Top Quotes: “Poverty, by America” — Matthew Desmond

Introduction

“More than a million of our public schoolchildren are homeless, living in motels, cars, shelters, and abandoned buildings. After arriving in prison, many incarcerated Americans suddenly find that their health improves because the conditions they faced as free (but impoverished) citizens were worse. More than 2 million Americans don’t have running water or a flushing toilet at home. West Virginians drink from polluted streams, while families on the Navajo Nation drive hours to fill water barrels.”

“Technically, a person is considered “poor” when they can’t afford life’s necessities, like food and housing. The architect of the Official Poverty Measure — the poverty line — was a bureaucrat working at the Social Security Administration named Mollie Orshansky. Orshansky figured that if poverty was fundamentally about a lack of income that could cover the basics, and if nothing was more basic than food, then you could calculate poverty with two pieces of information: the cost of food in a given year and the share of a family’s budget dedicated to it. Orshansky determined that bare-bones food expenditures accounted for roughly a third of an American family’s budget. If a family of four needed, say, $1,000 a year in 1965 to feed themselves, then any family making less than $3,000 a year (or around $27,000 at the beginning of 2022) would be considered poor because they would be devoting more than a third of their income to food, forgoing other necessities. Orshansky published her findings in January of that year, writing, “There is thus a total of 50 million persons — of whom 22 million are young children — who live within the bleak circle of poverty or at least hover around its edge.” It was a number that shocked affluent Americans.

Today’s Official Poverty Measure is still based on Orshansky’s calculation, annually updated for inflation. In 2022, the poverty line was drawn at $13,590 a year for a single person and $27,750 a year for a family of four.”

“In America’s meatpacking plants, two amputations occur each week: A band saw lops off someone’s finger or hand. Pickers in Amazon warehouses have access to vending machines dispensing free Advil and Tylenol. Slum housing spreads asthma, its mold and cockroach allergens seeping into young lungs and airways, and it poisons children with lead, causing irreversible damage to their tiny central nervous systems and brains. Poverty is the cancer that forms in the cells of those who live near petrochemical plants and waste incinerators. Roughly one in four children living in poverty have untreated cavities, which can morph into tooth decay, causing sharp pain and spreading infection to their faces and even brains. With public insurance reimbursing only a fraction of dental care costs, many families simply cannot afford regular trips to the dentist.”

“The job market asks us to start over more and more these days, as well. Half of all new positions are eliminated within the first year. Jobs that used to come with some guarantees, even union membership, have been transformed into gigs. Temp workers are not just found driving Ubers; they are in hospitals and universities and insurance companies. The manufacturing sector — still widely mistaken as the fount of good, sturdy, hard-hat jobs — now employs more than a million temp workers.”

“The Nobel laureate Angus Deaton reported in 2018 that 5.3 million Americans were “absolutely poor by global standards,” getting by on $4 a day or less. “There are millions of Americans,” Deaton wrote, “whose suffering, through material poverty and poor health, is as bad or worse than that of the people in Africa or in Asia.””

“America’s current and former prisoners are very poor. By the time they reach their mid-thirties, almost seven in ten Black men who didn’t finish high school will have spent a portion of their life in a cage.”

“Poverty measures exclude everyone in prison and jail — not to mention those housed in psych wards, halfway houses, and homeless shelters — which means there are millions more poor Americans than official statistics let on.”

“Even light brushes with law enforcement can leave people feeling reduced in stature. The political scientist Vesla Weaver has shown that those stopped (but not arrested) by the police are less likely to vote. The criminal-legal system, Weaver has written, “trains people for a distinctive and lesser kind of citizenship.””

“You may begin to believe, in the quieter moments, the lies told about you. You avoid public places — parks, beaches, shopping districts, sporting arenas — knowing they weren’t built for you. Poverty might consume your life, but it’s rarely embraced as an identity. It’s more socially acceptable today to disclose a mental illness than to tell someone you’re broke. When politicians propose antipoverty legislation, they say it will help “the middle class.” When social movement organizers mobilize for higher wages or housing justice, they announce that they are fighting on behalf of “working people” or “families” or “tenants” or “the many.” When the poor take to the streets, it’s usually not under the banner of poverty. There is no flag for poor rights, after all.

Poverty is diminished life and personhood. It changes how you think and prevents you from realizing your full potential. It shrinks the mental energy you can dedicate to decisions, forcing you to focus on the latest stressor — an overdue gas bill, a lost job — at the expense of everything else. When someone is shot dead, the children who live on that block perform much worse on cognitive tests in the days following the murder. The violence captures their minds. Time passes, and the effect fades until someone else is dropped. Poverty can cause anyone to make decisions that look ill-advised and even downright stupid to those of us unbothered by scarcity. Have you ever sat in a hospital waiting room, watching the clock and praying for good news? You are there, locked on the present emergency, next to which all other concerns and responsibilities feel (and are) trivial. That experience is something like living in poverty. Behavioral scientists Sendhil Mullainathan and Eldar Shafir call this “the bandwidth tax.” “Being poor,” they write, “reduces a person’s cognitive capacity more than going a full night without sleep.” When we are preoccupied by poverty, “we have less mind to give to the rest of life.” Poverty does not just deprive people of security and comfort; it siphons off their brainpower, too.”

“There is no metropolitan area in the United States where whites experience extreme concentrations of disadvantage, living in neighborhoods with poverty rates in excess of 40 percent…This is a big reason why the life expectancy of poor Black men in America is similar to that of men in Pakistan and Mongolia.”

“Most first-time home buyers get down-payment help from their parents. Many of those parents pitch in by refinancing their own homes, as their parents did for them after the government subsidized homeownership in white communities in the wake of World War II.”

Root Causes

“Welfare spending on programs not directly related to healthcare has increased substantially in the past four decades. If we exclude Medicaid from the calculation, we find that federal investments in means-tested programs increased by 130 percent between 1980 and 2018, from $630 to $1,448 per person. “Neoliberalism” is now part of the left’s lexicon, but I looked in vain to find it in the plain print of federal budgets, at least as far as aid to the poor was concerned. There is no evidence that the United States has become stingier over time. The opposite is true.

This makes the country’s stalled progress on poverty even more baffling. Decade after decade, the poverty rate has remained flat even as federal relief has surged. How could this be?”

“Part of the answer, I learned, lies in the fact that a fair amount of government aid earmarked for the poor never reaches them. To understand why, consider welfare. When welfare was administered through the Aid to Families with Dependent Children program, almost all of its funds were used to provide single-parent families with cash assistance. But when President Bill Clinton reformed welfare in 1996, replacing the old model with Temporary Assistance for Needy Families (TANF), he transformed the program into a block grant that gives states considerable leeway in deciding how to distribute the money. As a result, states have come up with rather creative ways to spend TANF dollars.

Nationwide, for every dollar budgeted for TANF in 2020, poor families directly received just 22 cents. Only Kentucky and the District of Columbia spent over half of their TANF funds on basic cash assistance. Of the $31.6 billion in welfare funding, just $7.1 billion was realized as dollars-in-hand relief to the poor. Where did the rest of the money go? Some of it went to helping families in other ways, such as supporting job training and offsetting childcare costs. Other TANF dollars were dedicated to funding juvenile justice administration, promoting financial literacy, and a wide assortment of other activities that had little or nothing to do with reducing poverty. Between 1999 and 2016, Oklahoma spent more than $70 million in TANF funds on the Oklahoma Marriage Initiative, providing counseling services and organizing workshops open to everyone in the state, poor or not. Arizona used welfare dollars to pay for abstinence-only sex education. Pennsylvania diverted TANF funds to anti-abortion crisis pregnancy centers. Maine used the money to support a Christian summer camp.

And then there’s Mississippi. A 389-page audit released in 2020 found that money overseen by the Mississippi Department of Human Services (DHS) and intended for the state’s poorest families was used to hire an evangelical worship singer who performed at rallies and church concerts; to purchase a Nissan Armada, Chevrolet Silverado, and Ford F-250 for the head of a local nonprofit and two of her family members; and even to pay the former NFL quarterback Brett Favre $1.1 million for speeches he never gave. (Favre later returned the money.) There’s more. DHS contractors squandered TANF dollars on college football tickets, a private school, a twelve-week fitness camp that state legislators could attend free of charge ($1.3 million), and a donation to the University of Southern Mississippi for a wellness center ($5 million).

Welfare funds also went to a ministry run by former professional wrestler Ted DiBiase — the Million Dollar Man and the author of the memoir Every Man Has His Price — for speeches and wrestling events. DiBiase’s price was $2.1 million. Brett DiBiase, the Million Dollar Man’s son, was serving as deputy administrator for Mississippi’s Department of Human Services at the time. He and five others have been indicted on fraud and embezzlement charges.

