Awards

2016 Hillman Prize for Book Journalism

The Society of the Midland Authors Finalist for Adult Nonfiction Book of the Year

J. Anthony Lukas Book Prize Shortlist

 
 

Jessica Compton’s family of four would have no income if she didn’t donate plasma twice a week at her local donation center in Tennessee. Modonna Harris and her teenage daughter Brianna, in Chicago, have gone for days with nothing to eat other than spoiled milk.

After two decades of groundbreaking research on American poverty, Kathryn Edin noticed something she hadn’t seen before — households surviving on virtually no cash income. Edin, whose deep examination of her subjects’ lives has “turned sociology upside down” (Mother Jones), teamed with Luke Shaefer, an expert on surveys of the incomes of the poor. The two made a surprising discovery: the number of American families living on $2.00 per person, per day, has skyrocketed to one and a half million American households, including about three million children. 

But the fuller story remained to be told. Where do these families live? How did they get so desperately poor? What do they do to survive? In search of answers, Edin and Shaefer traveled across the country to speak with families living in this extreme poverty. Through the book’s many compelling profiles, moving and startling answers emerge: a low-wage labor market that increasingly fails to deliver a living wage, and a growing but hidden landscape of survival strategies among America’s extreme poor. Not just a powerful exposé, $2.00 a Day delivers new evidence and new ideas to our national debate on income inequality.

 
 
 
 

Critique of $2.00 a Day, or New Evidence of Need Among America’s Poorest?

By H. Luke Shaefer, June 17, 2020

Summary

A recent working paper by Bruce Meyer and colleagues seeks to critique my book (co-authored with Kathryn Edin), $2.00 a Day: Living on Almost Nothing In America. Yet while there are disagreements between this new paper and my book, in fact considerable alignment emerges about who the most vulnerable families with children are in the United States.

$2.00 a Day was about the rise of families with children experiencing spells with extreme low cash incomes following the 1996 Welfare Reform. Edin and I argue that in-kind benefits like SNAP (food stamps) are important—even vital. Yet in 21st Century America, they are not enough—cash is critical. In contrast, Meyer and his colleagues argue that in-kind benefits are exactly the same as cash and no distinctions should be made between them.

Using the most comprehensive dataset ever assembled linking survey data to administrative earnings and benefits data, Meyer et al find that the group that mirrors the one Edin and I describe in our book—reporting extreme low cash incomes but receiving in-kind benefits— experiences the very highest rates of material hardship of any they examine. They conclude that these families “appear to be considerably worse off than those in official poverty.” Even further, their analysis shows that by far the greatest concentration of this group is among single parent families with children, exactly the group most impacted by welfare reform.

Thus, while we may disagree about the right terminology to describe this group, we agree that they exist and are exceptionally disadvantaged. I argue this new research lends further evidence to the book’s central thesis, and strengthens the case for more aid to America’s most vulnerable families.

Read the full response here.

 
 

More From the Authors:

Welfare Reform and the Families It Left Behind

By H. Luke Shaefer and Kathryn Edin

Since the early 1990s, the safety net for families with children has been funda- mentally reformed. The expansion of the Earned Income Tax Credit (EITC) in the early 1990s and of public health insurance in the late 1990s are two classic reforms that are largely viewed as highly successful.

Yet the legacy of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) remains less clear. This landmark legislation replaced Aid to Families with Dependent Children (AFDC), which offered an unlimited legal entitlement to aid among those who could demonstrate need, with Temporary Assistance for Needy Families (TANF), which ended the legal entitlement to aid and imposed work require- ments and lifetime limits. 

Continue reading...

 
 
 

Resource Spotlight

The ELEVATE Act Explained:

A "Job Guarantee" That Can Actually Work

By Samuel Hammond, Niskanen Center

Read the full report here.

Findings from a small, exploratory study on how food insecurity affects teens (ages 13 to 18) and threatens their well-being. Across 20 focus groups in 10 diverse communities, we heard similar themes:In simple economic models, workers disrupted by trade or automation are instantly reallocated from declining industries to ones on the rise. Yet that is rarely if ever the case in the real world. Labor markets are highly complex institutions, riddled with frictions created by geography, social networks, discrimination, and regulations that vary from place to place.

In a world where nothing ever changes, this wouldn’t be a big problem. Yet in a dynamic, growing economy, change is the rule, particularly with increased foreign trade and major breakthroughs in AI and robotics on the horizon. This demands that the United States finally get around to constructing a truly national labor market — one with robust employment, training, and relocation supports that follow workers wherever they go.

