With Authors Kathryn Edin and H. Luke Shaefer
Since $2.00 a Day: Living on Almost Nothing in America was published in 2015, its claim about the increasing number of families with virtually no cash incomes has sparked a lively debate. Here we review the central arguments of the book and offer additional evidence on trends in access to cash, hardship, and broader indicators of wellbeing among families at the bottom of the income distribution.
While any one source of data has flaws, across multiple data—quantitative surveys and administrative data, evidence from randomized trials, and ethnographic work—we find a consistent portrait of worsening conditions at the very bottom. In many cases, the data suggest that the 1996 welfare law may have driven, or exacerbated, these trends.
The evidence points not just to worsening conditions among families at the bottom of the income distribution, but also to increasing heterogeneity in income among poor parents with children. Just prior to welfare reform in 1993, the Earned Income Tax Credit was expanded (enacted in 1994 and 1996)—a program that virtually guaranteed that parents with children who worked full time, full year, would be lifted above the official poverty line. During the tightest labor market in generations, unprecedented numbers of single mothers began to enter the formal labor market, a trend that most agree was bolstered by the passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, or “welfare reform.” Due to the booming economy and the EITC, those parents who have managed to find, and keep, full time jobs were arguably better off economically than ever before. Kathryn Edin and her colleagues Sarah Halpern-Meekin, Laura Tach, and Jennifer Sykes write about the success of the EITC and the challenges that still face working poor families in their 2015 book, It’s Not Like I’m Poor: How Working Families Make Ends Meet in a Post Welfare World. But in $2.00 a Day, we explore the underbelly of this period of change, those who are much worse off in terms of access to cash aid. It is their story that we explore in $2.00 a Day.