States aren’t required to spend all of their TANF dollars each year, and many don’t, carrying over the unused money into the next year. In 2020, states had in their possession almost $6 billion in unspent welfare funds. Nebraska was sitting on $91 million. Hawaii had $380 million, enough to provide every poor child in the state with $10,000. Tennessee topped the list with $790 million. That year only nine states in the Union had a higher child poverty rate than Tennessee. No state had a child poverty rate higher than Mississippi’s, at roughly 28 percent, which is also the child poverty rate of Costa Rica.

Or take Social Security Disability Insurance (SSDI), which provides a stipend to people with disabilities who contributed to Social Security during their working years. In 1996, roughly 1.28 million Americans applied for disability. By 2010, nearly 3 million people did. Demographic changes — especially population growth and aging baby boomers — seem to be behind this trend. Yet the number of new disability awards approved by the Social Security Administration did not keep pace with the steep rise in applications. Between 1996 and 2010, applications rose by 130 percent, but new awards increased by just 68 percent. Many Americans were turning to disability for help, but the government was making it harder to get. In the mid-1990s, roughly half of new disability applications were approved; today, roughly a third are.”

“He was forty-one. At that age, you need twenty Social Security credits to qualify, which equates to five years in the formal workforce. Woo had worked more than full-time for well over five years – regularly pulling double shifts working security – but not at the kind of places that took down your Social Security number. So Woo applied for the nation’s alternative disability program, Supplemental Security Income (SSI). Like SSDI, most SSI applications are rejected. I helped Woo fill out the paperwork, but his first try was batted down. Woo wasn’t surprised. “That’s how it always be,” he told me. Then he phoned a disability lawyer.

In poor communities, it is common knowledge that you must apply multiple times for disability, as if being denied over and over is part of the standard application process, and you’ll need to hire an attorney. Working on contingency, lawyers can receive up to a quarter of the back pay their clients receive for the months they waited.

As the odds of being approved for disability have narrowed over the years, applicants have increasingly turned to attorneys to argue their claims. In 2001, 179,171 payments totaling $425 million were issued to “claimant representatives,” attorneys mostly, who represented people applying for disability and other benefits. By 2019, 390,809 payments – totaling $1.2 billion — were issued.”

“I can’t get over the fact that each year, over a billion dollars of Social Security funds are spent not on getting people disability but on getting people lawyers so that they can get disability.”

“If those newcomers and their children remained poor, increased immigration could push up the poverty rate. If this were happening, states that experienced the largest influx of immigrants should have seen their poverty rates climb. Almost half of America’s foreign-born population now lives in just three states: California, Texas, and Florida. As those states took in more and more immigrants, did they become worse off? No, they did not. Between 1970 and 2019, the share of the immigrant population increased by nearly 18 percent in California, 14 percent in Texas, and 13 percent in Florida. But over that same period, California’s poverty rate increased only marginally (by 0.7 percent), while poverty fell in both Texas and Florida: by 5 and almost 4 percent, respectively. The states that have taken in the most immigrants over the past half century have not grown poorer. In the case of Texas and Florida, they have grown more prosperous.”

“Single parenthood is a major cause of poverty in America.

But why isn’t it a major cause in Ireland or Italy or Sweden? A study of eighteen rich democracies found that single mothers outside the United States were not poorer than the general population. Countries that make the deepest investments in their people, particularly through universal programs that benefit all citizens, have the lowest rates of poverty, including among households headed by single mothers. We could follow suit by investing in programs to help single parents balance work and family life, programs such as paid family leave, affordable childcare, and universal pre-K. Instead, we’ve increasingly privatized daycare and summer programming, effectively reserving these modern-day necessities for the affluent. In doing so, we’ve made it impossible for many single parents to go back to school or work full-time. Choosing to have a child outside of marriage may be an individual choice, but condemning many of those parents and their children to a life of poverty is a societal one.

In America, marriage has become something of a luxury good. It comes after a couple believes they have achieved a level of financial stability. When couples don’t reach that “marriage bar,” they tend not to tie the knot. So pointing to lower rates of marriage among the poor as the main reason for their poverty is akin to pointing to higher rates of homeownership among the affluent as the primary reason for their prosperity, confusing effect for cause. Homeownership doesn’t lead to financial stability.”

“When we extend real economic opportunities to poor Americans, marriage typically follows. Take the New Hope program, implemented in the mid-1990s in Milwaukee. This initiative gave residents from poor neighborhoods access to affordable health insurance and childcare, while also providing wage supplements to boost their incomes. Five years after New Hope launched, participants randomly selected into the program had significantly higher incomes and better jobs than those who weren’t. They were also nearly twice as likely to be married. New Hope is one of several programs that have boosted marriage rates, not by offering relationship counseling or organizing workshops — initiatives that almost never work — but by providing couples with enough economic stability to try for a life together.

But these programs are fleeting and experimental, while much of American social policy remains downright hostile to the family. The most antifamily social policies have been those fueling mass incarceration. Most people in prison are parents. Men have been taken from their families by the tens and hundreds of thousands, then by the millions. Poor Black and Hispanic families have paid the highest price. Other countries, like Germany, permit their incarcerated citizens to visit family members outside detention centers, but the American prison system seems designed to break up all sorts of relationships. By one estimate, the number of marriages in the United States would increase by as much as 30 percent if we didn’t imprison a single person.”

“Supplemental Security Income checks are docked if recipients live with relatives. A mother can lose her rental assistance or public housing unit if she allows the father of her children to live with her in violation of her lease. Households receive a higher total allotment of food stamps if romantic partners apply separately for the benefit rather than as a married couple. Then there is the Earned Income Tax Credit (EITC). Say there is a family of four, where Mom makes $30,000 a year and Dad makes $15,000. If Dad claimed the FITC benefit himself, he would receive the maximum amount ($5,920 in 2020). But if the couple married, the family would receive only around $2,000.”

“The young economist arrived at this conclusion not by relying on facts but by drawing on “hypothetical data,” a numerical story he invented to illustrate his theory. Other economists were persuaded by Stigler’s simple, elegant reasoning, and canonized it in the pas of their textbooks. The prediction that raising the minimum wage would lead to higher unemployment rates became economic orthodoxy.

And yet it remained untested for nearly fifty years. Then, in 1992, ten years after Stigler was awarded the Nobel Prize, New Jersey raised its minimum wage while neighboring Pennsylvania did not. This created a natural experiment that could be leveraged to evaluate the effect of the wage increase on jobs. To do so, David Card and Alan Krueger, both economists at Princeton, surveyed 410 fast food restaurants in each state before and after the wage hike. They found that fast food jobs in New Jersey did not decline after the state raised its minimum wage.At least in this case, Stigler was wrong. In the years since, economists have churned out hundreds of similar studies, the bulk of them supporting the main finding of Card and Krueger’s bombshell paper by showing that increasing the minimum wage has negligible effects on employment.”

“By excluding Black workers, unions prevented the American labor movement from ever realizing its full potential.

Things got worse during the painful stagflation crisis of the 1970s, when economic growth slowed but inflation did not. Unions harmed themselves through self-defeating racism and were further weakened by a changing economy. As the manufacturing sector continued to shrink, they lost their traditional power base. But organized labor was also attacked by political adversaries. As unions flagged, business interests sensed an opportunity. Corporate lobbyists made deep inroads in both parties, launching a public relations campaign that blamed labor for the slump and pressured policymakers to roll back worker protections.

A national litmus test arrived in 1981, when thirteen thousand unionized air traffic controllers left their posts after contract negotiations with the Federal Aviation Administration broke down. When workers refused to return to work, President Reagan fired all of them. The public’s response was muted, and corporate America learned that it could crush unions with minimal blowback. In 1985, Hormel Foods, of Spam and Dinty Moore beef stew fame, cut worker pay in its Austin, Minnesota, plant from $10.69 to $8.25 an hour and kneecapped the strike that followed by hiring replacements. “If the President of the United States can replace strikers, this must be socially acceptable,” remarked one observer at the time. And so it went, in one industry after another. As global trade expanded and plants shuttered, unions collapsed, and corporate interests made sure they remained weak.”

“Between 2016 and 2017, the National Labor Relations Board charged 42 percent of employers with violating federal law during union campaigns. In nearly a third of cases, this involved illegally firing workers for organizing.”

