Lecture 6 How poor are the poor? American Poverty in a Global Context

Lecture 6

How poor are the poor? American Poverty in a Global

Context

Today’s Readings

1. Schiller Ch 4: Global Poverty and Inequality2. Center on Hunger and Poverty,

http://www.wiserearth.org/organization/view/3639bc138caa8aa863036a4dcac775be New url and focus on global hunger!!!

3. Hunger in America, http://www.pbs.org/moyers/journal/04112008/profile4.html See particularly the 13 minute video at http://www.pbs.org/moyers/journal/04112008/watch.html

4. Also see the 30 minute video, Life on the Edge (2002), and related links including the learning page, http://www.feedingamerica.org/learn_about_hunger/

Readings, cont.

5. Edin and Lein, “Making Ends Meet at a Low-Wage Job,” eReserves

6. Center on Budget and Policy Priorities, “Poverty and Hardship Affect Tens Of Millions of Americans,” http://www.cbpp.org/12-20-07pov.htm

7. DeParle, Ch. 4: The Survivors: Milwaukee, 1991-1995

Today’s Topics

• Contribution’s of Amartya Sen– Capabilities Deprivation

• Operationalizing a broader definition of well-being

• Hunger in America • Making Ends Meet--when earnings

aren’t sufficient to cover needs• Homelessness in America

Amartya Sen, 1933-

• Winner of the Nobel Prize in Economics– http://nobelprize.org/nobel_prizes/

economics/laureates/1998/press.html

Sen’s Capability Deprivation

1. What definition of poverty does Sen propose?

– The deprivation of basic capabilities--substantive freedoms that a person enjoys to lead the kind of life that he or she values.

2. What basic capabilities does Sen have in mind?

– Individual agency, economic opportunities, political freedoms, social facilities, transparency guarantees, and protective security.

Sen’s Capability Deprivation, cont.

3. Why is measuring the lowness of income inadequate as a measure of poverty?

– Income is instrumentally, not intrinsically important to the development of capabilities; ie., income is a means to the desired ends. Attaining these ends requires access to certain freedoms

– Income is not the only instrument important for generating capabilities (political freedoms, social opportunities, transparency guarantees, protective security)

– The effect of income in producing capabilities is not constant; rather it varies across individuals (with age and gender), and across countries (location and epidemiological atmosphere).


4. Is it feasible to measure poverty using Sen’s concept of capabilities?

a) Human Poverty Index is constructed in this spirit 1) For definition see: http://hdr.undp.org/en/statistics/indices2) Key concepts

a) Survivalb) Knowledge c) Decent standard of living

b) Human Development Index (maps!) http://en.wikipedia.org/wiki/Human_Development_Index#Top_thirty_countries


5. How would Sen respond to the claims of some that by world standards, no Americans are poor?

Hint: Consider the following quote:

. . . relative deprivation in terms of incomes can yield absolute deprivation in terms of capabilities. (p. 89)


6. What are the implications of Sen’s analysis for the formulation of policies to aid the poor?

– Hint: consider the following quotation:“What the capability perspective does. . . . is to enhance the understanding of the nature and causes of poverty and deprivation by shifting primary attention away from the means [income] . . . . to ends and . . . . and to the freedom’s to be able to satisfy these ends.” (p. 90)

Hunger in America

• Video Illustration from Bill Moyers Journal– http://www.pbs.org/moyers/journal/04112008/watch.html

Hunger in America National Prevalence, 2006

• 11 percent of households were food insecure at least some time during the year

• 35.5 million people lived in these food-insecure households, including 12.6 million children.

• 7.7 million adults and 3.4 million children lived in households with very low food security.

Source: USDA Economic Research Service,

http://www.ers.usda.gov/Briefing/FoodSecurity/trends.htm

Hunger in America National Prevalence, 2006

• Children are usually protected from substantial reductions in food intake even in households with very low food security. How?

Food Insecurity by Household TypeGroups with rates of food insecurity much higher than the national average (10.9%)

• Households with incomes below the official poverty line—$20,444 for a family of four in 2006 (36.3 percent)

• Households with children, headed by a single woman (30.4 percent)

• Black households (21.8 percent)• Hispanic households (19.5 percent).

