Why the U.S. has failed to end poverty

Make Me Smart May 9, 2023 Transcript

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Kimberly Adams 

Hello, I’m Kimberly Adams. Welcome to make me smart where none of us is as smart as all of us.

Kai Ryssdal 

I’m Kai Ryssdal. It is Tuesday. This one is the 9th of May. Today single topic on the single show on Tuesdays. That’s what we do. Why poverty in the United States, in a country as rich as it is, the richest country in the history of the planet,  there are still millions and millions and millions and millions of people, many of them children, living in poverty.

Kimberly Adams 

Right. And even though we’ve talked about how child poverty fell 46% during the pandemic, poverty overall has pretty much stayed more or less the same over the last 50 years. And here to make a smart about why that is, is Princeton sociologist Matthew Desmond. His new book “Poverty by America” digs into some of those systems that keep poverty in place and what can be done to potentially change it. So welcome to the show.

Matthew Desmond 

Thanks for having me.

Kimberly Adams 

So the title of your book, “Poverty by America.” What’s different about poverty in America, compared to the rest of the world, and particularly other developed countries?

Matthew Desmond 

There’s a lot more of it. So our child poverty rate is twice the rate of peer nations like Canada, South Korea, and Germany. The kind of poverty we have too is worse. So Angus Deaton, the Nobel laureate, estimated that over 5 million Americans live in abject poverty by global standards, getting by on $4 a day or less. So America really harbors a hard bottom layer of poverty that a lot of rich democracies don’t.

Kai Ryssdal 

Why? Why? Why? Why?

Matthew Desmond 

Because many of us profit from it, you know. Some lives are made small, so that others may grow. This isn’t an accident. You know, many of us are contributing to poverty in our midst, even unwittingly, we’re connected to the problem, and we’re connected to the solution.

Kimberly Adams 

One of the examples you give in the book is the money that we spend on the mortgage interest deduction compared to the money that we spend on say, cash assistance for the poor. Can you explain that?

Matthew Desmond 

Sure. In 2020, the nation spent 193 billion, billion with a B, dollars on homeowner tax subsidies, like the mortgage interest deduction. Most of that money went to families that were quite well off already. But that same year, we only spent about $53 billion on direct housing assistance to the needy. Things like public housing, housing vouchers that reduce your rent. And so that’s a real imbalance. Then we have to kind of face the fact that, you know, a mortgage suburban home is government subsidized, just like a public housing story, tower is. And when you look at the welfare state, you look at it deeply, and you find that, you know, we’re doing a lot more to subsidize affluence than to fight poverty. And I’d like us to bring us back into balance on that issue.

Kai Ryssdal 

Yeah, I want to get there actually, because where things go from here is is the key part of this conversation, I think. But I do want to just sort of get a timestamp here and ask you how long it’s been this way?

Matthew Desmond 

Well, America has always wrestled with poverty in its midst. But there were times when we made significant investments in fighting poverty, and we had a lot of success. So if you look at the war on poverty and the great society that were launched in the 60s, these were deep investments in the poorest families in America. They made food aid permanent, established Social Security and Medicaid, for example. 10 years after the war on poverty was launched, poverty was cut in half in the country. And so it’s not true that we have to live with this or that we’ve always had this high level of poverty. There have been times where the government has done massive amounts of good and like you said in the intro, COVID was one of those times. You know, we cut child poverty by 46% in six months with one simple program: the Child Tax Credit, which was a subsidy to moderate and low income families. So we know how to do this.

Kimberly Adams 

So then where do we go wrong? Because a lot of people will blame it to say the, you know, on the Reagan administration and cuts to anti-poverty programs there. Did that really sort of started us on the wrong track or did something else happen?

Matthew Desmond 

So the Reagan administration did cut some key anti-poverty programs, especially housing. It cut aid to housing by almost 70%, which was a massive reduction. And we’ve never recovered from that. But other anti-poverty programs have actually grown per capita and adjusting for inflation over the last 50 years. So we have this paradox, where we are making deeper investments, we’re spending a bit more, but we poverty is persisting, right? And why is that? And one of the reasons is that the job market just isn’t pulling its weight. So if you look at the world poverty, or the Great Society, you know, back then, one in three workers belong to a union, real wages were climbing and you got some benefits. But as workers lost power, their jobs got a lot worse, wages stagnated. And so now we have to spend more just to stay in the same place. And so there’s a big learning lesson here. That if we want to abolish poverty in America, we don’t just need deeper investments in poverty, we need different ones. We need ones that really attack exploitation in the labor market and the housing markets.

Kai Ryssdal 

Okay, so this is going to be a tricky question to ask, but I’m gonna throw it at you and then you can answer it just based on your last answer there. Do you think we really want to eradicate poverty in America based on what you see in public policy right now?