“We’ve expanded the Pell Grant program and other initiatives to bring more low-income students to college. In 1970, fewer than a third of young adults from families in the bottom 25 percent of the income distribution were enrolled in college; by 2020, roughly half were. Yet during this time, the share of decent-paying American jobs fell and the share of poverty jobs rose, especially for young people. In 2020, almost a third of full-time workers between the ages of twenty-five and sixty-four who had earned at least a bachelor’s degree made less than the national median ($59,371).

Roughly half of Americans between the ages of twenty-five and thirty-four have earned a bachelor’s degree or more, which is also the case in the Netherlands, Switzerland, France, and several other rich democracies with far less poverty. In Germany, only 35 percent of people in that age range have graduated from college, yet the child poverty rate there is half what it is here.”

“Belgium, Canada, Italy, and many other countries haven’t experienced the kind of wage stagnation and surge in income inequality that the United States has. Why? A big reason is that those countries managed to keep their unions.”

“Some countries, including the United Kingdom and the Netherlands, have classifed Uber drivers as full-time employees, which entitles them to basic protections like minimum wage and holiday pay.”

“Economists have developed a way to put a price tag on how much this costs workers. In. 2018, the median annual compensation was $30,500. In a paper published that year, researchers estimated that in a perfectly competitive market, it would be closer to $41,000 and could be as high as $92,000. These are numbers to pause over: incomes rising by at least a third, just from making markets fair. But as big corporations have gotten bigger, buying up competitors or putting them out of business, workers have fewer and fewer options. Many are vastly underpaid and don’t even realize it. Do you know who does? The bosses and investors.”

Taxes

“Our biggest antipoverty program for the working poor is the Earned Income Tax Credit. In 2021, 25 million workers and families received this subsidy, the average payment being $2,411. The EITC is one of the nation’s most enduring antipoverty programs, in large part because of its strong bipartisan backing. But perhaps the primary reason the EITC enjoys such widespread support is because it functions as a generous handout to corpor-ations. Among the loudest champions of the EITC have been multinational businesses, whose low wages are effectively subsidized through the program. Walmart has established initiatives to help their employees claim the EITC and has supported legislation that requires large employers to notify their workers about the benefit.”

“CORPORATE PROFITS RISE WHEN labor costs fall. This is why Wall Street is so quick to pummel companies when they bump up wages. When Walmart announced in 2015 that it planned to increase its starting wage to at least $9 an hour, largely in response to public pressure, investors dumped the stock. Shares fell by 10 percent, erasing $20 billion in market value. It was the company’s biggest single-day loss on record. The same thing happened in 2021. After the retailer pledged to raise its average hourly wage to $15 to compete with Amazon and other companies that had responded to the Fight for $15 campaign, shareholders bailed, causing the stock to fall 6 percent on a Thursday morning. Investors were putting Walmart, and every other publicly traded company, on notice: If you raise wages, you’ll pay for it.”

“AROUND THE TIME JULIO collapsed in the grocery store, the Emeryville City Council started to consider raising the city’s minimum wage. Oakland had just passed a ballot initiative to increase it from $9 to $12.25 an hour, and Emeryville set out to match it. Then the mayor, Ruth Atkin, began asking if her city could do more. What if they mandated a real living wage? When Julio caught wind of this possibility, he began to pray. He prayed during Sunday and Wednesday revival services, where he danced and shouted as the spirit moved him. He prayed in quiet moments at home. “God, he believes in justice,” Julio told me. “I have faith. But I also have politics.” Julio became active in the Fight for $15, participating in marches and other shows of collective strength. “The first time we did a strike, I felt very nervous,” he told me. But when he showed up in his work uniform and saw thousands of other fast food workers in theirs, he found his voice. It felt like church.

On a Tuesday night in May 2015, the Emeryville City Council voted to raise the city’s minimum wage to almost $16 an hour by 2019. In July 2022, the city’s minimum wage was set at $17.68, among the highest in the nation.”

“When poor workers receive a pay raise, their health improves dramatically. Studies have found that when minimum wages go up, rates of child neglect, underage alcohol consumption, and teen births go down. Smoking, too, decreases. Big Tobacco has long targeted low-income communities, but there is strong evidence that minimum wage increases are associated with decreased rates of smoking among low-income workers. Higher wages ease the grind of poverty, freeing people up to quit.

The chronic stress that accompanies poverty can be detected at the cellular level. One study found that up to 5,500 premature deaths that occurred in New York City from 2008 to 2012 could have been prevented if the city’s minimum wage had been $15 an hour during that time, instead of just over $7. A higher minimum wage is an antidepressant. It is a sleep aid. A stress reliever. Vocal segments of the American public, those with brain space to spare, seem to believe the poor should change their behavior to escape poverty. Get a better job. Stop having children. Make smarter financial decisions. In truth, it’s the other way around: Economic security leads to better choices.”

Housing

“We need more housing; no one can deny that. But rents have jumped even in cities with plenty of apartments to go around. At the end of 2021, almost 19 percent of rental units in Birmingham, Alabama, sat vacant, as did 12 percent of those in Syracuse, New York. Yet rent in those areas increased by roughly 14 and 8 percent, respectively, over the previous two years. The data also show that rental revenues have far outpaced property owners’ expenses in recent years, especially in multifamily properties located in poor neighborhoods. Rising rents are not simply a reflection of rising operating costs. There’s another dynamic at work, one that has to do with the fact that poor people — and particularly poor Black families — don’t have much choice when it comes to where they can live. Because of that, landlords can overcharge them, and they do.”

“Across the United States, landlords in poor neighborhoods do not just come out ahead. After accounting for all their costs, they typically enjoy profits that are double those of landlords operating in affluent communities. In the hottest housing markets in the country, this pattern reverses itself. In New York City, it’s better to be a landlord in SoHo than in the South Bronx. But New York City and other high-cost metropolitan areas are the outliers. In cities with more typical home values, like Orlando, Little Rock, or Tulsa, it is better to be a landlord in the South Bronx, so to speak — to rent out property in low-income neighborhoods. This is especially true in the cities with the lowest housing values in the nation.

Why do landlords in poor neighborhoods make more? Because their regular expenses (especially their mortgages and property tax bills) are considerably lower than those in more affluent neighborhoods, but their rents are only slightly lower.”

“A small number of these predatory landlords are responsible for a disproportionate share of our housing woes. In cities like Tucson, Arizona, and Fayetteville, North Carolina, for example, the top one hundred buildings where the most evictions occur account for 40 percent of all evictions in those cities. I’ve met landlords who have more than earned the moniker “slumlord,” but I’ve also met landlords trying their best to provide decent housing to low-income families. I’ve met small-time property owners who keep their rents low and larger operators striving for a zero-percent eviction rate by developing diversion programs.

Many property owners start investing in real estate because they don’t have enough saved for retirement or have little interest in holding down a “normal” job that comes with a boss and regular hours. When people in these situations become landlords, they transform an investment traditionally intended as a side hustle, a source of “passive income,” into their main hustle active income” that they believe should pay the bills and support them in their silver years. This overworks the asset and pressures landlords to make as much as they can, which would be far less problematic if the asset didn’t happen to be someone’s home and if raising the rent didn’t result in tenants becoming poorer. This doesn’t necessarily mean that your average landlord makes as much as, say, an accountant. But it does mean that those who try to make as much money landlording as they would make in a conventional job — or who try to reproduce the security that comes with saving for retirement for most of your adult life — by investing in rental housing can often only do so by squeezing their tenants.”

“Poor renters are also excluded from homeownership, not because they are too poor to make regular mortgage payments — if people can pay rent, they almost certainly can afford a mortgage but because several factors discourage them from even trying, I met Lakia Higbee in the fall of 2021. At that time, Lakia worked as a picker in an Amazon warehouse and lived with her two adult daughters, her sixteen-year-old son, and her two granddaughters in a four-bedroom home in Cleveland. The rent was $950 a month. Not bad, Lakia thought, even if the windows were so thin and drafty that the monthly heating bill could reach $500. But if Lakia had bought that home under conventional terms, her monthly mortgage payment would have been around $577, inclusive of property taxes and insurance fees. With an additional $373 in her pocket each month, Lakia might have been able to save enough to replace those windows.

Even if Lakia had had a decent credit score, and even if she’d managed to save enough for a down payment, her chances of securing a mortgage for an affordable home would have remained slim because banks aren’t interested in financing the kind of homes she could afford. With no access to such mortgages, poor families must pay high rents on otherwise affordable homes. In the not-so-distant past (from 1934 to 1968), banks didn’t do business in poor and Black communities because the federal government refused to insure mortgages there. Today, banks don’t do much business in these same neighborhoods because they can make more money elsewhere. Redlining may no longer be official U.S. policy, but poor and predominately Black neighborhoods, and even whole towns, continue to function as “mortgage deserts.” If millions of poor renters accept exploitative housing conditions, it’s not because they can’t afford better alternatives; it’s because they often aren’t offered any.”

