It is expensive to be poor in America. These costs are both small and large. Together they accumulate into a sum that is almost insurmountable.
For example, people in poor and working-class communities often pay more for the same goods and services — which are subpar by comparison — than people who live in more affluent communities. There are fewer opportunities for wealth accrual, because homes in working class and poor communities appreciate in value much more slowly (if they do at all), even when adjusting for the ways that racial segregation exacerbates that dynamic.
There is also a largely unregulated financial services sector that targets poor and working-class people, including check-cashing services, “payday loans,” rent-to-own furniture and electronics companies and high-interest auto lenders.
People in poor and working-class communities often lack access to reliable public transit, meaning that getting to work or school is inordinately expensive. Lack of affordable child care services is another “hidden” cost that limits the upward mobility of poor and working-class people.
Poverty and other forms of material deprivation also inflict a type of mental and emotional trauma on their victims. Navigating America’s labyrinthine and threadbare social safety net programs is like a job in and of itself, one that is very time-consuming, frustrating, exhausting and all too often humiliating.
Growing up in a poor or working-class community also has a negative impact across one’s adult life: Social scientists and other researchers have repeatedly shown that access to economic resources and other social capital early in life is directly correlated to a person’s future health, job opportunities and overall life chances.
Poor and working-class communities also have substandard public services and experience violent, repressive and sometimes deadly policing tactics. In a striking example of inequality in action, poor and working-class people do not receive a fair return on their taxes in terms of public goods and services. As perverse as this seems, America’s poor and working class actually subsidize wealthier people, including the ultra-rich and large corporations, who often benefit greatly from American society while paying dramatically less in federal and state taxes to help support it.
The Institute for Policy Studies recently reported on how the world’s richest people have profited from the human misery of the coronavirus pandemic while returning little if anything to the common good:
The world’s billionaires have seen their wealth surge by over $5.5 trillion since the beginning of the pandemic in March 2020, a gain of over 68 percent. The world’s 2,690 global billionaires saw their combined wealth rise from $8 trillion on March 18, 2020 to $13.5 trillion as of July 31, 2021, drawing on data from Forbes.
Global billionaire total wealth has increased more over the past 17 months of the pandemic than it did in the 15 years prior to the pandemic. Between 2006 and 2020, global billionaire wealth increased from $2.65 trillion to $8 trillion, a gain of $5.35 trillion.
Billionaires have reaped an unseemly windfall at a time when millions have lost their lives and livelihoods. The pandemic has supercharged existing global inequalities, with the wealthy profiteering from the shuttering of the main street economies around the world….
At least nine people have become new billionaires since the beginning of the pandemic, thanks to the excessive profits pharmaceutical corporations with monopolies on COVID-19 vaccines are making.
The COVID-19 pandemic has pushed over 200 million people into poverty, according to estimates by World Bank researchers.
What of the “working poor”? They occupy a type of liminal space in America’s social hierarchy, often holding down multiple jobs that do not pay a living wage.
During the coronavirus pandemic, the working poor were temporarily elevated by the mainstream news media, the plutocrats and the death-cult Republicans to the status of “essential workers.” In practice, this fake honorific was used to disguise the reality that the working poor were being asked to die for capitalism while being underpaid and otherwise exploited. To make matters even more dystopian, many of the working poor are employed by some of the world’s largest and most profitable companies — whose rank-and-file employees sometimes must seek out food stamps and other public aid in order to survive.
In a new essay at the Conversation, social scientists Jeffrey Kucik and Don Leonard analyze the plight of the working poor in America, starting with the baseline income required to survive in America. They say that’s about $30,000 a year for one person with no dependents, but much more for families and anyone who lives in a major city:
But we estimate that at least 27 million U.S. workers don’t earn enough to hit that very low threshold of $30,000, based on the latest occupation wage data from the Bureau of Labor Statistics, a government agency, from May 2020. We believe this is a conservative estimate and that the number of people with jobs who earn less than what’s necessary to afford the necessities of life is likely much higher.
