Is it possible for people to live on $2 a day? This is a question most think applies to bygone centuries or impoverished Third World nations. But it turns out to matter for the 21st century United States as well. The U.S. welfare reform enacted in 1996 ended rights to cash assistance for poor families with children. Instead, welfare in America now gives cash assistance for a limited time only. Able-bodied people who apply for welfare must quickly try to find paid employment and participate in activities directly related to preparing for work. In the new system, extra benefits and tax credits go to low-income people with jobs. But what happens to those who cannot find employment – especially during prolonged periods of joblessness like the aftermath of the recent Great Recession?
To find out, we used data from the U.S. Census Bureau from 1996 to 2011 to study U.S. households with children getting by with a daily income of $2 or less, per person – adapting the poverty indicator used across the globe by the World Bank.
American $2-a-Day Poverty Rose Sharply after 1996
Extreme $2-a-day-poverty in the United States did not just spike during the recent economic downturn. It grew throughout the period we studied – from about one in ten of all poor households in 1996 to nearly one of every five in 2011. Remarkably, almost one of every twenty-five American households with children – including about 2.8 million children – lives every day on $2 per person or less.