Banks

“The deregulation of the banking system in the 1980s heightened competition between banks. Many responded by raising fees and requiring that customers carry minimum balances. In 1977, over a third of banks offered accounts with no service charge. By the early 1990s, only 5 percent did. Big banks grew bigger as community banks shuttered, and in 2019, the largest banks in America charged customers $11.68 billion in overdraft fees. Just 9 percent of account holders pay 84 percent of these types of fees. Who were the unlucky 9 percent? Customers who carried an average balance of less than $350. The poor were made to pay for their poverty.

In 2021, the average fee for overdrawing your account was $33.58. Because banks often issue multiple charges a day, it’s not uncommon to overdraw your account by $20 and end up paying $200 for it. Banks could (and do) deny accounts to people who have a history of overextending their money, but those customers also provide a steady revenue stream for some of the most powerful financial institutions in the world.”

“Lenders compete over things like location, store hours, and how fast they can process applications — but not cost. They know their customers are too desperate to comparison shop. This means fees stay high and borrowers get a bad deal anywhere they go. Given this, conventional banks could undercut the industry, offering short-term loans with much lower fees. By one estimate, commercial banks could offer payday loans with fees up to eight times less than the standard market price and still turn a profit. But so far, they’ve shown no interest in doing so. It’s one thing to soak low-income customers with overdraft fees because those fees apply to everybody, even if they are borne primarily by the poorest customers. But getting into the payday loan business would mean offering financial products designed specifically for a down-market clientele, loans that would come with APRs between 40 and 80 percent and serious reputational baggage. So far, the suits at JPMorgan Chase and Citigroup have decided it’s not worth it. If payday borrowers are price insensitive (as most of us are when circling the drain) and if most commercial banks maintain their lack of interest in serving the poor, then the market failures that benefit the payday lending industry will persist. Payday lenders do not charge high fees because lending to the poor is risky even after multiple extensions, most borrowers pay up. Lenders extort because they can.”

Conclusion

“A 2019 study conducted by the Federal Reserve Bank of Philadelphia found that when states raised minimum wages, families found it easier to pay rent. But landlords quickly responded to the wage bumps by increasing rents, which diluted the effect of the policy. (This happened after the COVID-19 rescue packages, too, but commentators preferred discussing the matter using the bloodless language of inflation.)”

“WHEN THE COVID-19 PANDEMIC STRUCK the United States, the economy went into a tailspin. Social distancing protocols caused businesses to shutter, and millions of Americans lost their jobs. Between February and April 2020, the unemployment rate doubled, then doubled again, rivaling levels not seen since the bread lines and banker suicides of the 1930s. During the worst week of the Great Recession of the late aughts, 661,000 Americans filed for unemployment insurance. During the week of March 16, 2020, more than 3.3 million Americans did. The country was in free-fall.

The federal government responded with bold relief. It expanded the time laid-off workers could collect unemployment, and in a rare recognition of the inadequacy of the benefit, added supplementary payments. For four months at the beginning of the pandemic, unemployed Americans received $600 a week on top of their regular stipend, nearly tripling the average amount of the benefit.

In August, the government reduced the bonuses to $300 a week. In the summer of 2021, the U.S. Chamber of Commerce estimated that one in four recipients of the expanded unemployment insurance were receiving more from being out of work than they would have if they had been working.

Because of the generous unemployment benefits — alongside stimulus checks, rental assistance, expanded Child Tax Credit, and other forms of relief — poverty did not increase during the worst economic downturn in nearly a century. Instead, it fell, and by a tremendous amount. The U.S. economy lost millions of jobs during the COVID-19 pandemic, but there were roughly 16 million fewer Americans in poverty in 2021 than in 2018. Poverty fell for all racial and ethnic groups. It fell for people who lived in cities and those who lived in rural areas. It fell for the young and old. It fell the most for children.Swift government action didn’t just prevent economic disaster; it helped to cut child poverty by more than half.”

“During June and July 2021, twenty-five states stopped some or all of the emergency benefits rolled out during the pandemic, including expanded unemployment insurance. This created an opportunity to see whether those states enjoyed a significant jump in their employment rates. It’s what you’d expect if the benefits were discouraging Americans from returning to work. But there was no jump. When the Labor Department released the August data, we learned that in the race among states for the best job numbers, it was basically a tie. The five states with the fastest job growth (Alaska, Hawaii, North Carolina, Rhode Island, and Vermont) had retained some or all of the benefits. States that had cut unemployment benefits did not experience significant job growth. What they did experience was a decline in consumer spending, since the cuts left their citizens with less money, which slowed local economies.

Other studies found no evidence that unemployment benefits were causing workers to stay home, and at the time several European countries were also experiencing labor shortages even though they hadn’t done much to expand unemployment benefits.”

“Big money required big government. But big government could also hand out bread. Realizing this, early capitalists decried the corrosive effects of government aid long before it was extended to the so-called able-bodied poor. In 1704, the English writer Daniel Defoe published a pamphlet arguing that the poor would not work for wages if they were given alms. This argument was repeated over and again by leading thinkers, including Thomas Malthus in his famous 1798 treatise, An Essay on the Principle of Population. Early converts to capitalism saw poor aid not merely as a burden or as bad policy but as an existential threat, something that could sever the reliance of workers on owners.

Fast-forward to the modern era, and you still hear the same neurotic arguments. The idea is to protect one kind of dependency, that of the worker on the company, by debasing another, that of citizens on the state. (An irony of capitalism is that work, which early Americans rejected as a barrier to independence — “wage slavery,” they called it — is now seen as our only means of acquiring it.)”

“The BLS also found that families with incomes in the top 20 percent of the distribution dedicate twice as much of their budget to alcohol as families with incomes in the bottom 20 percent.”

“When I lived in poor Milwaukee communities, one thing that struck me about the people I met — people often enduring grinding hardship, even homelessness — was how few of them took the edge off their pain with anything more than a cigarette. I did get to know people addicted to heroin, and there were plenty of liquor stores around, but most of my neighbors faced their poverty dead sober. Honestly, it was disappointing. I wanted to take the edge off, and when I did, with a beer or a glass of whiskey, my friends in Milwaukee did not approve. “I didn’t know you drank,” Crystal once scolded me after i stopped by a liquor store to pick up a six-pack. I looked at everyone else in the car: Crystal, along with her friend Vanetta, whom Crystal had met at the Salvation Army homeless shelter, and Vanetta’s mother, who had raised her kids in Chicago public housing. We were planning on cooking a Sunday meal together.

“Um, can I get anyone anything?” I asked.

Everyone shook their heads no. None of them drank. They wouldn’t have even known what to ask for. I bought my beer, feeling like I had scandalized our supper.”

““The welfare system does not foster reliance on welfare so much as it acts as insurance against temporary misfortune.”Today as then, the able-bodied jobless adult on welfare remains a rare creature. According to one study, only three in one hundred poor people in America are working-age adults disconnected from the labor market for unknown reasons.

If you dig into the data, you quickly realize that the problem isn’t welfare dependency but welfare avoidance. Simply put, many poor families don’t take advantage of aid that’s available to them. Only a quarter of families who qualify for Temporary Assistance for Needy Families apply for it. Less than half (48 percent) of elderly Americans who qualify for food stamps sign up to receive them. One in five parents eligible for government health insurance (in the form of Medicaid and the Children’s Health Insurance Program) do not enroll, just as one in five workers who qualify for the Earned Income Tax Credit do not claim it. Welfare avoidance persists through bumper years and downturns. At the height of the Great Reces-sion, one in ten Americans was out of work, but only one in three drew unemployment.”

“This is decidedly not a picture of welfare dependency. If poor people in America really knew how to pull every nickel and dime they could from the system, why do they pass on billions of dollars in aid every year? When politicians and pundits fume about long-term welfare addiction among the poor, or the social safety net functioning like “a hammock that lulls able-bodied people into lives of dependency and complacency,” to quote former Republican congressman Paul Ryan, they are either deeply misinformed, or they are lying. The American poor are terrible at being welfare dependent. I wish they were better at it, just as I wish that we as a nation devoted the same amount of thoughtfulness, creativity, and tenacity to connecting poor families with programs that would alleviate their hunger and ease their hardships as multinational corporations devote to convincing us to buy their potato chips and car tires.”