The “Economic Ladders to End Volatility and Advance Training and Employment” or ELEVATE Act is a big first step in that direction. It provisions include:

  • A new title to the Social Security Act for states to fund and implement subsidized employment programs;

  • Guardrails that ensure states pursue re-employment and retraining programs with a strong evidence base and low overhead;

  • Funding conditioned on states’ quarterly unemployment rates to create aggressive and fast-acting “automatic stabilizers”;

  • A demonstration project to identify “pro-worker employers” to ensure subsidized job placements don’t erode job quality;

  • A national self-employment benefit for recently unemployed workers to pursue entrepreneurship;

  • And a national relocation assistance program to reimburse eligible individuals for the expenses associated with “moving to opportunity.”

Inspired by over 40 years of research into employment subsidies, including about a dozen controlled pilot programs, the ELEVATE Act is the most carefully constructed and evidence-driven proposal for strengthening labor markets in a generation. And as discussed below, while there are several areas for improvement, it has the potential to appeal across partisan lines by tying employment security to a vision of an even more free and dynamic market economy.

Continue to full report…

 
 
 
 

Thoughts

Featured
Annual $2-a-Day Poverty among Children in Single Mother Households Grew more than 660% between 1995 and 2012 after Reducing Survey Bias

Back in the field in 2010 to study the deeply poor, Kathryn Edin began to encounter something markedly different from anything she had seen in 20 years of canvassing poor communities: families with no visible means of cash income from any source. As Edin and I write in $2 a Day: “[W]hat was so strikingly different from a decade and a half earlier was that there was virtually no cash coming into these homes.”

Has there been a spike in the number of children going for periods with virtually no cash in the U.S.? We began to test this with the Survey of Income and Program Participation (the SIPP). We then substantiated our core findings in two other major household surveys beyond the SIPP, and in administrative records. Recently we’ve released analyses using survey data that have been adjusted using a micro-simulation model called TRIM, which corrects for “underreporting” of public benefits—when people forget or choose not to say they receive benefits from a program like TANF. Specifically we used TRIM to correct for underreporting in TANF and SSI income. Even with these corrections, survey data remain imperfect, as discuss in our previous post. But TRIM is a significant improvement over unadjusted CPS data.

In our first blog post on TRIM, we examined the increase in annual $2-a-day poverty for all children using TRIM adjusted data. While the overall levels of extreme poverty are somewhat lower after adjusting for underreporting, the magnitude of the change since 1995 was much bigger. Rather than doubling, extreme poverty using TRIM roughly tripled between 1995 and 2012.

Here we examine TRIM results for children in single mother households. If our hypothesis is correct—and the rise in extreme poverty is driven largely by the declining reach of welfare through Temporary Assistance for Needy Families (TANF)—then the change in extreme poverty should be driven by single mother households, those most affected by welfare reform.
The Magnitude of the Change in $2-a- Day Poverty since 1996 is Even Larger After Reducing Survey Bias

Back in the field in 2010 to study the deeply poor, Kathryn Edin began to encounter something markedly different from anything she had seen in 20 years of canvassing poor communities: families with no visible means of cash income from any source. As Edin and I write in $2 a Day: “[W]hat was so strikingly different from a decade and a half earlier was that there was virtually no cash coming into these homes.”

Has there been a spike in the number of children going for periods with virtually no cash in the U.S.? We began to test this with the Survey of Income and Program Participation (the SIPP), where we saw a striking spike in the number of households with children reporting cash incomes of no more than $2 per person, per day over a month, a calendar quarter, and a year. To date, we have substantiated our core findings in two other major household surveys. Yet all of these surveys suffer from problems—some people may not want to reveal all their sources of income, they may forget, or they may misunderstand the questions. Perhaps our findings across three surveys were driven entirely by faulty data.

We tested this first by examining administrative records from the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps)—which told much the same story as the SIPP. But another important source can help here—the federal government supports a micro-simulation model called TRIM, which is constructed by the non-partisan think-tank, The Urban Institute. TRIM corrects Current Population Survey (CPS) data for the “under-reporting” of public benefits—when people forget or choose not to say they receive benefits from a program like TANF. We can use it to examine data that is adjusted for these factors. Even with these corrections, survey data remain imperfect. And when extreme poverty is measured with an annual recall, you might expect it to be subject to a lot of error (people might not remember their income from January well when reporting after the end of a year; TRIM doesn’t correct for reporting in other forms of income besides public participation). But TRIM is a significant improvement over unadjusted survey data from the Current Population Survey, and we seek to determine if results using TRIM match our previous findings from other data sources.

