The Corner

Economy & Business

A Misunderstood Case of Poverty

A row of abandoned homes in East Orange, New Jersey, March 25, 2015. (Mike Segar/Reuters)

I often am perplexed by the ways in which we try to put poverty into a social and economic context.

For example, once a year or so, the newspapers will be full of stories about a study concluding that a minimum-wage worker cannot afford the rent on a two-bedroom apartment in any American city. Dig in just a little bit and the claim is clarified: A minimum-wage worker cannot afford the rent on a two-bedroom apartment at the 40th percentile or above without spending more than 30 percent of his income on rent. It is difficult to imagine a more useless datum. Why would we expect a below-average earner to be renting in the middle of the market, rather than, say, renting one of the 39 percent of apartments that are below the 40th percentile? It’s a fundamentally useless way of looking at things, but here’s the Washington Post and everybody else jumping on board. I have been pointing out this particular bit of stupidity for years, but America’s newspaper editors cannot be shamed into critical thinking.

Here is another case for consideration.

Matthew Desmond is the author of Evicted, for which he won the Pulitzer Prize in 2017. He has an essay in The New York Times Magazine this week that is by turns touching and maddening. I very much recommend the essay as a look at what life actually looks like for people at the ragged edge. But it is not very useful (it is the opposite, I’m sorry to say) as an analysis of why they are there or what to do about it.

Desmond tells the story of Vanessa Solivan and her three children and their economic struggles. Solivan is a home health aide, a job for which she is paid between $10 and $14 an hour, depending on the reimbursement rate of the patient in question. She works part time, between 20 and 30 hours a week. Desmond writes that the federal government estimates that Solivan would need to earn $29,420 to meet her family’s basic needs. This is written under the headline: “Americans Want to Believe Jobs Are the Solution to Poverty. They’re Not.”

Aren’t they?

If we assume an average wage of $12 an hour (in the middle of that $10-$14–an-hour spread), then Solivan would earn $24,000 a year by working 40 hours a week 50 weeks a year. As Desmond notes, our welfare programs favor the employed, and as such Solivan would receive about $5,200 in Earned Income Tax Credit benefits, raising her total income, absent any other benefits, to $29,200, just a few dollars shy of that $29,420 estimate of her family’s basic needs. Which is to say, a job looks like a pretty good solution, if not quite a complete solution, to poverty in her case, provided it is a full-time job. So perhaps the headline should be amended: “Part-Time Jobs Are Not a Solution to Poverty.” But that isn’t much of a headline, since not many people believe that part-time jobs are a such a solution.

It will occur to some of you here that the fathers of Solivan’s three children are out of the picture, for the most part. One of them is dead of a gunshot wound after a stint in prison, the other’s contribution to his children’s welfare has been “erratic child-support payments and a single trip to Chuck E. Cheese’s,” as Desmond reports.

What if that weren’t the case?

Two $12-an-hour workers (married, say) working full-time jobs would bring in about $48,000 a year — or about 40 percent more than the median household income in Trenton, N.J., where Solivan lives. So maybe the headline should instead be amended to read: “Having Two Full-Time Earners in a Household Is Actually a Pretty Good Solution to Poverty,” or, if we want to get radical, “Marriage and Full-Time Employment Together Are a Pretty Good Solution to Poverty.”

Desmond gets that: He reports that Solivan and many others like her would prefer to work more hours than they do, but, for many reasons, they cannot. He does not consider very carefully why that is.

It is difficult to look at Solivan’s situation and see a problem that is primarily economic in nature. The wage on offer would, given different family circumstances, be sufficient to raise her and her children out of poverty, even in a low-skill, low-pay job. Of course having two parents working full-time with three children puts all sorts of stress on family life. (Having both of them working — one as a secretary, one as a janitor at a high school — with four children certainly did.) It still would be a tough life.

But — to return to a familiar theme — we must ask: “Compared to what?”

There are all sorts of things to be said and debate to be had about welfare benefits, about taxes, education, the different treatment of investment income and wage income, etc. But does anybody really think that rearranging any of that is going to produce a world in which a part-time home health aide raising three children in New Jersey is not going to have a hard time of it?

And did anybody listen when conservatives were pointing out that the structure of the Affordable Care Act would give employers incentives to prefer part-time workers to full-time workers? Or when your correspondent argued that federal and local policies intended to keep the price of houses high and rising inevitably are going to be hard on the poor? (Rising house prices are great if you own and a bear if you’re buying — and guess who has the political clout: homeowners or renters and young people shopping for their first houses?) Or when social conservatives pointed to the obvious link between single motherhood and poverty?

There are a million things we can and should be doing differently when it comes to helping people such as Vanessa Solivan and her children. But, if anything, her case should point us toward exactly the kind of reforms that conservatives have been arguing for: those that are oriented toward work and eventual self-sufficiency, and those oriented toward the much trickier business of trying to encourage the formation and preservation of intact families, which more and more — and especially in the case at hand — seems to me to be the root of much of the dysfunction under consideration.

The focus on “inequality” is, if anything, counterproductive when it comes to situations like this one. Vanessa Solivan is not poor because people working in technology and finance have done really well in the past 30 years, and she is not poor because people with big investment portfolios have had occasion to break out the champagne. She isn’t poor because other people are rich — that is a primitive and illiterate way of looking at poverty, one that is at odds with the facts of the case presented here with such humane sympathy by Desmond and by other like-minded critics.

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