“Altogether, the United States spent $1.8 trillion on tax breaks in 2021. That amount exceeded total spending on law enforcement, education, housing, healthcare, diplomacy, and everything else that makes up our discretionary budget. Roughly half the benefits of the thirteen largest individual tax breaks accrue to the richest families, those with incomes that put them in the top 20 percent. The top 1 percent of income earners take home more than all middle-class families and double that of families in the bottom 20 percent. I can’t tell you how many times someone has informed me that we should reduce military spending and redirect the savings to the poor. When this suggestion is made in a public venue, it always garners applause. I’ve met far fewer people who have suggested we boost aid to the poor by reducing tax breaks that mostly benefit the upper class, even though we spend over twice as much on them as on the military and national defense.”

“As I see it, there are three possibilities. The first is that many of us understandably have a hard time viewing a tax break as something akin to a government check. We see taxation as a burden and tax breaks as the state allowing us to keep more of what is rightfully ours. Psychologists have shown that we tend to feel losses more acutely than gains. The pain of losing $1,000 is stronger than the satisfaction of winning that amount. It’s no different with taxes. We’re apt to think much more about the taxes we have to pay (the loss) than about the money delivered to us through tax breaks (the gain).

This is by design, the result of the United States intentionally making tax filing exasperating and time-consuming. In Japan, Great Britain, Estonia, the Netherlands, and several other countries, citizens don’t file taxes; the government does it automatically. In those countries, taxpayers check the government’s math, sign the form, and mail it back in. The process can be completed in a matter of minutes, and more important, it better ensures that citizens pay the taxes they owe and receive the benefits owed to them. If Japanese or Dutch taxpayers believe their government has overcharged them, they can appeal their bill, but most don’t. There’s no reason Americans’ taxes couldn’t be collected this way, except for the fact that corporate lobbyists and many Republican lawmakers want the process to be painful. “Taxes should hurt,” President Reagan famously said. If they don’t, we might come to see taxpaying as a normal and straightforward part of membership in society, instead of what happens that irksome time of year when the government takes our money.”

“The average middle-class family received $7,100 more in government aid than it paid in federal taxes, a serious return on investment. The claim that middle-class Americans are subsidizing the poor with their tax dollars and receiving nothing in return just isn’t true.”

“The most recent data compiling spending on social insurance, means-tested programs, tax benefits, and financial aid for higher education show that the average household in the bottom 20 percent of the income distribution receives roughly $25,733 in government benefits a year, while the average household in the top 20 percent receives about $35,363. Every year, the richest American families receive almost 40 percent more in government subsidies than the poorest American families.”

“These old tropes and stereotypes are dying. We’ve seen through them. Most Democrats and most Republicans today believe that poverty is caused by unfair circumstances, not by a lack of work ethic.”

“You could fit three newly built English homes into the average new American home.”

“In 1955, government spending accounted for roughly 22 percent of the economy, and it stayed that way for years. But during the last quarter of the twentieth century, public investments began to decline. By 2021, government spending on all public goods — including national defense, transportation, health expenditures, and programs to ease the pain of poverty made up just 17.6 percent of GDP. Meanwhile, personal consumption grew from about 60 percent of GDP to 69 percent over that same period. A 9 percentage point increase might not look like much, but in 2021 that amounted to more than $2 trillion.

What happened? A major driver of this trend was the biggest tax cut in U.S. history. The Economic Recovery Tax Act of 1981, proposed by Congressman Jack Kemp and signed into law by President Reagan, reduced federal tax revenues by more than 13 percent over four years. The act included across-the-board cuts to income taxes, including a 20 percentage point reduction in the top marginal tax rate, and slashed estate taxes as well. Republican overexuberance rocked the economy. In the immediate aftermath of this legislation, the deficit began to expand, interest rates climbed, and markets flagged. Reagan was forced to right the ship, somewhat, by raising taxes om businesses the following year. But it was the public sector that paid the biggest price for the president’s budgetary reprioritization. Reagan reduced funding for the Department of Housing and Urban Development, not by 20 or 40 percent, but by almost 70 percent. The agency whose budget was once second only to the Department of Defense, the agency that had replaced slums with (once) safe and dependable housing, soon couldn’t pay for its buildings’ trash collection or elevator repair.

Tax cuts are one of the main engines of private opulence and public squalor, and in recent decades we have grown used to the Republican Party delivering them But this is a recent trend — President Kennedy cut taxes Nixon and Ford raised them and if the modern fight from public investments can be said to have started any where, it started in a state that had elected a Democratic governor and a Democratic legislature: California. That’s where a full-blown tax revolt broke out in the 1970, amid rising inflation and property taxes. Proposition 13, which capped property taxes at 1 percent of a property’s assessed value and froze that value at the property’s original purchase price, passed with 65 percent of the vote. Democrats and Republicans voted for it, rich and middle class homeowners, too. The law boosted private fortunes and gutted public services. If property owners won, public school kids lost. California was forced to cancel summer school, which the state hadn’t done since the Great Depression, and dropped from first in the nation in education funding to ninth from the bottom.

The passage of Proposition 13 inspired a nationwide revolt that led to Reagan’s 1981 cutting spree. It was a white-led revolt. (The only two groups who had opposed Proposition 13 were public sector employees and African Americans.) Massive tax cuts, which fundamentally reshaped the agendas of the nation’s two major political parties and resulted in the rise of private fortunes alongside public poverty, were not simply a response to government overreach. They were a response to white people being ordered to share public goods with Black people.”

““In the end,” writes historian Kevin Kruse, “court-ordered desegregation of public spaces brought about not actual racial integration, but instead a new division in which the public world was increasingly abandoned to Blacks and a new private one was created for whites.” When public schools were ordered to integrate, white parents first protested, then either retreated into private schools or decamped to the suburbs, in major cities, public schools lost nearly all their white students. For example, by the early aughts most of Atlanta’s public schools had less than three white students. In 2022, 16 percent of Atlanta’s public school students were white, in a city with a 38 percent white population.”

“American cities had zoning ordinances in the 1920s, but they tended to be the general kind that organized the urban landscape – build your factory here, the shops go there, the people live here – not the kind we have today, which ban certain kinds of residences from residential space. Exclusionary zoning ordinances of that sort began appearing in response to the Great Migration. As millions of Black families fled racial terrorism in the South, the cities to which they moved began erecting walls between Black and white neighborhoods via zoning ordinances. After the U.S. Supreme Court outlawed explicit racial segregation in zoning, Atlanta changed its two residential zones from “R-1 white district” and “R-2 colored district” to “R-1 dwelling house district” and “R-2 apartment house district.” Exclusionary zoning laws metastasized across the nation after Congress passed federal legislation abolishing housing discrimination in 1968. We went from banning certain kinds of people from our communities to banning the kinds of housing in which those people lived – namely, apartment buildings designed for multiple families – achieving the same ends.

Today, many American cities remain in large part “R-1 dwelling house districts.” As The New York Times put it in 2019: “It is illegal on 75 percent of the residential land in many American cities to build anything other than a detached single-family home.” A 2021 study of one hundred large cities found that the median central city permitted apartment dwellers to live on only 12 percent of its residential land. This is a distinctly American approach to city planning. Greece and Bulgaria don’t distinguish between single-family and multifamily housing in their zoning laws, for example, while Germany has outwardly acknowledged the benefits of integrating different housing types in the same neighborhood.”

“If the answer isn’t stigma, what is going on? The bulk of the evidence indicates that low-income Americans are not taking full advantage of government programs for a much more banal reason: We’ve made it hard and confusing. People often don’t know about aid designated for them or are burdened by the application process. When it comes to increasing enrollment in social programs, the most successful behavioral adjustments have been those that simply raised awareness and cut through red tape and hassle.

A little can go a long way. One intervention tripled the rate of elderly people enrolled in food stamps by providing information about the program and offering sign-up assistance. Elderly households received a letter informing them they could apply for food stamps along with a number to call. Those who dialed the number were connected to a benefits specialist who helped callers fill out the application and collect the necessary documentation. Again, this nothing-to-it intervention tripled enrollment. Another initiative significantly increased the number of workers who claimed the Earned Income Tax Credit just by sending out mailers, reducing the amount of text on the application, and using a more readable font. No kidding: Using Frutiger font – that sturdy, confident typeface adorning Swiss road signs and prescription labels – helped bring millions of more dollars to low-income working families.”

