Poverty Myths...60 will be below the official poverty line for at least one year, and another 10%...

Poverty Myths

4thworldmovement.org

The truth about four of the most persistentmyths about poverty in America

The United States has one of the highest poverty rates in the developed world, ranking 29of 31 OECD countries in 2012.[1] When it comes to child poverty, a UNICEF report foundthat the United States ranked 34 of 35 developed countries – only Romania had a higherchild poverty rate.[2]

It can be surprising to find so much poverty in a country often thought of as the wealthiestnation in the world. If the per capita gross domestic product of the United States is over$54,000, then why do one in six Americans live below the poverty level, which is as low as$11,700 for a single person, or $24,250 for a family of four?[3]

4 T H W O R L D M O V E M E N T . O R G

The US Doesn't Have Much PovertyF A L S E

M Y T H :

The answer is inequality. The United States is the most unequal developed nation in theworld.[4] The wealthiest 400 American families have more wealth than the poorest 50% ofAmericans combined.[5]

It is interesting to note, however, that when comparing income inequality before taxes, theUS is similar to most other developed nations, and even ranks less unequal than countrieslike Sweden or Denmark.[6] While those countries use their tax code to reduce incomeinequality and fund social programs, we in the United States do comparatively little toaddress poverty and inequality.

1 in 6 Americans Lives Below the Poverty Line


Poor People Don't Want to Work

F A L S E

M Y T H :

Most adults living in poverty who can work do work.

10.7 million American adults between the ages of 18 and 64 who live in households earningbelow the poverty line work full or part time. Those who do not work cite reasons ranging frombeing retired (1.3 million) and pursuing continuing education (3.5 million), to being ill ordisabled (5.2 million) and taking care of family members (3.8 million). Another 1.9 million adultswould like to work, but cannot find jobs they’re qualified for where they live.[1]

Caring for children and family members is a big reason why many adults cannot work. The costof childcare has more than doubled in the last 25 years. Families living in poverty who usechildcare spend 30% of their income on it, compared to an average of only 8% of the income ofall families. Without more low-cost or free options, many adults will be forced to continue tomake a financial choice not to work to avoid care costs that are often higher than theirpotential wages.[2]

Between 2000 and 2012, many people living in poverty moved to the suburbs. Because of this,there were 17% fewer jobs within a typical commuting distance for them.[3] Access to jobs andreliable transportation remain significant obstacles as well, preventing some low-incomeindividuals from working.

The overall picture clearly shows most adults living in poverty are working. Support programsto overcome difficulties in childcare, transportation, and job creation in low-incomecommunities would certainly increase the ability of low-income individuals and households toattain and keep jobs.

59% of adults living in poverty who can work do so.

Yet they still live in poverty.


Drug Use is Higher in Poor Communities

F A L S E

M Y T H :

People in poverty do not use drugs at a higher rate than the rest of society, but they do bear amuch greater burden of punishment, imprisonment, and suspicion for drug-related offenses.

According to a study conducted by the National Institutes of Health,[1] “Those with the highestincomes were most likely to have engaged in extra-medical use of all drug types but forcocaine.” Cocaine was an exception simply because the number of respondents in the surveywho had used cocaine was too small – not because people in lower income levels were morelikely to use. In fact, numerous other surveys suggest that cocaine use is highest among higherincome groups[2].

The same holds true for alcohol. One 2010 study found that 81%of respondents who earn over$75,000 a year drink alcohol, versus 66% of those earning $30,000 to $49,000, and just 46% ofthose earning under $20,000[3].

0

30

60

90

$75k+ $30k - $49k Less than $20k

The false image of higher drug useamong people in poverty is no doubtconnected to disparities in policing. Astudy conducted by New YorkUniversity that looked at disparities inarrest rates for crack and cocaine,found that crack users, who are morelikely to come from lower incomecommunities, were 18 times morelikely to face arrest for drugpossession than cocaine users, whoare more likely to come from higherincome communities. This for thesame quantity of two drugs that areexactly the same chemical product. [4]

Alcohol consumption and income


Drug Use is Higher in Poor Communities

F A L S E

M Y T H :

Drug-related incarceration itself contributes to poverty. Those who have been incarceratedhave a harder time finding jobs on release because of employment discrimination and a lack ofwork experience because of time spent in jail.[5] The effects of incarceration on socioeconomicstatus have been found to stretch over generations.[6]

In Arizona, 108,000 welfare recipientswere drug tested. Only 2 tested positive.

In Florida, $172 million were spent drugtesting welfare recipients. Only 2% tested

positive, saving the state just $98,000.

The authors concluded that, “Crack users are much more likely to experience arrest thanpowder cocaine users, and being poor is the true overwhelming correlate… The sentencing lawsappear to unfairly target the poor, with blacks ultimately experiencing high incarceration ratesas a result.”