Matthew Desmond 

Well, who’s the we there right? And so I think that we, as an American people certainly do. You know, most Americans today, left, right and center, believe that poverty result of unfair circumstances, not a moral failing. Most Americans want a higher minimum wage, most of us think the rich aren’t paying their fair share taxes. So I think the American people, they certainly want this. Our elected officials, that’s another matter. And I think that our elected officials are polarized from the people more than the people are polarized from each other on issues of basic economic fairness

Kimberly Adams  

How differently do we talk about spending when it comes to anti-poverty programs as a culture, compared to the way that we talk about other government spending?

Matthew Desmond 

Well, we often kind of saddle anti-poverty programs with these assumptions that the poor aren’t using the money in a responsible way, or that they’re dependent on the government. And if you look at the data, you realize that welfare dependency just there’s not a lot of evidence for it. You know, that’s not the issue. The issue is actually welfare avoidance. The fact that millions and even billions and billions of dollars in unused aid from anti-poverty programs is left on the table every year. So let me just give you a few statistics. You know, if you add up all the money that low income families don’t take, by not accounting for food stamps, or not taking unemployment insurance, Supplemental Security income, all these kind of welfare programs designed for them, you learned that every single year over $140 billion is left on the table. This is not a picture of welfare dependency at all right? This is a picture of us as a nation, doing a pretty poor job of connecting families to programs that they need and deserve.

Kai Ryssdal 

So it’s in some ways, it’s a logistics problem.

Matthew Desmond 

That’s right. And, you know, we used to think that the issue was stigma. That folks weren’t taking food stamps or unemployment, because they were proud, you know, and there’s something to that. If you’ve ever spent, you know, a day in the welfare office, you know, you’re spending half your day for a 10 minute appointment. And it is kind of degrading. But there’s more evidence that it’s not stigma, it’s really red tape, and bureaucracy. We make these programs incredibly hard to apply for confusing. In some states, you have to get fingerprinted and photographed to apply for these programs. And so this is, this is both infuriating, but also hopeful. Because it means that we can design programs more efficiently, and kind of make a big first step in getting people connected to aid that reduces their hunger and relieves their hardship.

Kimberly Adams 

Well talk a little bit more about that. What actually works?

Matthew Desmond 

Oh, so many things work in a way. You know, if you look at housing assistance, for example. You know, kids that are growing up in public housing today to a lot better than kids that are growing up in the private market unassisted. And so you think, “wow, what’s going on there?” But we just haven’t made these investments big enough. And so I think that making deeper investments and programs that work make a lot of sense. And we saw in COVID, again, that things like a child tax credit, or affordable housing assistance that reduced evictions to lowest rate on record ever, can make big steps in the right direction.

Kai Ryssdal 

Can I just, on the on the bureaucracy point of this and I should know the answer, but I don’t. Anti-poverty and social safety net programs in this country are, and please correct me if I’m wrong which I know you will, are federally funded but mostly state administered? Or do I have that backwards?

Matthew Desmond 

It depends on the program. So if you look at, if you look at things like cash welfare, right? It’s federally funded, but state administered, right? And because of that, states use a lot of liberty on how to get the dollars out. And that’s actually, that’s a problem. Yeah.

Kai Ryssdal 

Right. That’s, that’s where I’m going right? Part of this bureaucracy is because of the bifurcated nature of some of these programs.

Matthew Desmond 

That’s right. And so let’s dig in a little bit into cash welfare. So cash welfare is a block grant, which is just a wonky way of saying, “hey, states are some money and do what you will with that.” And for every dollar budgeted in cash, welfare, only 22 cents ends up in the pockets of family in terms of direct aid. And so you think well, “what, what’s going on there?” And so a lot of states are finding really creative ways to use that money. They’re funding Christian summer camps and marriage classes and things that well, really don’t have to do with with helping four families at all. A lot of states aren’t spending the money. They don’t have to, and they’re sitting on it. So Tennessee, for example, last time I checked, was sitting on over $700 million in unused cash welfare. And you know, this is this is for the poorest families. So this means kids aren’t getting enough to eat. This means families are getting evicted. And so I think that this is a way we need to kind of think about more oversight and transparency and accountability into how states are spending this this taxpayer money.

Kimberly Adams 

And I’d be remiss if I didn’t mention here that our colleague Krissy Clark is talking about this exact thing on this season of the uncertain hour with TANF and all the ways it leaks, that money leaks from the system. But Matthew, you mentioned earlier, and we talked about the child tax credit. And I guess that whole situation was almost the perfect example of kind of why we were stuck. Because there was all this research saying the child tax credit would help lift kids out of poverty. And then they rolled out this big Child Tax Credit Program in an emergency and lo and behold, it lifted half the kids in poverty out of poverty. And then Congress let it expire. So now, what? If this is the way that our government, does with what we know works, like how do you move forward from that?

