With all the money we have given them, why are the poor still poor?
One of the meanest right-wing statistical memes about poverty has been popping up a lot this fall. I saw it most recently in this commentary by Christine Kim, who wrote:
Since the mid-1960s, government has spent more than $19.8 trillion (in 2011 dollars) in total on means-tested welfare programs. With 80 such federal programs, targeted government spending for low-income families – including on health, education, housing, and income supports – totaled nearly $930 billion in fiscal 2011 alone. If converted to cash, this sum would be four times what is needed to lift every poor family out of poverty. About half of this annual means-tested spending goes to families with children. If divided among the 14 million poorest families with children, each family would receive about $33,000. Why, then, have poverty rates remained so high for so long? Clearly, the solution to alleviating poverty is not more of the same.
Brookings’ Ron Haskins used the same numbers, rearranged slightly, to write this in November:
We already spend more than enough money on means-tested programs for poor and low-income people to bring them all out of poverty. There were about 46.5 million people in poverty in 2012, a year in which spending on means-tested programs was around $1 trillion. If that money were divided up among the poor, we could spend about $22,000 per person. For a single mother and two children, that would be over $65,000. The poverty level in 2013 for a mother and two children is less than $20,000. So this strategy would work, but giving so much money to young, able-bodied adults would not be tolerated by the public.
This way of manipulating welfare state spending seems to have originated from Robert Rector at Heritage, who offered it in Congressional testimony in 2012.
This meme is — and I am choosing my words carefully — stupid and evil.
It’s stupid because it ignores how poverty is calculated and how “means-tested” money is spent. If you took away Medicaid and housing support alone, the poverty line for a single mother with two children would have to be a lot higher. For example, according to Rector’s original figures (shared here), half of that means-tested money is spent on medical care, mostly Medicaid. So, Haskins, if you took away Medicaid (and Obamacare subsidies), how much would a single mother with two children need to survive? Health insurance alone would cost her more than $10,000.
So is $33,000 per family such a ridiculously generous amount to live on that it would easily lift people out of poverty? Not without the benefits poor people get. Or if they get sick. In round numbers 10 years old, 5% of the population spends half the money on medical care. Using the distribution reported in that paper, $10,000 per family on medical care is not much, if it’s distributed more or less like this:
Further, all those non-poor families living on $33,000 in employment income are getting benefits, too, like tax-subsidized employer-provided healthcare, mortgage interest deductions, unemployment insurance, and retirement savings. If you took all that away and gave these non-poor families $33,000 to live on, they wouldn’t be non-poor for long. So the argument is stupid.
It’s also evil, because it says, “We’ve thrown so much money at poor people and it just doesn’t work, so it’s time for them to step up and contribute a little themselves.” The main thing Kim wants them to do is get married. She even says, “If single mothers simply were to wed the father of their child, their likelihood of living in poverty would fall by two-thirds,” and adds that, “contrary to myth the fathers are quite ‘marriageable.'”
The calculations for this are not shown, which is probably just as well. But the idea that the “benefits” of marriage — that is, the observed association between marriage and non-poverty — would accrue to single mothers if they “simply” married their partners is bonkers. There is a marriage queue (imperfect of course) that arranges people from most to least likely to marry, and on average the richer, healthier, better-at-relationships people are at the front, more likely to marry and produce the observed “benefits” of marriage. “Marriageable” isn’t a dichotomous condition, but it’s obvious that at any one time the currently non-married are not the same as the currently married.
But back to evil. The idea that we’ve spent so much on poverty that it proves spending doesn’t solve poverty is like saying, “we’ve spent $13 trillion on the military in just the last quarter century, and we don’t have complete world domination yet, so obviously war is not the answer.”
Oh, wait, I do agree with that.
But we don’t spend money on the military and fight wars to fix the world. We do it to fatten defense contractors, provide jobs, prop up unpopular allies, and defend the country from the occasional threat. The defense industry doesn’t have to defend the claim that the spending is a one-time thing to cure a problem.
Giving poor people money — or in-kind benefits — to help them survive is not a solution to poverty, it’s a treatment for poverty. If we had more decency we’d do more of it.