Twelve states have even started to require drug testing for welfare recipients based on themisconception that people in poverty use drugs more than the rest of the population. Theseprograms represent a tremendous waste of government money – one program in Florida costthe state $172 million, with only 2% of those tested failing. This saved the government no morethan $98,000.[7] In Tennessee, after 6 months and 16,000 drug tests, just 37 people had testedpositive[8]; in Arizona, after 108,000 drug tests, only 2 applicants were disqualified because ofpositive drug tests.[9]


I Will Never Be Poor

N O T S O S U R E

M Y T H :

40% of Americans will live below the poverty line for at least 1 year.

Another 10% will live at the poverty linefor the same amount of time.

The number of Americans who will experience poverty at some point in their lives is muchhigher than those living in poverty at any one time.

Almost one third of the US population experienced poverty for two or more consecutivemonths between 2009 and 2011. This is twice the national poverty rate. Of those whoexperienced temporary poverty, one third had escaped poverty by 2011. Approximately halfcontinued to have income less than 150 percent of the poverty threshold.[1]

Poverty is not a fixed condition; people move into and out of poverty all the time depending ontheir life situations. Research reveals that nearly 40% of Americans between the ages of 25 and60 will be below the official poverty line for at least one year, and another 10% will be near thepoverty line for a year.[2] A literature review on poverty dynamics done by the Urban Institutealso indicates that over half of the US population will experience poverty at some time beforethe age of 65.[3]

Alarmingly, these numbers are growing. The numbers of people experiencing temporarypoverty and the length of time of these “poverty spells” have grown since the period of 2005 to2007, from 27.1 percent to 31.6 percent and 5.7 months to 6.6 months, respectively.

Poverty is more prevalent than the public generally perceives. For the majority of Americans,poverty is personal.


You Can Live Well on Benefits

N O W A Y

M Y T H :

Living on benefits is not easy – even surviving is a challenge. Benefits definitely do not supportupward mobility.

According to the Center on Budget and Policy Priorities[1], Temporary Assistance for NeedyFamilies (TANF) benefits in 2017 in every single state were not enough to meet 60% of thefederal poverty line. The monthly TANF benefit is less than the rental cost of a modest 2-bedroom apartment in all states, according to the same report. Moreover, in terms ofpurchasing power benefits are less than they were in 1996.

In the most generous state, Alaska, TANF provides just $923 a month for a single parent familyof three. In the least generous, Alabama, it is just $170 a month. Who could live well with solittle? TANF does not provide enough to cover basic necessities.



N O W A Y

M Y T H :

Let’s look at that number from above again – 30% of families receiving TANF do not own a car.Partially this is because in order to qualify to receive benefits you have to prove that you havevery few assets – no more than $1,000 in Washington state [3] – which includes checking andsavings accounts and any stocks or mutual funds. This means that even owning a cheap usedcar can disqualify you from government assistance. Not to mention the challenge of saving upfor a deposit on a new apartment. And that Roth IRA you opened back when you still had a job?If it’s worth over $1,000 you’ll have to empty it.

It’s not just TANF, it’s the heart of how benefits work in the US. A participant in one of theMultidimensional Aspects of Poverty research groups said as much talking about healthcare: Asan elderly disabled person, she worked as much as she could, but not full time. The littleincome she earned, however, meant she didn’t qualify for government supported healthcare inher state, and so she had to purchase it on the marketplace. The plan she could afford wasbasic, and the result was that after paying for healthcare costs out of pocket, she was backbelow the poverty line, taking home less than if she had no job and had qualified for freehealth insurance.

Benefits capture families in a trap – a trap that provides just enough support to keep themafloat, but not enough support to help them escape poverty.

It's a (poverty) trap!

What little money families receiving assistance do get is spent on daily necessities. A studyconducted by the Bureau of Labor Statistics[2] found that of their total budget, familiesreceiving assistance spent 77% on food, transportation, and housing, compared with familiesnot receiving assistance who spent 65.5% of their budget on these expenses. Over 30% of one-parent families receiving assistance did not own a car, compared with just 3% of families notreceiving assistance.



N O W A Y

M Y T H :

One study in the European Union looked at 19,000 people receiving benefits and found a directlink between how generous the benefits are and how much people look for work [4]. In theauthors’ words, “'The notion that big welfare states are associated with widespread cultures ofdependency, or other adverse consequences of poor short term incentives to work, receiveslittle support.”

When people spend all their day just trying to make ends meet they don’t have the energy leftover for an intense job search. Moreover, often the jobs they find won’t pay enough alone toimprove their financial security. Yet still, when they feel that the state is taking care of themthey feel a sense of obligation to give back by working and paying taxes themselves. The net result is that counter to what much of the public debate in the US would have usbelieve –reducing benefit amounts as people find work actually makes their lives even moredifficult and is no way to help them escape poverty.

A study in the European of 19,000 peoplereceiving benefits found that the more

generous the benefits people received... the more they looked for work.

How can people escape?

