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The US Government Has Abandoned the Nation’s Poor

Poverty is a policy choice — one the U.S. continues to make despite the suffering of millions.

Los Angeles public school support staff, teachers, and supporters rally outside of the school district headquarters on the first day of a three day strike in Los Angeles, California, on March 21, 2023.

On the island of Manhattan, where I live, skyscrapers multiply like metal weeds, a vertical invasion of seemingly unstoppable force. For more than a century, they have risen as symbols of wealth and the promise of progress for a city and a nation. In movies and TV shows, those buildings churn with activity, offices full of important people doing work of global significance. The effect is a feeling of economic vitality made real by the sheer scale of the buildings themselves.

In stark contrast to those images of bustling productivity stands an outcropping of tall towers along the southern end of Manhattan’s Central Park. Built in the last 20 years, those ultra-luxury residential complexes make up what is unofficially known as “Billionaires’ Row.” The name is apt, considering that millionaires and billionaires have flocked to those buildings to buy apartments at unimaginably high prices.

In 2021, the penthouse on the 96th floor of 432 Park Avenue was listed at an astonishing $169 million (though its Saudi owner has since slashed the offering price to a mere $130 million). No less astonishing these days, such lavish, sky-high homes often sit empty. Rather than fulfilling any functional role, many serve as nothing more than speculative investments for buyers who hope, one day, to resell them for even higher prices, avoid taxes, or launder dirty money. For some among the super-rich, flush with more money than they know what to do with, Billionaires’ Row is simply an easy place to park their wealth.

Those empty apartments cast a shadow over a city full of people in need of affordable housing and better wages. Reaching from the southern tip of Manhattan into Brooklyn lies the most economically unequal congressional district in the country. To the north, in the Bronx, sprawls the nation’s poorest district. Just last week, the New York Times reported that, based on 2022 census data, “the wealthiest fifth of Manhattanites earned an average household income of $545,549, or more than 53 times as much as the bottom 20 percent, who earned an average of $10,259.”

In New York, where land is a finite resource and real estate determines so much, it is a cruel irony that the richest people in the world are using their capital to literally reach ever higher into the clouds, while back on earth, the average New Yorker, grimly ensconced in reality, lives paycheck to paycheck, navigating a constant storm of food, healthcare, housing, transportation and utility costs.

Abandonment Amid Abundance

Extreme economic inequality, characterized by a small class of the very wealthy and a broad base of poor and low-income people, may be particularly evident in cities like New York, but it’s a fact of life nationwide. In September 2023, the wealth of America’s 748 billionaires rose to $5 trillion, $2.2 trillion more than in 2017, the year the Trump administration passed massive tax changes favoring the rich. The new 2022 census data offers a very different picture of life for the nation’s poor in those same years. In fact, the numbers are eye-popping: between 2021 and 2022 alone, the overall Supplemental Poverty Measure (SPM) rose by nearly 5%, while child poverty doubled in size.

The U.S. Census Bureau uses two measurements of poverty: the Official Poverty Measure (OPM) and that SPM. The OPM, it’s widely agreed, is shamefully feeble and outdated, while the Supplemental Poverty Measure casts a wider net, catching more of the nuances of impoverishment. Still, even that has its limitations, missing millions of people who flutter precariously just above the official threshold of poverty, constantly at risk of falling below it.

That said, the SPM remains a helpful barometer for this country’s attempts to address poverty. Shailly Gupta-Barnes, my colleague at the Kairos Center and a poverty policy expert, observes that, because the “SPM accounts for family income after taxes and transfers…, it shows the antipoverty effects of some of the largest federal support programs.” Considering that, it’s neither an accident, nor a fluke of the market that the SPM just skyrocketed at an historic rate.

The explanation isn’t even complicated. It’s because a number of highly effective COVID-era, anti-poverty programs were callously cut. (No matter that cases of COVID are again on the rise.) When the newest census figures were released in September 2023, Gupta-Barnes explained, “41% of Americans were poor or low-income in 2022, up significantly since 2021, mainly because of the failure to extend and expand tested anti-poverty programs including the child tax credit, stimulus checks, Medicaid expansion and more.”

The take-away from all of this seems clear enough. When the abundant resources of this society are mobilized to tackle poverty, it decreases; when we undermine those efforts, it increases. The more subtle, but equally important take-away: how we measure poverty has massive implications for how we understand human deprivation in our country. As it happens, tens of millions of people who live in regular economic peril are being made invisible by our very tools for measuring poverty. How, then, can we ever hope to address it in its entirety if we can’t even see the people suffering from its iron grip?

The View from the Bottom

In 2022, the official threshold for poverty was $13,590 per year for one person and $27,750 for a family of four — with about 38 million Americans falling below that threshold. That number alone should shock the conscience of a nation as wealthy and developed as ours. But the truth is that, from the beginning, the official poverty line has been based on an arbitrary and shallow understanding of human need.

First formulated in the 1960s, when President Lyndon Johnson’s administration introduced its War on Poverty, the Official Poverty Measure focuses primarily on access to food for its base line and doesn’t fully take into account other critical expenses like health care, housing, and transportation. It is based on an austere assessment of how much is too little for a person to meet all of his or her needs. Because of its inadequacy, millions of Americans badly in need of support have essentially been erased from the political calculus of poverty. More than half a century later, they still remain so, since the OPM has endured not only as a bureaucratic benchmark but as the authoritative reference point for poverty, influencing our conception of who is poor and, on a policy level, who actually qualifies for a range of public programs.

