In the May 16 seminar “Getting to Know ISR: Living on Almost Nothing in America,” H. Luke Shaefer discussed the rise of abject poverty in America, the plight of the families in its grip, and the failure of the policy initiatives designed to help them.
Shaefer, a faculty associate in the Population Studies and Survey Research Centers, an associate professor of social work and public policy, and director of U-M Poverty Solutions, discussed the 2016 book he co-authored with Kathryn Edin, $2 a Day: Living on Almost Nothing in America.
The concept for the book developed in 2010 when Edin told Shaefer of her visits to some of the poorest homes in America and how they were virtually cashless. He thought delving deeper into these stories might change the way people thought about cash. Shaefer wondered what types of things might be considered an equal substitute for cash. Could free school lunch or food stamps serve as currency?
Shaefer first evaluated the two decades of policy initiatives affecting the poorest Americans. In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act was passed solely to end the Aid to Families with Dependent Children (AFDC) program, an unpopular existing cash assistance system. AFDC was, in 1997, replaced with the Temporary Assistance for Needy Families (TANF) program, which is still in effect today. The evident flaw with TANF, as Shaefer discovered, is that the entitlements it promises are unregulated and poorly allocated. Because states are granted wide discretion of how to distribute the entitlements, the money gets redirected to various other places rather than America’s poorest.
Other means-tested income support had been growing since the 1990’s, but this increase in aid mostly benefited the working poor while they were working. Ultimately, Shaefer argued, aid became stratified, and the aid for the very poorest had shifted away from cash assistance, causing this bottom subset to be sifted out through the holes in the safety net.
While researching the book, Edin and Shaefer traveled to different cities across the country to gather poverty data first-hand – both quantitative and qualitative. Through in-person interviews they learned that people were selling their blood plasma for cash. Many were selling their plasma as often as legally permissible, causing a boom in the industry. They found the grim basis for the industry’s prosperity disturbing.
They discovered that many impoverished Americans take on quite impressive entrepreneurial attitudes out of necessity to get what they need to survive. Selling food stamps is illegal, but people will trade food stamps for other favors, such as a ride to Walmart. One woman bought cheap bulk candy and sold it out of her apartment. This is a felony, but, Shaefer noted, it is also quite innovative.
Shaefer said he and Edin became more aware of their own power and privilege as they began cultivating relationships with their interview subjects. His discomfort was overshadowed by the thought that it would be worse for the poorest of the poor if he did not write the book at all.
He also analyzed U.S. Census Bureau data to determine the growth of the virtually cashless poor since welfare reform. He combined the data with reports from the nation’s food banks and government data on families receiving food stamps, and accounts from the nation’s schools on the rising numbers of homeless children.
When asked during the Q&A session for his suggestions to alleviate the problem, Shaefer explained that the goal should be stability with a cash safety net. He cited affordable housing and subsidized job programs as two potentially impactful features of a welfare system, but both have logistical challenges. He said that it is actually easier and cheaper to just give people money.
Shaefer said that state-managed block grants like TANF do not seem to work how they are intended, and that a federalized benefits system would be ideal. A properly shaped federalized system, he explained, would be consistent across states—which is especially important for today’s highly mobile population—and it would reach those at the very bottom.
“Try to be affected, not just affect,” Shaefer said, as he urged people to interact and learn from others, as he and Edin did.
The event was sponsored by ISR Perspectives as part of its Getting to Know ISR lecture series.