It seems counter-intuitive – but the way to help people out of poverty isn’t to cut back onbenefits and make their lives even harder, it’s to make benefits more generous.

S O U R C E S

The US Doesn't Have much Poverty: [1] https://data.oecd.org/inequality/poverty-rate.htm - retrieved on February 26,2018; [2] https://www.unicef-irc.org/publications/pdf/rc10_eng.pdf retrieved on February 23, 2018; [3]http://aspe.hhs.gov/2015-poverty-guidelines retrieved on October 19, 2015; [4] ibid; [5]http://www.politifact.com/wisconsin/statements/2011/mar/10/michael-moore/michael-moore-says-400-americans-have-more-wealth-/ retrieved October 26 2015 ; [6] http://www.newyorker.com/news/john-cassidy/american-inequality-in-six-charts - retrieved on October 26 2015

Poor People Don't Want to Work: [1] “Reason For Not Working or Reason For Spending Time Out of the Labor Force--Poverty Status of People Who Did Not Work or Who Spent Time Out of the Labor Force (Based on Redesigned incomequestions and CPS ASEC sample of 30,000 addresses)”http://www.census.gov/hhes/www/cpstables/032014/pov/toc.htm retrieved October 26, 2015; [2] “Child Care Costs onthe Upswing, Census Bureau Reports” http://www.census.gov/newsroom/press-releases/2013/cb13-62.html retrieved on Feb 28, 2018; [3] “The growingdistance between people and jobs in metropolitan America”http://www.brookings.edu/~/media/research/files/reports/2015/03/24-job-proximity/srvy_jobsproximity.pdf retrievedon Feb 26, 2018

Drug Use is Higher in Poor Communities: [1] Degenhardt, Chiu, et al, “Epidemiological patterns of drug use in theUnited States: Evidence from the National Comorbidity Survey Replication, 2001-2003.” Drug Alcohol Depend.2007(October 8; 90(2-3): 210-223 ; [2] http://www.promises.com/articles/cocaine/cocaine-users-higher-incomes-study-finds/consulted on Feb 26, 2018 ; [3] Arthur C. Brooks, “Rising to Your Level of Misery at Work.” Retrieved on Sept 7 2015from: http://www.nytimes.com/2015/09/06/opinion/arthur-brooks-rising-to-your-level-of-misery-at-work.html?_r=0 ;[4] http://www.nyu.edu/about/news-publications/news/2015/02/19/-powder-vs-crack-nyu-study-identifies-arrest-risk-disparity-for-cocaine-use.html retrieved on Feb 26 2015 ; [5] "Incarceration and Social Inequality"http://www.mitpressjournals.org/doi/pdf/10.1162/DAED_a_00019 retrieved on Feb 28, 2018 ; [6] Ibid. ; [7] "WelfareDrug Testing Yields 2% Positive Results" http://tbo.com/ap/politics/welfare-drug-testing-yields--positive-results-252458retrieved on March 3, 2015 ; [8] http://www.tennessean.com/story/news/2015/02/08/drug-testing-tennessee-welfare-applicants-yields-positives/23085301/ retrieved on Feb 26, 2018 ; [9] "Few Welfare Recipients Caught in Drug ScreeningNet So Far" http://blogs.wsj.com/washwire/2014/12/16/few-welfare-applicants-caught-in-drug-screening-net-so-far/retrieved on Feb 28, 2018

I Will Never Be Poor: [1] Edwards, A. N. (2014). Dynamics of Economic Well-Being: Poverty, 2009-2011. U.S CensusBureau. Retrieved from http://www.census.gov/prod/2014pubs/p70-137.pdf retrieved on Feb 26, 2018; [2] Rank, M. R.(2013). Poverty in America is Mainstream. New York Times. Retrieved on Feb 26, 2018 fromhttp://opinionator.blogs.nytimes.com/2013/11/02/poverty-in-america-is-mainstream/?_r=0 02/26/2018 ; [3] Cellini, S.R., McKernan, S., & Ratcliffe, C. (2008). The Dynamics of Poverty in the United States: A Review of Data, Methods, andFindings. The Urban Institute. Retrieved from http://www.urban.org/UploadedPDF/411960_thedynamicsofpoverty.pdf retrieved on Feb 26, 2018


S O U R C E S

You Can Live Well on Benefits: [1] https://www.cbpp.org/research/family-income-support/tanf-cash-benefits-have-fallen-by-more-than-20-percent-in-most-states [2] http://www.bls.gov/opub/btn/volume-2/spending-patterns-of-families-receiving-means-tested-government-assistance.htm [3] https://www.dshs.wa.gov/esa/community-services-offices/tanf-and-support-services [4] http://www.dailymail.co.uk/sciencetech/article-3021698/Generous-welfare-benefits-make-people-likely-work-study-claims.html


Poverty Myths...60 will be below the official poverty line for at least one year, and another 10%...

Documents

Transcript of Poverty Myths...60 will be below the official poverty line for at least one year, and another 10%...