What It’s Like To Live On $2 A Day In The
United States
By Chico Harlan
September 13, 2015 "Information
Clearing House" - "Washington
Post" -
In the United States, we often talk about
poverty as a line: You are above it or below it; you escape it or
can’t get out of it. Every year, the government defines that line
with a number. Right now, if you’re in a family of four, you’re
considered poor if you get by on less than $16.60 per day.
What we tend to ignore, though — and almost never
bother to quantify — is the vast spectrum of poverty itself. And
that’s why a new
book, “$2 a Day: Living on Almost Nothing in America,” by
Kathryn J. Edin and H. Luke Shaefer, is so eye-opening. It exposes
in devastating detail the lives of millions of Americans who aren’t
just in poverty, but extreme poverty, the kind you’d normally
associate with the developing world. Edin and Shaefer crunched
census data and other numbers and calculated that 1.5 million
American households are surviving on no more than $2 per day, per
person. They also found that the number of households in such
straits had doubled in the previous decade and a half.
It’s worth pondering for a moment just how
difficult it is to survive on $2 per day. That’s a single gallon of
gasoline. Or half a gallon of milk. If you took a D.C. bus this
morning, you have 25 cents left for dinner. Among this group in
extreme poverty, some get a boost from housing subsidies. Many
collect food stamps — an essential part of survival. But so complete
is their destitution, they have little means to climb out. (The book
described one woman who scored a job interview, couldn’t afford
transportation, walked 20 blocks to get there, and showed up looking
haggard and drenched in sweat. She didn’t get hired.)
Edin is a professor specializing in poverty at
Johns Hopkins University. Shaefer is an associate professor of
social work and public policy at the University of Michigan. In
several years of research that led to this book, they set up field
offices both urban and rural — in Chicago, in Cleveland, in Johnson
City, Tenn., in the Mississippi Delta — and tried to document this
jarring form of American poverty.
Here is what they found about the lives of the
extreme poor:
1. Most are not receiving welfare
assistance.
That is, essentially, the short explanation for
why so many people are living virtually without cash in one of the
world’s most capitalist countries.
The United States, if you recall, reformed its
welfare program in 1996, under Bill Clinton. The old system had some
major problems, and cash handouts to the poor created a perverse
incentive to stay unemployed. The program became associated with
“indolence and single-parenthood,” Edin and Shaefer write.
But the new program, known as the Temporary
Assistance for Needy Families (or
TANF), has created an entirely different set of motivations.
States have the option to use the federal money for ancillary
programs (like child care) rather than simply doling out money to
the poor. Only a small portion of the federal funding is used for
traditional cash hand-outs, and states now have strong incentives to
give it to people who already hold jobs. If you’re jobless and out
of money, you probably won’t be helped by TANF.
In 1994, the old welfare program served 14.2
million people, two thirds of them children. Today’s program serves
4.4 million, and Edin and Shaefer describe many extreme poor who
believe the government is no longer giving out money at all. In a
handful of states, fewer than 10 percent of poor households with
children receive TANF benefits. In some poor communities, it’s so
hard to find TANF recipients that other families believe the
government has exited the welfare business entirely; they never even
apply.
Edin and Shaefer write that “welfare’s extinction”
has gone “virtually unnoticed” by the press and public, in part
because the economy boomed right after the new legislation took
effect. But now, the contours of the economy have changed, and jobs
at the bottom provide less stability.
The government safety net has been “built on the
assumption of full-time, stable employment at a living wage,” the
authors write. But the new labor market “fails to deliver on any of
the above.”
2. They depend on a shadow (and sometimes
illegal) economy.
The characters in “$2 a Day” often go long periods
virtually without any cash. But they also need to pay their bills.
So they sell social security card numbers of their children
(allowing others to reap the tax rewards). They purchase Kool-Aid,
freeze it into popsicles, and sell the treats out of their home at a
small profit. They trade their food stamps for cash — at a brutal 60
cent-on-the-dollar exchange rate.