Source: USDA Economic Research Service, http://www.ers.usda.gov/Briefing/FoodSecurity/trends.htm

Geographic Distribution of Food Insecurity

Federal Food Assistance Programs

Source: USDA Economic Research Service, http://www.ers.usda.gov/Publications/ERR49/

Food Pantries and Emergency Kitchens

Source: USDA Economic Research Service, http://www.ers.usda.gov/Publications/ERR49/

Making Ends Meet

• Based on the book, Making Ends Meet: How single Mother Survive Welfare and Low-Wage Work, by Kathryn Edin and Laura Lein, 1997

• Sample– 165 single mothers who worked at low wage

(< $8/hr) and did not receive welfare– 4 locations: Boston, Charleston, Chicago, and San

Antonio– Data refer to 1988-1992

Making Ends Meet

• How much did working mothers spend each month?

• How much income did they have at their disposal?

• How far did their income stretch?• What strategies did they use to fill the gap

between earnings and expenditures?• What hardships were endured?

Making Ends Meet

• How much did working mothers spend each month?– $1,243 on average (~$15,000 annually)

• Housing costs $341 27%• Food costs $249 20%• Other necessities $569 46%• Nonessentials $ 84 7%

Making Ends Meet

• How much income from earnings and government programs did they have at their disposal?– Earnings: $667-$892– Food Stamps: $10 to $130

(Varies by Location)

– EITC: Would be bigger today

Making Ends Meet

• How far did their income stretch?– Earnings covered only 63% of their

expenses– Food Stamps and the EITC covered

another 7%

Making Ends Meet

• What strategies did they use to fill the gap between earnings and expenditures? (percentages are percent of total budget)

– Work based strategies: 7% Network based strategies: 21%

• Family and friends : 5%• Boyfriends “pay and stay”: 5%• Absent fathers: 10%

– Agency based strategies: 3%

Making Ends Meet

• What hardships were endured?– 24% experience a food shortage– 8% went hungry– 15% went without winter clothing– 33% went without phone service– 17% had their gas or electricity shut off– 33-50% did not see a doctor when they needed one– 8% were evicted and 12% were homeless part of

the year– 24% doubled up with a friend or a relative

Making Ends Meet

• Conclusions– Single mothers must make hard choices

• Follow the rules and subject family to hardships• Break the rules

– off-the-books work– Circumvent Child Support Enforcement System– Exchange food stamps for cash

• Choose between necessities– Pay the utility bill or take a child to the doctor

Homelessness in America

• What is the definition of homelessness?• What reliable sources of information are available?• How many people experience homelessness?• Who are the homeless?• What hardships do they face?• Why are they homeless?• How has America responded to the homeless?• Are we solving the problem of homelessness?

Homelessness in AmericaWhat is the definition of homelessness?

• Definition according to the Stewart B. McKinney Act, a person is considered homeless who “lacks a fixed, regular, and adequate higt-time residence; and . . . Has a primary night time residency that is – A supervised publicly or privately operated shelter designed to

provide temporary living accommodations. . .– An institution that provides a temporary residence for

individuals intended to be institutionalized, or– A public or private place not designed for, or ordinarily used

as, a regular sleeping accommodation for human beings (cars, parks, public spaces, abandoned building, bus stations)

Homelessness in AmericaWhat reliable sources of information are available?

• National Alliance to End Homelessness– http://www.endhomelessness.org/back/index.htm

• National Coalition for the Homeless– http://www.nationalhomeless.org/ – http://www.naeh.org/back/MayorsReport2005.pdf

• 24 city survey– http://www.nationalhomeless.org/publications/facts.html

• National Law Center on Homelessness and Poverty– http://www.nlchp.org/

http://www.endhomelessness.org/back/index.htm

http://www.nationalhomeless.org/

Homelessness in AmericaHow many people experience homelessness?

• Methodological Issues– Point-in-time counts vs. Period prevalence counts– The “hidden” homeless

• Estimates (p-in-t, 1996 survey of service providers)– 3.5 million people, including 1.35 million children

are likely to experience homelessness in a given year

– 1% of the U.S. Population– Homeless rates tripled between 1981-1989– The average stay in a shelter is 8 months.

Homelessness in AmericaWho are the homeless?

