Being poor is expensive. A winter heating bill that comes due before the paycheck arrives can compel a trip to a payday lender who charges 350 percent interest. It takes the entire paycheck to pay off that loan in a week—emptying out the bank account and requiring yet another visit to the lender. A child who is too sick to go to school for a week may need her single father to stay home with her, costing him a quarter of his monthly income. He’s overdue on the rent and the bills, so he’s responsible for late fees as well.
Last week, the Census Bureau put out its annual income and poverty figures for 2012. The big news on the poverty front is that the percentage of Americans living in poverty is unchanged at 15 percent, which amounts to 46.5 million Americans. More than one in five kids under the age of 18 are in poverty, and nearly one in four kids under the age of six are impoverished as well. These are numbers we’ve all become accustomed to, but they can still shock the conscience if you make an effort to let them soak in again.
Cristina Romer, Berkeley economics professor and the former head of President Obama’s Council of Economic Advisers, passed judgment on the merits of raising the minimum wage in Saturday’s New York Times, and in the process made clear why she wasn’t a member of the president’s de facto council of political advisers. She argued, as some mainstream economists do, that the merits of a heightened minimum wage were slight—that it may, for instance, raise prices, offsetting the gain to low-wage workers.
The “facts” about poverty can be deceiving. In her magisterial book Behind the Beautiful Forevers, Katherine Boo tells the stories of the inhabitants of a Mumbai slum on the edge of a sewage lake who lack jobs, housing, running water, health care, education, and police protection. It is not unusual to see rats and frogs fried for dinner, feet covered with black fungus, and maggots breeding in wounds wrought by trash-picking. Yet, Boo writes, “almost no one in the slum was considered poor by official Indian benchmarks. … [They] were thus part of one of the most stirring success narratives in the modern history of global market capitalism.” Some success.
We have two basic poverty problems in the United States. One is the prevalence of low-wage work. The other concerns those who have almost no work.
The two overlap.
Most people who are poor work as much as they can and go in and out of poverty. Fewer people have little or no work on a continuing basis, but they are in much worse straits and tend to stay poor from one generation to the next.
The numbers in both categories are stunning.
Low-wage work encompasses people with incomes below twice the poverty line—not poor but struggling all the time to make ends meet. They now total 103 million, which means that fully one-third of the population has an income below what would be $36,000 for a family of three.