Since the 1960s, much has changed, even if the official poverty line has remained untouched. The food prices on which it’s based have skyrocketed beyond the rate of inflation, alongside a host of other expenses, including housing, gas, utilities, prescription medicine, college tuition, and now essential costs like internet and cell-phone plans.

Meanwhile, over the last four decades, wage growth has essentially stagnated. Since 1973, wages for the majority of workers have risen by just 9%, while actually falling for significant numbers of lower-income people. Productivity, on the other hand, continues to grow almost exponentially. As a result, workers are making comparatively less than their parents did, even though they may produce more for the economy.

This crisis of low pay is no accident. As a start, over the last 50 years, CEOs have taken ever bigger chunks for themselves out of their workers’ paychecks. In 1965, the average CEO made 21 times what his or her workers did. Today, that figure is 344 times more. The reason for such a dramatic polarization of wages and wealth (as so vividly on display in the current UAW strike) is a half-century of neoliberal policy-making intensely antagonistic to the poor and beneficial for the rich.

Over the decades, our economy has been completely reshaped, transforming the kinds of jobs most of us have and the ways we do them. Today, growing parts of our workforce are automated, non-unionized, low-wage, part-time and/or contracted out, often without benefits like health care, paid sick leave, or retirement plans. No one, therefore, should be surprised to learn that such an increasingly stark division of labor and money is accompanied by an unprecedented $17 trillion in personal debt. (And now, with student debt repayments beginning again on October 1st, there is even more needless suffering for those so poor that their economic value is in the negatives.)

In 1995, the National Academy of Sciences recommended the Supplemental Poverty Measure as a new way of assessing poverty and, in 2011, the Census Bureau began to use the SPM. But even that is insufficient. As Gupta-Barnes explains, “Although a broader and preferred measure, the SPM poverty threshold still remains an incomplete estimate of poverty. For instance, according to the SPM, a four-person household with an income of $30,000 is not poor because they fall above the designated poverty threshold. This means that many households living just above the poverty threshold aren’t counted as poor, even though they will have a hard time meeting their basic needs.”

Indeed, right above the 38 million people in official poverty, there are at least 95 million to 105 million living in a state of chronic economic precariousness, just one pay cut, health crisis, or eviction from economic ruin. In other words, today, the low-wage, laid-off, and locked out can’t easily be separated from people of every walk of life who are being economically downsized and dislocated. The old language of social science bears little resemblance to the reality we now face. When the economically “marginalized” are being discussed, it’s all too easy to imagine small bands of people living in the shadows along the edges of society. Unfortunately, the marginalized are now a near-majority of this country.

Poverty Is a Policy Choice

It’s easy to feel overwhelmed, even paralyzed, by such a reality. No one — billionaires aside — is immune from the dread-inducing gravity of the situation this country finds itself in. But here’s the strange thing: deep in the depths of such a monumental mess, it’s possible to discover genuine hope. For if our reality is human-made, as it surely is, then we also have the power to change it.

Ironically, during the pandemic years, before the poverty numbers rose dramatically again in 2022, it was possible to see a notable and noticeable reduction in the numbers of poor Americans exactly because of decisive government action. In 2021, for example, the Child Tax Credit (CTC) and the Children’s Health Insurance Program (CHIP) played leading roles in reducing child poverty to the lowest rates since the SPM was created. The protection and expansion of Medicaid and CHIP also helped mitigate food insecurity and hunger. The research firm KKF estimates that enrollment in those anti-poverty programs rose from “23.3 million to nearly 95 million from February 2020 to the end of March 2023.” And millions of families were able to stay in their homes and fight unlawful evictions during the first couple of years of the pandemic thanks to federal and state eviction moratoriums.

Unfortunately, these pandemic-era programs were sold to us as only temporary, emergency measures, though they were commonsensical policies that advanced the interests of millions of people who had been poor before COVID-19 struck. And unfortunately, alongside Democrats like Joe Manchin and Kyrsten Sinema, congressional Republicans quickly rolled back some of the most striking advances, including letting CTC expire in 2022 (and they continue to advocate for ever greater cuts).

We are now in the midst of what pundits are calling the “great unwinding,” an awkward euphemism for deliberate, brutal reductions to Medicaid expansion in dozens of states. Since April, nearly six million people, including at least 1.2 million children, have been stripped of life-saving Medicaid coverage and estimates suggest that between 15 million and 24 million people may be disenrolled by next spring.

In (harsh) reality, there are at least these two interrelated ways in which poverty is a policy choice. How we choose to define poverty fundamentally shapes how we understand it, while how we govern has enormous consequences for the everyday lives of poor and low-income people. Right now, we’re either getting celebratory messages about the strength of our economy from Democrats or accusatory scapegoating from Republicans. In truth, though, the current bleak reality of poverty is the consequence of decades of neoliberal neglect and animus by both parties.

The pandemic years, sad as they have been, offered a small glimpse of what it would take to confront the needless scourge of poverty in a time of tremendous national wealth. Those investments could have been a first step in launching a full-scale assault on poverty, building off their embryonic success in the pandemic moment.

Instead, the consequences of the rollback of those programs and the threat of yet more cuts brings us to a potential turning point for the nation. Will we continue to condemn tens of millions of us to cruel and unnecessary poverty, while feeding the drive to authoritarianism or even an all-American version of fascism, or will we move swiftly and compassionately to begin lifting the load of poverty and so strengthen the very foundation of our democracy?

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