• By age– 39 % are less than 18 years– 25 % are between 25 and 34 years– 6 % are between 55 and 64 years

• By gender and family status– 41% are single men– 14% are single women– 40% are families with children (largest group in

rural areas

Homelessness in AmericaWho are the homeless? p. 2

• By ethnicity (varies by location)– 49 % African-American– 35% Caucasian– 13% Hispanic– 2% Native American– 1% Asian

Homelessness in AmericaWho are the homeless? p. 3

• Other characteristics– 22%-25% of women are victims of

domestic violence– 40% of single men are veterans– 23% of single adults suffer from severe

and persistent mental illness– 30% of single adults have addiction

disorders– 17% plus of urban homeless have jobs

Homelessness in AmericaWhat are the causes of homelessness?

• One the demand side:– lack of jobs that pay a living wage

• 46% of jobs with the most growth between 1994-2005 pay less than $16,000

– and declining value of minimum wage• Federal minimum wage remains unchanged for eighth

straight year, and fell to 56-Year low relative to the average wage

• In every state, more than the minimum wage is required to afford a one- or two-bedroom apartment at 30% of one full-time workers wage


• On the demand side:– Declining value and availability of public

assistance:• Maximum TANF benefit is less than half of the poverty

line• In 125 housing markets, rent for a one-bedroom

apartment exceeded recipients total SSI benefit• Welfare roles have declined 60% but the number of

families in poverty has increased• Inadequate supply of housing vouchers

– South Bend example; average wait 35 mo. In U.S.– Only 1 in 4 TANF families lives in public housing or

receives a housing voucher

Lynn Coleman, assistant to South Bend's mayor, tries to calm the crowd gathered Wednesday morning at the South Bend Housing Authority. They were waiting to add their names to the waiting list for Section 8 low-income housing vouchers.

South Bend Tribune,02/02/02


• On the supply side:– A lack of affordable housing units

• From 1973, 2.2 million low-rent units disappeared• In 1995, there was an estimated shortage of 4.4 million

affordable housing units• The number of housing units that rent for less than $300

fell by 1.3 million (19%) between 1996-1998.• Federal support for low-income housing fell 49% from

1980 to 2003.– 1.3 milion public housing units in the U.S. in 2006– http://www.hud.gov/renting/phprog.cfm


• Additional factors:– Mental illness and lack of needed services– Addiction disorders– Domestic violence– Prisoner re-entry– Lack of affordable health care

Homelessness in America

• What hardships do they face?– Hate Crimes– Hunger– Poor Health– Disrupted education– Family dissolution– Dislocation

Homelessness in America How has America responded to homeless?

• The Good News: Stewart McKinney Act, 1987– Congress funded six programs to provide

aid to the homeless • emergency shelter grants • emergency food programs • new housing demonstration projects • community health-care services • basic education, and • other services.


• Accomplishments of McKinney Programs: 1995-1996– assisted significant numbers of homeless persons

to regain independence and permanent housing and at reasonable costs.

– Given localities and states new tools for addressing the problem of homelessness

– represent innovative and effective efforts to improve access to health and health-related services for homeless people in the United States


• The Bad News: – Problems with McKinney Programs:

• inadequate funding clearly impedes the effectiveness

• it focuses on emergency measures -- it responds to the symptoms of homelessness, not its causes.


– In 2003, the federal government spent almost twice as much in housing-related tax expenditures and direct housing assistance for households in the top income quintile than on housing subsidies for the lowest income households.


• Criminalizing homelessness– making it illegal to perform life- sustaining activities

in public:– sleeping/camping, – eating, – sitting, – begging in public spaces, – criminal penalties as assessed for violating of

these laws. • http://www.nlchp.org/content/pubs/ADreamDenied1-11-06.pdf

Homelessness in America Are we solving the problem of homelessness?

• Homelessness shows no signs of abating • Between 2004 and 2005 requests for assistance

rose, – Requests for assisted housing by low-income families

increased by 86 %– Requests for emergency shelter increased 6% between

2004 and 2005

• But not all could be met– an average of 14 percent of overall emergency shelter

requests went unmet – 32 percent of shelter requests by homeless families

unmet

And then came Katrina. . .

• The number of people living on the streets threatens to grow as thousands of people are now homeless as a result of Hurricane Katrina.

• According to the Federal Emergency Management Agency, as of late November, approximately 50,000 hurricane evacuees remained in hotels and motels awaiting alternative housing options.

Documents

Lecture 6 How poor are the poor? American Poverty in a Global Context