Poverty, and Health Insurance Coverage in the United States: 2009. Washington, D.C.: U.S. Bureau of the Census, September 2010.

[2] Kathryn Edin and Marie Kefalas. Promises I Can Keep: Why Poor Women Put Motherhood Before Marriage. Berkeley: University of California Press. 2005. Discussed in Small, Harding & Lamont. "Reconsidering Culture and Poverty", The Annals of the American Academy of Political and Social Science, Volume 629, May 2010, page 12.

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