A Tale of Two 1 Percents

NYTimes.com

From the late 1960s to the mid-1990s, a number of developments turned out to have profound effects on destitute families in the United States, which Kathryn J. Edin and H. Luke Shaefer’s “$2.00 a Day: Living on Almost Nothing in America” brings into sharp relief. Critics of welfare repeatedly argued that the increase of unwed mothers was mainly due to rising rates of welfare payments through Aid to Families With Dependent Children (A.F.D.C.). Even though the ­scientific ­evidence offered little support for this claim, the public’s outrage against the program, fueled by the “welfare queen” stereotype that Ronald Reagan peddled in stump speeches during his 1976 run for the presidency, led to calls for a major revamping of the welfare system

In 1993, Bill Clinton and his advisers began a discussion of welfare reform that was designed to “make work pay,” a phrase coined by the Harvard economist David Ellwood in his 1988 book “Poor Support.” Ellwood, one of Clinton’s advisers, argued that to ease the transition from welfare to work, it would be necessary to provide training and job placement assistance; to help local government create public-sector jobs when private-sector jobs were lacking; and to develop child care programs for working parents. President Clinton’s early welfare-reform proposal included these features, as well as ­another component that Ellwood submitted — time limits on the receipt of welfare once these provisions were in place.

Republicans, however, seizing control of Congress in 1994, devised a bill that ­reflected their own vision of welfare ­reform. Designed as a block grant, giving states considerably more latitude in how they spent government money for welfare than A.F.D.C. permitted, the Republican bill also included a five-year lifetime limit on benefits based on federal funds. States were allowed to impose even shorter time limits. Although the bill increased child care subsidies for recipients who found jobs, the all-important public-­sector jobs for those unable to find employment in the private sector were missing. Moreover, there wasn’t enough budgeted for education and training. Much to the chagrin of the bill’s critics — including Senator Daniel Patrick Moynihan, who predicted in 1995 that the proposed ­legislation would lead to poor children “sleeping on grates” — President Clinton signed the bill, called Temporary Assistance for Needy Families (TANF), on Aug. 22, 1996, two days after his signing into law the first increase in the federal minimum wage in five years.

In the immediate years following the passing of welfare reform, supporters of TANF argued that Moynihan and other critics were proved wrong. The number of single mothers who exited welfare and found work exceeded all expectations; child poverty rates fell; the expansion of the earned-income tax credit, a wage subsidy for the working poor, combined with the 1996 increase in the minimum wage and the additional availability of dollars for child care (as long as the parents were employed), boosted government provisions for working-poor families.

Timing, though, had something to do with the apparent success of welfare reform. The tight labor market during the economic boom of the late 1990s significantly lowered unemployment at the very time that TANF was being implemented. Besides, despite improvements for the working poor, studies revealed that the number of “disconnected” single mothers — neither working nor on welfare — had grown substantially since the passage of TANF, rising to one in five single mothers during the mid-2000s. This is the group featured in “$2.00 a Day,” a remarkable book that could very well change the way we think about extreme poverty in the United States.

When Edin returned to the field in the summer of 2010 to update her earlier work on poor mothers, she was surprised to find a number of families struggling “with no visible means of cash income from any source.” To ascertain whether her observations reflected a greater reality, Edin turned to Shaefer, a University of Michigan expert on the Census Bureau’s Survey of Income and Program Participation, who was visiting Harvard for a semester while she was a faculty member. (Edin and I served on three dissertation committees together; she is now a professor at Johns Hopkins.) Shaefer analyzed the census data, which is based on annual interviews with tens of thousands of American households, to determine the growth of the virtually cashless poor since welfare reform. His results were shocking: Since the passage of TANF in 1996, the number of families living in $2-a-day poverty had more than doubled, reaching 1.5 million households in early 2011. Edin and Shaefer found additional evidence for the rise of such poverty in reports from the nation’s food banks and government data on families receiving food stamps, now called the Supplemental Nutrition Assistance Program (SNAP), and in accounts from the nation’s schools on the rising numbers of homeless children.

In the summer of 2012, the authors also began ethnographic studies in sites across the country: Chicago, Cleveland, a midsize city in the Appalachian region and small rural villages in the ­Mississippi ­Delta. In each of these areas it did not prove difficult to find families surviving on cash incomes of no more than $2 per person, per day during certain periods of the year.

Edin and Shaefer’s field research provides plausible reasons for the sharp rise in destitute families. The first has to do with the “perilous world of low-wage work.” The mechanization of ­agriculture has wiped out a lot of jobs in the Mississippi Delta, and even in cities like Chicago, the number of applicants for entry-level work in the service and retail industries far exceeds the number of available positions: “Companies such as Walmart might have hundreds of ­applicants to choose from” for any one position. ­Moreover, work schedules are often unpredictable, with abrupt ups and downs in the number of hours a worker gets. Responding to decreasing demand, “employers keep employees on the payroll but reduce their scheduled hours, sometimes even to zero.”

Furthermore, given the glut of applicants, an employer can quickly move to the next person on the list if a job seeker can’t be reached by telephone immediately, which is a real problem for those who live in homeless shelters and lack cellphones. Finally, many applicants who are eligible for TANF aren’t even aware that it is available. The authors meet people who “thought they just weren’t giving it out anymore.”

There are various strategies that the $2-a-day poor use to survive — from taking advantage of public libraries, food pantries and homeless shelters to collecting aluminum cans and donating plasma for cash. Still, in small Delta towns “the nearest food pantry is often miles away, despite the sky-high poverty.” SNAP constitutes the only real safety net program available to the truly destitute — but it cannot be used to pay the rent. “While SNAP may stave off some hardship,” the authors write, “it doesn’t help families exit the trap of extreme destitution like cash might.”

All of the $2-a-day families highlighted by Edin and Shaefer have had to double up with kin and friends at various times because their earnings were insufficient to maintain their own home. Some had to endure verbal, physical and sexual abuse in these dwellings, and the ensuing trauma sometimes precipitated a family’s fall into severe poverty.

This essential book is a call to action, and one hopes it will accomplish what Michael Harrington’s “The Other America” achieved in the 1960s — arousing both the nation’s consciousness and conscience about the plight of a growing number of invisible citizens. The rise of such absolute poverty since the passage of welfare reform belies all the categorical talk about opportunity and the American dream.