Low-income occupations encompass a wide range of jobs, from bus drivers to cleaners to administrative assistants. However, the majority of those 27 million workers are concentrated in two industries: retail trade and leisure and hospitality. These two industries are among America’s largest employers and pay the lowest average wages.
For example, the median salary for cashiers was $28,850 in early 2020, with 2.5 million of the nation’s 5 million cashiers earning less than that. Or take retail sales. There, 75% of workers — about 1.8 million — were earning less than $27,080 a year.
It’s the same story for leisure and hospitality, the industry that took the hardest hit from the COVID-19 pandemic, hemorrhaging 6 million jobs in April 2020 as much of the U.S. economy shut down. At the time, close to a million waiters and waitresses were earning less than the median income of $23,740. …
To us, these figures should cause policymakers to redefine who counts among the “working poor.” A 2021 Bureau of Labor Statistics report estimated that in 2019 about 6.3 million workers earned less than the poverty rate.
Americans often assume that the poor do not work. According to a 2016 survey conducted by the American Enterprise Institute, nearly two-thirds of respondents did not think most poor people held a steady job; in reality, that year a majority of nondisabled working-age adults were part of the labor force. Slightly over one-third of respondents in the survey believed that most welfare recipients would prefer to stay on welfare rather than earn a living. These sorts of assumptions about the poor are an American phenomenon. A 2013 study by the sociologist Ofer Sharone found that unemployed workers in the United States blame themselves, while unemployed workers in Israel blame the hiring system. When Americans see a homeless man cocooned in blankets, we often wonder how he failed. When the French see the same man, they wonder how the state failed him.
If you believe that people are poor because they are not working, then the solution is not to make work pay but to make the poor work — to force them to clock in somewhere, anywhere, and log as many hours as they can. … In recent decades, America has witnessed the rise of bad jobs offering low pay, no benefits and little certainty. When it comes to poverty, a willingness to work is not the problem, and work itself is no longer the solution.
Intergenerational wealth reinforces social inequality: Over time the more affluent classes accrue even more extreme amounts of wealth and income, while the poor and working classes are anchored in place and losing ground. One reason this is happening is because the tax code and other laws are written by the moneyed classes and their agents, with the express intention of furthering their own interests.
Where wealth, income and the color line intersect, these divergent outcomes are even more extreme. New research from the Brookings Institution shows that intergenerational poverty and a resulting lack of other economic opportunities and resources are much more likely to impact Black Americans than other groups:
In other words, experiencing poverty for three generations straight is almost uniquely a Black experience. Black adults in their 30s are over 16 times more likely than white adults to be in the third generation of poverty in a row. In fact, Black Americans are 41 percent more likely to be in third-generation poverty than white Americans are to be poor. …
Black Americans make up 44 percent of those experiencing one generation of poverty (even though poverty rates are higher among Black families, they make up a smaller share of the overall population). For two and three generations of poverty, the shares rise to 64 and 83 percent, respectively.
We find that half of Black adults in the bottom fifth today (51 percent) had both a parent and a grandparent in the bottom fifth, but only eight percent of white adults in the bottom fifth had poor parents and grandparents.
Ultimately, social inequality in America is the predictable (if not intentional) result of a political and economic system that is anything but meritocratic. America may not have kings and queens and titled nobility, but it has a plutocracy and a system of dynastic wealth that operates much the same way.
Discussions about income and wealth inequality are at their root a debate about the value of human life and the meanings of human dignity and freedom. I explored such questions of justice and economics in a recent conversation with Joanne Samuel Goldblum, CEO of the nonprofit organization the National Diaper Bank Network (NDBN). She is also director of the Alliance for Period Supplies, an organization focused on addressing “period poverty” in the United States.
Goldblum is co-author (with Colleen Shaddox) of the recent book “Broke in America: Seeing, Understanding, and Ending U.S. Poverty.”