What is the Evidence of Worsening Conditions among America’s Poorest Families with Children?
 
 
 

Latest News

Featured
The ELEVATE Act Explained: A "Job Guarantee" That Can Actually Work

By Samuel Hammond, Niskanen Center

In simple economic models, workers disrupted by trade or automation are instantly reallocated from declining industries to ones on the rise. Yet that is rarely if ever the case in the real world. Labor markets are highly complex institutions, riddled with frictions created by geography, social networks, discrimination, and regulations that vary from place to place.

In a world where nothing ever changes, this wouldn’t be a big problem. Yet in a dynamic, growing economy, change is the rule, particularly with increased foreign trade and major breakthroughs in AI and robotics on the horizon. This demands that the United States finally get around to constructing a truly national labor market — one with robust employment, training, and relocation supports that follow workers wherever they go.

Read More →
United Nations Report on Extreme Poverty in United States

Report of the Special Rapporteur on extreme poverty and human rights on his mission to the United States of America

Note by the Secretariat

The Secretariat has the honour to transmit to the Human Rights Council the report of the Special Rapporteur on extreme poverty and human rights, Philip Alston, on his mission to the United States of America from 1 to 15 December 2017. The purpose of the visit was to evaluate, and report to the Human Rights Council on, the extent to which the Government’s policies and programmes aimed at addressing extreme poverty are consistent with its human rights obligations and to offer constructive recommendations to the Government and other stakeholders.

Read More →
Developing World's Parasites, Disease Hit U.S.

Researchers Say Infections Spread by Bug Bites, Larvae Are Flourishing Along Border and in Other Pockets of Poverty

By Stephanie Simon and  Betsy McKay, The Wall Street Journal

Parasitic infections and other diseases usually associated with the developing world are cropping up with alarming frequency among U.S. poor, especially in states along the U.S.-Mexico border, the rural South and in Appalachia, according to researchers.

Government and private researchers are just beginning to assess the toll of the infections, which are a significant cause of heart disease, seizures and congenital birth defects among black and Hispanic populations.

Read More →
Extreme poverty returns to America

The U.N. finds growing numbers of Americans are living in the most impoverished circumstances. How did we get here?

“Finish all your food,” my mother used to tell me. “There’s a child in Africa who would love to have that food on your plate.” It was an effective disciplinary approach, especially because my family is from Africa. But my experience is not unique. Images of poverty in the “Third World” — then and now — permeate American society, reassuring us about our country’s ostensible democratic promise and potential for upward mobility. What economists call “extreme poverty,” most Americans think, is a distant problem, a hallmark of the less developed world.

But could extreme poverty also be a feature of what is (although perhaps not for long) one of the richest and most powerful nations in the world? Quite possibly. To answer the question, the United Nations launched an investigation of extreme poverty in the United States.

Read More →
 
 

Praise for $2 a Day: Living on Almost Nothing in America

 
Testimonials
"Affluent Americans often cherish the belief that poverty in America is far more comfortable than poverty in the rest of the world. Edin and Shaefer's devastating account of life at $2 or less a day blows that myth out of the water. This is world-class poverty at a level that should mobilize not only national alarm, but international attention."

— Barbara Ehrenreich, author of Nickel and Dimed

"In $2.00 a Day, Kathryn Edin and Luke Shaefer reveal a shameful truth about our prosperous nation: many — far too many — get by on what many of us spend on coffee each day. It’s a chilling book, and should be essential reading for all of us."

— Alex Kotlowitz, author of There Are No Children Here

"Kathryn Edin and Luke Shaefer deliver an incisive pocket history of 1990s wel- fare reform — and then blow the lid off what has happened in the decades after- ward. Edin and Shaefer’s portraits of people in Chicago, Mississippi, Tennessee, Baltimore, and elsewhere, forced into underground, damaging survival strategies here in First World America, are truly unforgettable. This is income inequality at its most hidden and most stark."

— Michael Eric Dyson, author of Come Hell or High Water

"Kathryn Edin and Luke Shaefer, with compelling statistics and wrenching human stories, illustrate how — with incomes far below the pay of low-wage jobs that cripple families by the millions — a shocking number of Americans live in an almost unimaginable depth of poverty with near-zero incomes. We have let the bottom go out of the American economy. This powerful book should be re- quired reading for everyone."

— Peter Edelman, author of So Rich, So Poor