These practices have something in common: They are
illegal. In the name of survival, the extreme poor get by with acts
that make their stomachs churn. Edin said in an interview that this
erodes their sense of self-worth, even if they don’t get into legal
trouble.
“We see parents making choices they themselves
feel are objectionable,” she said. “It adds to this feeling — not
only are you unemployed, but you’re scum.”
The authors describe in detail the mini-economy
that has built up around SNAP (or food stamp) cards. Selling food
stamps can result in a felony charge, and technology has made doing
so more difficult. The "food stamps" are loaded onto EBT cards that
require personal ID and pin numbers. Some who want to sell the value
of their food stamps, then, simply make the deal with relatives.
Others stand outside grocery stores and solicit shoppers; one buys
the groceries, the other pays. In some communities, there might also
be an opportunistic small store owner who is willing to help. As the
book details:
The bodega owner will ring through, say, $100
in groceries and charge Jennifer’s card that amount. But instead of
walking out with the groceries, Jennifer will get, say, $60 in cash.
The chief beneficiary of the exchange is not Jennifer but the store
owner, who pockets $ 40 in profit (his price for the risk involved
in the exchange).
3. They donate plasma as a way to get
cash.
According to authors, this is a lifeline among the
extreme poor: For those can’t find jobs, they can still earn money
by donating their plasma, a component in blood that is used by
hospitals. The extreme poor show up at clinics, allow a needle to
withdraw blood from a spot near the top of their forearm, and they
walk away with $30 for three hours of their time. They’re allowed by
law to do this twice a week. No matter that donating sometimes comes
with debilitating fatigue in the aftermath.
Many poor have “divots inside their elbow,” Edin
said in an interview, as a testament to the practice.
As far as cash-earning options go, plasma donation
is among the most appealing — and it’s legal.
Edin said that she spent three summers working in
Cleveland on this book. And one bus stop — near 25th
Street — caught her attention. A plasma clinic was there. And that’s
where much of the bus emptied.
“Sure enough, the bus would stop and every person
— 20, 30 — would go into that clinic,” Edin said. “It was amazing
how many families relied on giving plasma.”
4. They aren’t disconnected from the
workforce.
Edin and Sheafer take pains to point this out, as
if anticipating a reader reflex: Oh, these people just aren’t
trying to find jobs. In fact, they are. And in many cases, they
held jobs, lost them, and then slid backward quickly. If you work a
minimum wage job, for instance, you never accrue savings; if you
lose that job, you have nothing to fall back on.
“The typical family in $2-a-day poverty is headed
by an adult who works much of the time but has fallen on hard
times,” the authors write.
The problem, this book contends, is that the
bottom of America’s labor market has become more tenuous. Gone are
the manufacturing giants who once provided nearly one-third of
American jobs. Now, a new generation of U.S. workers depend on
service sector positions that are often part-time or have varying
hours. Many retailers now swell and shrink their staffs on an hourly
basis, using computer algorithms that predict customer demand.
“The features of the worst jobs in the economy are
a lot worse” than they were, Edin says.
So how might these varying hours translate into
extreme poverty?
Let’s say, for instance, you’re working at a big
retailer. Your hours fluctuate weekly — and drastically so. Because
food stamp benefits change along with income, every fluctuation must
be reported to the Department of Human Services. If you work more
hours one week and fail to report it, that’s fraud — even if you
suspect the increase is temporary. You could go to jail, they
authors write, or at minimum be forced to pay back the “excess”
benefits.
So let’s imagine a job where you work 30 hours one
week and five the next. After a 30-hour week, SNAP benefits decline.
But it might take the government weeks to adjust the benefits amount
downward. This means the benefits could be trimmed just as you hit a
5-hour week, and suddenly you are without income or government
support.
“Whatever can be said about the characteristics of
the people who work low-wage jobs,” the authors write, “it is also
true that the jobs themselves too often set workers up for failure.”
Chico Harlan covers personal economics as
part of The Post's financial team.
Copyright Washington Post