In this conversation, Goldblum discusses what it means to be poor in America, and how members of the middle and upper classes — who often perceive themselves as “struggling” financially — are privileged and advantaged in day-to-day life, compared to the poor. We also talked about how hostility and indifference to the poor have become normalized in American society, and the ways that the coronavirus pandemic and its economic destruction has exposed foundational myths about American capitalism.
Toward the end of this conversation, Goldblum reflects on what a truly humane American society might look like if the country’s leaders and the public as a whole decided to ensure fair and equal opportunities for all.
Extremely wealthy white men are rocketing off into space while there is great poverty and suffering in the United States and around the world — poverty that predated the coronavirus pandemic but has certainly gotten worse. How do you make sense of such a juxtaposition?
I do not believe that wealth in a capitalist country is inherently a bad thing. However, what is wrong is how many Americans are not paying their fair share of taxes. Jeff Bezos likely could have paid much more in taxes and still launched himself up into outer space. He would still be incredibly wealthy. It is very hard for many people to even comprehend being that selfish.
I recently received an email from a reader who recycled almost every tedious myth about income and wealth inequality in the United States. The email had all the right-wing talking points about how we shouldn’t “hate the rich” for “working hard,” claiming that most rich people worked their way up from poverty and that “being poor in America is a choice.” How do you respond to that kind of rhetoric?
People say things like that to me all the time. What I actually hear the most is some version of “They shouldn’t have a baby if they can’t afford it.” I am never the only woman in a room who’s been pregnant when they didn’t expect to be. That’s life! Such responses are also a function of an American mythology that anybody can make it if they just try hard enough. To accept the fact that is not true would be devastating to many Americans.
The American dream really is that a person can achieve anything, and even if it hasn’t happened yet perhaps it will in the future. This translates into a desire for wealth even if you don’t have it — and wanting the rules to benefit you when you get to that destination.
How are so many people able to ignore the poor, the homeless and other people in need — and in some cases literally willing to walk over them?
I believe that poverty is largely hidden because we as Americans consider it shameful. Many people who are poor do not want others to know it. We look down on people who are poor, which means that people who are poor don’t want to tell other people.
I like helping people in need get diapers for their babies and children because when someone says something to me about how people should not have babies if they can’t afford them, I know that we have nothing to discuss. If a person feels like it is OK for their neighbor’s child to sit in filth all day, there is no middle ground between us.
The need for diapers is a window into poverty. When a person walks past someone on the street who is street-homeless, they can make up stories to explain it all. But folks who need diapers for their children and can’t afford them are living paycheck to paycheck, or maybe they do not have stable housing. You don’t often see them on the street. I try to remind people that if you want something good for your own child, you should want the same thing for any other child in the world.
Where did your humane vision for society come from?
I grew up in New Jersey. I’m Jewish. We went to a Reform synagogue and modern Reform Jewry tends to be very focused on social action and social justice. I’m a social worker. My mom is a social worker. My dad was an attorney who did pro bono work for the ACLU and similar causes. It was part of who we were.
As a social worker I assisted families whose kids were more or less the same age as my kids. And I could never stop thinking about how hard it was for me — and I had everything I needed. I was also always struck by how, as a privileged woman, I could complain bitterly about how stressful my life was. How do I do it? How do I get meals? How do I get my kids to school on time, and work, and all of that?
That was with never worrying about my bills. That was with a partner who was supportive. We had cars and phones. I’d work with families who had none of those things. Society expects so much more of poor people than they do of wealthy people. I was just really struck by that. I would drop my kids off at a great school. I would then go work with families who didn’t have heat and hot water.
I just couldn’t ever stop thinking about how horribly unfair it was. I hadn’t done anything so special in my life, and we have everything we need. My parents might have made some good decisions. My husband and I might have made some good decisions, but we’ve also made bad ones. They just didn’t happen to be bad financial decisions. When you don’t have to worry financially, I think it gets easier to convince yourself that your life is how everybody else lives as well.
Privilege is the ability to insulate oneself from consequences. An upperclass or rich person can make bad decisions, but their financial and other resources protect them. Poor and working-class people struggle against a system that is designed to punish them.