“BUT LET’S REACH FOR something more. How much would it cost to end poverty not to reduce it by 10 percent or even cut it in half, but to abolish it entirely? In 2020, the gap separating everyone in America below the poverty line and the poverty line itself amounted to $177 billion. I arrived at this rough estimate by multiplying the number of families and individuals below the line with the average amount they would need to rise above it. Now, this figure is on top of current welfare spending, and it doesn’t account for either the administrative costs of delivering aid (which would raise the estimate) or gains made by addressing issues like labor and housing exploitation (which would lower it). Really nailing down the cost of ensuring that every American enjoys a decent level of economic security would take a lot more calculating. But $177 billion is a good place to start. It helps us begin to understand what we’re talking about when we talk about ending poverty in America. And what we’re talking about is a goal that is irresistibly attainable. One hundred and seventy-seven billion dollars is less than 1 percent of our GDP. Americans throw away more than that amount in food every year.

What could $177 billion buy? Quite a lot. We could ensure that every person in America had a safer and more affordable place to live. Every single one of us. We could put a real dent in ending homelessness in America, and we could end hunger. We could provide every child with a fairer shot at security and success. We could make immense headway in driving down the many agonizing correlates of poverty, like violence, sickness, and despair. Crime rates would plummet. Eviction rates, too. Neighborhoods would stabilize and come alive. Schools could focus more on education instead of dedicating so many resources to triaging the deep needs of their students.

Where would the money come from? The best place to start, in my view, is with the cheaters. The IRS now estimates that the United States loses more than $1 trillion a year in unpaid taxes, most of it owing to tax avoidance by multinational corporations and wealthy families. Congress hasn’t given the agency the resources it needs to hunt down tax criminals, leaving the IRS outgunned and outmatched.”

“They defraud the American public, forcing everyone else to pay for their greed. Congress should crack down on such corruption, writing the IRS a blank check to go after tax cheats, and it should pass legislation mandating that corporations pay a minimum tax on their profits – say, 25 percent – no matter what country they’re registered in.

Income inequality has endowed rich families with more political power, which they have used to campaign for lower taxes, which in turn boosts their economic and political power even more, locking in an undemocratic and unjust cycle. We need to interrupt that cycle, which is why I also support increasing the top marginal tax rate and the corporate tax rate. Since 1962, the effective tax rate for poor, working-class, and middle-class Americans has increased, while it has decreased for the top 10 percent of income earners, and particularly for the richest among us. This is absurd. We should bump up the top marginal tax rate – perhaps to 50 percent, as it was in 1986; or 70 percent, as it was in 1975 – and expand our tax brackets so that an investment banker’s income is taxed differently than a dentist’s. Meanwhile, at 21 percent, the corporate tax rate in America is the lowest it’s been in more than eighty years. We could fund a good deal of antipoverty initiatives by increasing it to 35 percent, as it was from 1993 through 2017, or to 46 percent, as it was from 1979 through 1986.

Some claim that such proposals would hamstring the economy by disincentivizing innovation and entrepreneurship. But no serious social scientist believes that the economy slows down when we reasonably increase taxes on the rich or on multinational corporations. There were go-getters aplenty in past decades, when top tax rates were much higher, while in recent years productivity has declined right alongside taxes on wealthy individuals and companies. Commentators have taken to describing today’s America as having entered “The Age of Decadence” or “A Dark Age of Invention and Innovation,” a time of stagnation and slowdown. Since the rich haven’t given the country all that economic dynamism they promised when we cut their taxes, they can at least put in more for public investments.

Would those wealthy Americans respond by picking up the phone and dialing their lawyers and accountants? Sure. Would they adjust their investment strategies to minimize the damage? Of course. But – so what? I’ve never understood the fatalistic criticisms that swat away calls for tax fairness because implementing it would be a challenge.”

“What is maddening about this debate is not how difficult fair-tax implementation would be but how utterly easy it is to find enough money to defeat poverty by closing nonsensical tax loopholes. If you don’t like the changes I suggested above, I can propose twenty smaller reforms, or fifty tinier ones, or a hundred even more innocuous nudges to get us there. We could raise $25 billion by winding down the mortgage interest deduction, which disproportionately benefits high-income families and does nothing to promote homeownership. We could find $64.7 billion by increasing the maximum taxable amount of earnings for Social Security so that high- and low-income workers are taxed at the same rate. We could scratch out another $37.3 billion if we treated capital gains and dividends for wealthy Americans the same way we treat income for tax purposes.”

“REFASHIONING THE AMERICAN WELFARE state to support an aggressive, uncompromising antipoverty agenda could take many forms. We could significantly expand the Child Tax Credit to poor, working-class, and middle-class families, a program that functions like guaranteed income to households with kids. We could finally confront the affordable housing crisis, which has devastated the poor and dashed the hopes of countless young people shut out of homeownership, by investing in new construction and public housing. We could make deeper investments in public education and childcare and transportation infrastructure.”

“After the Great Recession that began in 2008, families in the bottom half of the income distribution had to wait nearly ten years before their incomes returned to pre-recession levels. After the COVID-19-induced recession, they waited just a year and a half. Government aid played a major role in the recovery.

It is worth recognizing how consequential the anti-poverty policies passed during the pandemic truly were. Consider just one: Emergency Rental Assistance (ERA). When COVID-19 spread across the United States, it triggered a national eviction crisis, which eventually led to the passage of a federal eviction moratorium. But everyone knew the moratorium wouldn’t last forever, which raised the question: When the bill eventually comes due, what will happen to all those families who have fallen months behind in rent? The National Low Income Housing Coalition, along with dozens of like-minded organizations across the country, demanded action, and the federal government responded with $46.5 billion in rental assistance. This amounted to a colossal investment in housing stability, one that exceeded the entire budget of the Department of Housing and Urban Development in 2020. To make sure funds ended up in the right hands, distribution channels had to be created from scratch in every community in America. Some states (Texas, Virginia) established these channels quickly; others (Ohio, Georgia) did not. As a result, the initial rollout of the ERA program was disappointing. Journalists criticized the “slow-as-molasses distribution” and declared that “the rent help is too damn slow.”

But then, thanks to the hard work of community organizers, heroic government bureaucrats, and housing advocates around the country, the distribution channels opened, and funds started flowing, eventually reaching millions of renting families. As a result, eviction filings remained well below historical levels months after the eviction moratorium ended, even as rent and inflation rose. In December 2021, eviction filings were down 39 percent in Minneapolis, 53 percent in Albuquerque, and 64 percent in Austin. This was astonishing. The Emergency Rental Assistance program, in tandem with other pandemic aid like the expanded Child Tax Credit, had cut the eviction filing rate in half in city after city across the United States. Eviction rates were lower than they had ever been on record.

It was a real win. I thought the bureaucrats who had overseen the Emergency Rental Assistance program deserved a parade. They had to settle for scattered applause.

When the ERA program was sputtering in the unsteady early days, it seemed that everyone was writing and tweeting about it. Later, when the rollout was working, it was ignored. Because journalists and pundits and social influencers did not celebrate the program, ERA garnered few champions in Washington. Elected leaders learned that they could direct serious federal resources to fighting evictions, make a real dent in the problem, and reap little credit for it. So, the Emergency Rental Assistance program became a temporary program, and we returned to normal, to a society where seven eviction filings are issued every minute.”

“The War on Poverty and the Great Society constituted a bundle of domestic programs that included the Food Stamp Act, which made food aid permanent; the Economic Opportunity Act, which created Job Corps and Head Start; and the Social Security Amendments of 1965, which founded Medicare and Medicaid and expanded Social Security benefits. Nearly two hundred pieces of legislation were signed into law in Johnson’s first five years in office, a breathtaking level of activity. And the result? Ten years after the first of these programs were rolled out in 1964, the share of Americans living in poverty was half what it was in 1960.”

“Most states still allow restaurant and other service workers to be paid a subminimum wage, which is a meager $2.13 an hour at the federal level, forcing nearly 5 million workers to survive on tips. (Where did the concept of sub-minimum wage come from? It’s a vestige of slavery. After emancipation, restaurant owners hired formerly enslaved Black workers for free. They had to rely on customers’ charity.) This is indefensible.”

“least eighty countries with minimum wage standards mandate that officials revisit them every year or so, but not us. The United States should require periodic (and humane) reviews of the minimum wage. It should also follow the lead of more than 100 countries that empower the central government or an official (like the secretary of labor) to raise the minimum wage after consulting with businesses and worker organizations or, better yet, allow minimum wages to be set through collective bargaining agreements between workers and employers. This would allow basic pay to increase in a timely fashion, not whenever Congress got around to it.”