I have thought a great deal about buying my way out of problems. I always talk about how every time you forget lunch for your kids and you go and buy sandwiches, or you don’t have a charger for your phone and you buy a new one, or you pay your parking tickets online with a $2 fee — you are buying your way out of something in those moments. What would I do if I didn’t have that money? America’s social systems are created by people who have that extra money, and most of those people do not consider the alternative.
What does it mean to be poor in America?
You’re poor when you can’t afford your basic needs. Certainly, the U.S. poverty guidelines are horrifically outdated. There are people who are poor who live at well above the federal poverty level, because the federal poverty level is so low. That is a major way that America defines its way out of poverty. Because poverty looks so different in many other countries, looking from the outside it seems like Americans have so much money. To say that a family making $40,000 a year is poor is very hard for many people to understand.
We also know that if you’re not getting any kinds of government subsidies and you are making $40,000 a year, and it’s two adults and two children, and you’re in an apartment that’s livable, it’s going to cost you much more than that. We are willfully blind to how much our systems hurt our fellow Americans.
The coronavirus pandemic damaged the economic lives of tens of millions of Americans. Many of the lost jobs will never return. There are many formerly middle- or even upper-class people who lost everything to the economic destruction and are now living in cars or moving between friends and relatives or living in extended-stay hotels. What are the different types of homelessness?
For me, “family homelessness” is so challenging to think about. When most Americans think about homelessness, they imagine someone on the street who has all their belongings with them. Our country really, really doesn’t see family homelessness because for most people, when they think about homeless, they think of street homeless. They think of the people that you pass on the street who have all of their belongings next to them.
That’s not what most homelessness in the United States looks like. In the case of family homelessness, you’re dealing with people who are by and large either in cars or living with family or doubled up. Children are often given to relatives to raise and then the parent becomes street-homeless.
Again, it goes back to the whole idea of seeing. If you don’t see it, it’s not a problem. Because of the reality of what life as a person who is homeless on the street is, people have a narrative that those people are drug addicts, those people are mentally ill, they’re making a choice to live like this. You read it all the time: No one chooses to be poor; nobody chooses to be homeless.
What has the coronavirus pandemic exposed about American society?
For the first time in many years, Americans found themselves going to the store and not being able to get what they wanted. It was incredibly stressful for people. I think that because Americans tend to need to experience something themselves to have empathy, they were like, “Oh my God, is that what it is like to be poor?” Such experiences were eye-opening for a certain segment of the population.
What has also happened is that during the pandemic the government is giving cash payments to people who need them. This feels unprecedented. This support is changing people’s lives. The $300 child tax credit is going to make an enormous difference for people. If we as a country are ever going to get to a point where there are sustained cash transfer programs, it is now. COVID has laid bare how close to the edge so many Americans are living financially.
What about the people who weren’t poor to begin with, and during COVID lost everything? The fact that in a year you could go from being wealthy or upper middle class to living in your car shows that we don’t have a social safety net in this country. More and more Americans who never expected to need a social safety net are now, in some cases personally, very aware of that problem
We’ve created a society where it’s embarrassing to ask for help. What we saw during COVID was that there are diaper banks which saw a 700% increase in the number of people who needed their services. In America, there was a shutdown of businesses and people were left to largely fend for themselves. In most other developed countries, people were paid. There really is an insane disconnect between our policies and the reality of our lives in this country.
What would our society look like if people weren’t ashamed to ask for help? If people didn’t feel that shame and stigma?
We would be a much kinder society. We would also have much more diversity in the leadership of our country. We would have a democracy that truly reflects our society.
Everybody should start at the same place. I believe that if there wasn’t so much shame around poverty, and if there was a robust social safety net in the United States, that’s what we would have. We would have good schools in every zip code. People in poverty lose out — and the rest of us lose out as well. Because who knows what that child might have been if he or she had great nutrition, didn’t have lead in their water and had a really great education?