“Many new labor movements are trying to organize entire sectors instead. The Fight for $15 campaign, led by the Service Employees International Union (SEI), hasn’t focused on a single franchise (a specific McDonald’s store) or even a single company (McDonald’s) but has brought together workers from several fast food chains. In Seattle, New York City, and elsewhere, these workers successfully pressured elected officials to raise wages for all workers in their cities. Here is a new kind of labor power, one that strives to organize whole regions, and one that could be expanded: If enough workers in a specific economic sector — retail, hotel services, nursing — voted for the measure, the secretary of labor could establish a bargaining panel made up of representatives elected by the workers. The panel could negotiate with companies to secure the best terms for workers across the industry. This is a way to organize all Amazon warehouses and all Starbucks locations in a single go, and it’s a way to empower all those independent contractors at Meta and Apple, too.

Sectoral bargaining, as it’s called, would impact tens of millions of Americans who have never benefitted from a union of their own, just as it has improved the lives of workers in Europe and Latin America. In Austria, for example, sector-by-sector collective bargaining established a countrywide minimum monthly wage of €1,500 in 2017. Sectoral bargaining would even the playing field, not only between workers and bosses, but also between companies within the same sector that would no longer be locked into a race to the bottom, incentivized to shortchange their workforce to gain a competitive edge. Instead, the companies would be forced to compete over the quality of the goods and services they offer.”

“The problem is that banks have shown little interest in financing affordable homes. That year, roughly 27 percent of homes — 2.1 million — were bought for less than $100,000, but only 23 percent of those homes were purchased with a mortgage. The rest were bought with cash by speculators and landlords. Paving the way for more renters to become homeowners would not only drastically lower housing costs; it could also provide a means of building wealth. This would be a step toward repairing historical injustices that excluded Black Americans from homeownership opportunities, particularly through redlining.

Banks generally avoid issuing small-dollar mortgages, not because they’re riskier — these mortgages have the same delinquency rates as larger mortgages — but because they’re less profitable. There are fixed costs to initiating any mortgage, large or small, so from a bank’s perspective, it makes the most sense to approve applications for expensive homes and deny applications for affordable ones. Over the life of a mortgage, interest on $1 million brings in a lot more coin than interest on $75,000. This is where the government could step in, providing extra financing to build on-ramps to first-time homeownership.

In fact, it already does so in rural America through the 502 Direct Loan Program, which has moved over 2 million families into their own homes. These loans, fully guaranteed and serviced by the USDA, come with low interest rates and, for very poor families, cover the entire cost of the mortgage, nullifying the need for a down payment. Families can also apply for low-interest loans or grants to help with repairs. In 2021, the average 502 Direct Loan was for $187,181 but cost the government only $10,370 in total, chump change for such a durable intervention. Expanding this program into urban communities would provide even more low- and moderate-income families with homes of their own.

If we want to imagine a post-poverty world, I find it instructive to pay attention to people who are already bringing it into being. A few years ago, I began spending time with Inquilinxs Unidxs por Justicia (United Renters for Justice), a tenants’ rights organization in Minneapolis that goes by the abbreviation IX. The organization was made up of security guards, store clerks, night-shift custodians, immigrants, and young people. The members of IX didn’t want to live in public housing or subsidized apartments. They didn’t even want to own their own homes. What they wanted was to buy their apartment buildings from their landlord and turn them into a tenant-owned co-operative.

“Commoning” is the term for the creation of homes that are collectively owned and controlled by the residents. There is a long tradition of this in urban America. Starting in the late 1960s, poor New Yorkers began rehabilitating apartment buildings abandoned by landlords, many damaged by fire and years of neglect. You could earn a spot through “sweat equity,” pitching in with time and labor. The city got behind these efforts, transferring the titles of dozens of buildings to tenant organizations that created co-ops. Between late 1979 and late 1980, tenants led primarily by Black women created seventeen cooperatives in the nation’s capital, comprising one thousand units, buying run-down properties and sprucing them up themselves. A popular version of this model involves residents purchasing co-op shares and paying low monthly fees to cover the building’s upkeep. If a family moves out, it can sell its share for slightly above the original purchase price, but only slightly. Bidding up the sale, even if there are plenty of takers, is seen as anathema to the co-op’s social mission.

The tenants in Minneapolis found their landlord to be neglectful — leaks were addressed with buckets, not patches; broken windows stayed broken — and began mobilizing against him. They banded together and convinced the city council to revoke the landlord’s license, stripping him of his ability to collect rent. So, the tenants stopped paying it. He responded with eviction notices. IX members marched and protested, showing up at the landlord’s house and even his church. They began raising money from local foundations and working with the Land Bank Twin Cities, a collection of real estate investors whose goal is not to maximize profit but to preserve affordable housing.

The final days of negotiation between the landlord and the IX tenants were intense, the outcome far from certain. The tenants had raised enough money to purchase their apartment buildings at a fair market price, but the landlord seemed intent on kicking everyone out.”

“Two months later, after years of struggle, the landlord finally agreed to sell five apartment buildings for around $7 million to Land Bank Twin Cities, which would sell the buildings back to the tenants at no interest. The tenants named their cooperative the Sky Without Limits Community.

Today, all five buildings are nearly filled to capacity, and maintenance calls get returned. Not everything is perfect — the hot water doesn’t last long enough; the roof is still in rough shape — but their housing costs have dropped. Monthly rents in the cooperative fell by $100, even as rents nationwide were surging. Supporting tenant rights organizations like IX, both directly and by increasing funding to civic-minded land banks, is yet another way to fight exploitation in the rental market.”

“States should rein in payday lending institutions, For one, they should insist that lenders make it crystal clear to potential borrowers what a loan is likely to cost them, just as fast food restaurants must now publish calorie counts next to their burgers and shakes, payday loan stores should publish the average overall cost of different loans. When Texas adopted disclosure rules mandating that potential borrowers be shown payday loan costs compared to other forms of credit, residents took out considerably fewer bad loans. If Texas can do this, why not California or Wisconsin?”

“In 2010, Delaware had the highest rate of unintended pregnancies in the country (57 percent). A collaboration between the state government and a nonprofit called Upstream USA sought to change that. Launched in 2014, their initiative, Delaware Contraceptive Access Now (Delaware CAN), set out to ensure that women of childbearing age could obtain the birth control method that best fit their needs. The approach was deceptively simple. When women saw a nurse or doctor, they were asked, in addition to the usual screening questions, “Do you want to get pregnant in the next year?” When women said no, health practitioners were enlisted to make sure they got the birth control of their choice before leaving. Women came for annual checkups and left with IUDs or pills — or nothing, if that was their preference.

The intervention worked. One evaluation credited the program for bringing about a 24 percent decline in unintended pregnancies among low-income and uninsured women between 2014 and 2017. When Delaware’s healthcare workers made multiple kinds of birth control available to women, regardless of their income or insurance status, the women took them up on it. This approach could, and should, be replicated nationwide, providing all women with more power over when, how, and with whom to start a family.”

“The best evidence we have about the economic consequences of denying women abortions comes from the Turnaway Study, conducted by a team of researchers at the University of California, San Francisco. The study followed roughly one thousand women who had attempted to receive abortions at clinics across the country. Researchers compared women who were able to have abortions because they sought care just before the gestational deadline (typically ten weeks to the end of the second trimester, depending on the state) to those who were turned away because their pregnancy had advanced just beyond the deadline.

The study’s design was groundbreaking and rigorous, and its findings were as unequivocal as they were unsettling. Compared to women who had had abortions, those forced to give birth were more likely to live below the poverty line four years later. The two groups of women were on similar paths at the time they got pregnant, but access to abortion caused their lives to diverge. Months and even years after receiving that consequential yes or no during their ultrasounds, women turned away at abortion clinics were less likely to hold down full-time jobs, less likely to be able to afford necessities, and more likely to be trapped in abusive relationships. Their children suffered, too. Many women who received abortions went on to have children later. When researchers compared those children to children born after women were denied abortions, they found that children in the latter group were far more likely to grow up poor.”

“Ryan also asked the women he saw: Medicaid can be used to pay for an abortion in the case of rape or incest. Does this situation apply to you? He estimated that 15 to 20 percent of the women he interviews say yes.”

“We can vote with our wallets, reevaluating where we shop and what we buy. To the greatest extent possible, we should withdraw our support from corporations that exploit their workers. This requires doing our homework, looking into a company’s track record. Trying to mail a package? UPS drivers are unionized, but FedEx drivers are not. Need a drink? Rolling Rock and Miller are union-made. Want some candy? The people who make jolly Ranchers are unionized. Increasingly, American consumers are considering the environmental impact of their purchases. We should consider their poverty impact, too.”

“I would love to see companies market their anti-poverty policies — collective bargaining agreements, a commitment to paying a living wage — just as they have promoted their commitment to climate justice and sustainability. Snapple has announced that its bottles are composed of 100 percent recycled plastic. I’d also like the company to tell us if they are union made. Most Americans approve of labor unions; so why not market them? It’s now common for local businesses to hang trans rights flags or Black Lives Matter signs in their store windows. How about also posting starting wages? Platforms such as DoneGood and Buycott steer customers toward businesses fairly compensating their workers. The nonprofit organization B Lab certifies companies that meet high social and environmental standards, scoring on the basis of worker compensation and benefits, job flexibility, potential for worker ownership, and a host of other criteria. If given the choice between a company that is B Lab certified and one that is not, let’s choose the businesses that are doing right by their workers and the planet.”

“In the years following the 1954 decision, desegregation orders were evenly enforced throughout the nation, allowing social cientists to compare Black children who went to integrated schools with those who attended segregated ones. The economist Rucker Johnson did just that, finding that Black children who were enrolled in integrated schools performed better in the classroom, graduated at higher rates, and were more likely to go to college than their peers who experienced a segregated education. These educational gains had a real cash value, as Johnson’s models showed that Black students who benefitted from court-ordered integration were significantly less likely to experience poverty as adults. Meanwhile, white children whose schools desegregated remained on track: Their academic achievement and later-life well-being did not suffer as a result of their new Black classmates.

Increasing inequality has led to a rise in income segregation among school districts. Policymakers have passed education finance reforms that have helped to balance the scales, devoting more money to poorer schools. That’s helped, but it’s clearly not the solution. Consider what happened in Montgomery County, Maryland. In the early aughts, the housing authority there randomly assigned families to different public housing units, some of which were located in affluent neighborhoods with affluent schools. At the same time, the county made serious investments in its poorest schools, dedicating real money to pay for things like smaller class sizes and teacher training. This presented researchers with a chance to determine whether poor students fared better in low-poverty schools or in high-poverty schools with more resources.

The results were striking. Students from poor families who attended low-poverty schools significantly outperformed those who attended high-poverty schools with “state-of-the-art educational interventions.” Even when we expand the budgets of poor schools beyond those of rich ones, it does not make those schools anything close to equal.”

“Inclusionary zoning isn’t just the passive absence of exclusionary ordinances but the proactive, insistent opposite of them. While exclusionary zoning makes it illegal to develop affordable housing, inclusionary zoning makes it illegal not to. That’s the stronger version anyway, mandating that new developments set aside a percentage of their units for low-income families. The weaker version is voluntary, providing developers with incentives if they include affordable housing in their blueprints, usually in the form of tax relief or a “density bonus” that allows them to build more. A developer typically allowed to construct, say, a fifty-unit complex might be permitted to erect one with seventy-five units if she agrees to offer 15 percent of her apartments at below-market rates.

Countries like Ireland and Spain have mandated inclusionary zoning as a solution to housing shortages. In the United States, the state leading the way on this is New Jersey. Nearly every suburban jurisdiction in the state has affordable housing. Why? Because in a series of landmark decisions, the New Jersey Supreme Court not only prohibited exclusionary zoning but also required all municipalities to provide their “fair share” of affordable housing, the fair share being calculated by the demographics of each town. If municipalities fail to do their part, courts can make them, redrawing the lines of a town’s zoning map to allow affordable housing projects to move forward. Republican and Democratic jurisdictions have put up a fight, but the law’s strong mandate has forced more than 340 towns to break ground on affordable housing developments. Once those plans are inked, it doesn’t take long for developers to bid on the job because they can make more money on multifamily complexes than stand-alone homes, even when they rent out a share of their units to low-income families. This strategy has allowed New Jersey to create thousands of affordable units without a dime of state or federal money.

Do affordable housing developments cause property values to decline? If they are built poorly and not maintained, then yes, just as any kind of neglected housing would. But studies have found that when affordable housing blends into the surrounding community, and when it is well managed and well distributed instead of being clustered in one place, it has zero effect on property values. (In the years since New Jersey began economically integrating its communities more aggressively than any other state, its property values have remained among the highest in the nation, and it ranks first in public education.) Congress could incentivize more communities to invest in affordable housing with federal dollars that could be used to offset local property taxes or improve public services. What if homeowners enjoyed a bit more money in their pockets if they voted yes on affordable housing? What if the local elementary school was able to rehab its gymnasium or hire more teachers if its community welcomed more low-income families?

Carrots like this could be used to entice more communities to share prosperity. Sticks could work, too. If localities refused to end exclusionary zoning, Congress could cut off their funding. Right now, whenever an exclusionary town or neighborhood receives federal dollars to repair sidewalks or update sewer systems or construct a public park, low-income taxpayers fund improvements in places actively rejecting them. Congress could end this.”

“This wasn’t my idea, by the way. It was George Romney’s. The Republican politician and father of Utah senator Mitt Romney proposed it in 1970 when he was Nixon’s secretary of the Department of Housing and Urban Development. Romney wanted the U.S. government to finally stop subsidizing segregation. His idea so enraged white suburbanites that Nixon smothered it and eventually forced Romney out of office. Those white suburbanites picked up the phone. They showed up to political rallies, wrote letters.”

“Poverty abolitionists seeking a different kind of community, a more open, inclusive community, need to start showing up at Tuesday evening planning board sessions. We need to rise from our seats and tell our local officials: This community’s long-standing tradition of segregation stops with me. I refuse to deny other children opportunities my children enjoy by living here. Build it.”

“A 2019 study published in The Quarterly Journal of Economics found that children from rich families were ten times as likely to become inventors than children from families in the bottom half of the income distribution. The researchers attributed this gap to environmental factors, not to differences in innate abilities, by showing that young children from low-income families who scored high in math, which turns out to be very predictive of inventing something later in life, were still much less likely to become inventors than wealthier children with similar math scores.”

“Poverty will be abolished in America only when a mass movement demands it so. And today, such a movement stirs. American labor is once again on the move, growing more boisterous and feistier by the day, organizing workplaces once thought untouchable. A renewed movement for housing justice is gaining steam. In a resurgence of tenant power, renters have formed eviction blockades and chained themselves to the entrances of housing court, meeting the violence of displacement with a force of their own. The Poor People’s Campaign has elevated the voices of low-income Americans around the country, voices challenging “the lie of scarcity in the midst of abundance” and mobilizing for things like educational equity and a reinvestment in public housing. They march under different banners — workers’ unions and tenants’ unions; movements for racial justice and economic justice — but they share a commitment to ending poverty in America.

All of us can learn from, support, and join movements led by those who have intimate knowledge of poverty’s many slights and humiliations: attending meetings, signing petitions, donating time and money, amplifying social media messages, working the phone banks, adding our voices to public protests, and running supplies to the picket line.

“Get into relationship.” That’s the clear advice of Deepak Bhargava, former president and executive director of the Center for Community Change, to those seeking to be allies in the movement to abolish poverty. “Find some way in your life to be in relationship with working class and poor people.” Deepak wasn’t speaking about charity.

Antipoverty movements are doing just that. People’s Action (whose tagline is “Join our joyous rebellion”) has brought rural and urban poor and working-class families together to campaign for housing justice and healthcare for all. Co-chair of the Poor People’s Campaign, Reverend William Barber — who has found receptive audiences among struggling Black families in deep-blue cities and struggling white families in deep-red rural counties-advocates for “fusion coalitions” made up of people of different faiths, ethnicities, and political identities joining together and demanding change “from a moral perspective.””

“She and her team stood out. They were all women of color, including two wearing hijabs, in a place where nearly all the shoppers were white. “But we’d walk up to them and say, ‘Do you want to sign a petition for 15 [dollars an hour]?’ Ninety-nine percent of people said, ‘I already signed it,’ or ‘Where can I sign?’” It reminded Saru of what had happened almost two years before, in November 2020. One Fair Wage workers were gathered outside the statehouse in Albany, New York, to call for a $15-an-hour minimum wage for tipped workers. The crowd of mostly Black and Hispanic New Yorkers had brought with them a twenty-four-foot-high statue of a flexing and aproned Black woman nicknamed Elena the Essential Worker. As the workers were chanting and cheering on speakers, a group of white men and women in red MAKE AMERICA GREAT AGAIN hats approached. Unbeknownst to One Fair Wage, the day of their rally was also the day the state legislature had scheduled to certify the results of the presidential election, and MAGA protestors had gathered earlier to challenge the count. When the pro-Trump crowd learned that the workers were there to push for higher wages, they shook hands and joined their protest.”