Matthew Desmond 

I think we have to take responsibility for that. You know, on the one hand, we can kind of point to Congress, and we can point to that one vote, you know, we’re one vote away from having an established Child Tax Credit. But I also think that Congress didn’t feel the heat from us. You, me, everyone listening. I think that often we’re very fluent in the language of critique, and not very vocal in the language of celebrations, “hey, hey, I want this. Yes, let’s do this.” And I think that more of us need to have political will, and take political action the next time this comes around and demand these kinds of things, from our leadership. You know, Congress is going to be Congress. And I think that I have become very wary of absolving theories of the problem. I want us to start taking more responsibility. And on this issue, sure, we can point to that one lawmaker. But you know what, I don’t think enough of us picked up the phone. And enough of us wrote our representatives to say, “please keep this. I want this to be our new normal.”

Kimberly Adams 

Matthew Desmond, who is the author of the new book, “Poverty by America” also the amazing book “Evicted” back a couple years ago. Thank you so much.

Kai Ryssdal 

Thanks a lot.

Matthew Desmond 

Thank you so much.

Kimberly Adams 

Yeah, it’s real easy to blame Congress and not blame ourselves. That’s a very good point. And, yeah, it takes picking up the phone and putting on that heat. But I don’t know. That just kind of blew my mind when it happened. Because we talked about it a lot on Marketplace, about you know, all these kids being lifted out of poverty, that it was like evidence based and that it worked and all these kids that were getting, you know, better school lunches, and all these things, these programs that help kids not be hungry, help kids, you know, start performing better. And then it just went away. And it was so wild because like it, it worked. And then it stopped. Yeah, I don’t even know what to say.

Kai Ryssdal 

No, I don’t think there’s anything to say. So I will not. We do want to know however what you have to say. Our number is 508-827-6278. 508-UB-SMART are all letters. Email us if you’d like makemesmart@marketplace.org. We’re coming right back

Kai Ryssdal 

Alright. To the news we go. Kimberly Adams, your turn.

Kimberly Adams 

So since we are talking about poverty, one, you know, one of the things that Matt was saying was that these are choices that we make about how we spend our federal funds, our state funds on issues of poverty. And there was a really classic example of that in New York with this tragic, tragic, tragic, tragic situation with Jordan Neely, who was a man experiencing homelessness, who seemed to have some mental illness, who was a you know, exhibiting some, you know, kind of hostile behavior, but not necessarily violent behavior on a train and ended up getting tackled and choked to death. And obviously, there’s been, you know, all sorts of back and forth about whether or not it was murder, although the coroner has ruled that it was homicide, and there’s investigations and things like that. But I’ll point to a Eugene Robinson essay in The Washington Post that, you know, regardless of where this lands on culpability, broader society holds some responsibility for the choices that we made that put Jordan Neely in that situation on that train. And it lays out how he’d been struggling with mental health and struggling with homelessness, and had been in and out of hospitals, in and out of the criminal justice system, not able to get the mental health care that he needed. And, you know, it’s one of these things that a lot of us see people experiencing these very extreme circumstances. And it’s very easy to look away, and, you know, say “the system is messed up, and you know, what can I do?” But there are things that individually we can do to, you know, help and make a difference. And part of that is, you know, pushing our lawmakers on the policy decisions they make that create these systems, and maintain these systems or allow these systems to fail. And this man did not need to die that way, or at all really. And it’s it’s so sad.

Kai Ryssdal 

It’s really sad. And that is of a piece with what Matt was just talking about, the whole these are the choices we make, and we’re making them. We are making them as a country, right? Yeah. Okay, awkward segue. Totally different topic, extremely geeky, but possibly long term important. There’s a piece in Bloomberg today. It’s an interview with the CEO of a Brazilian wood pulp company called Suzano. His name is Walter Schalka. None of that is relevant. What’s relevant is what he said in the interview, which is this. So remember, this guy produces, he runs the world’s biggest hardwood pulp company, that is to say what you make paper out of, and China is 43% of his market, right? Here’s what he said in an interview the other day. He is going to start using the Chinese Yuan, the Chinese Renminbi in transactions, not the dollar. We’ve talked before, I think tangentially on this podcast about the dollar as the global reserve currency, why it matters, the benefits and challenges that it presents to the American economy. But for now, the benefits really outweigh the challenges that it presents. And there has been talk lately of, you know, maybe the dollar’s dominance is declining, maybe it’s gonna go away, maybe there’s the euro or the renminbi who knows. So here’s another step. Here’s another step. This is not going to happen tomorrow, it’s not going to happen next year or in five years. But at some point, the American dollar is not going to be the global reserve currency. And…

Kimberly Adams 

Or the only one.

Kai Ryssdal 

Or the only right, there may be a couple, you’re right. But here’s just a marker. Here’s just a marker. It’s it’s kind of interesting. Totally dorky, totally geeky. You don’t even read the interview or anything, because really hard wood pulp unless you’re in the field, right, it’s not the most engrossing thing. But.

Kimberly Adams 

I don’t know. I found it very interesting, because like, the commodities, if you actually start reading into them, in general, can tell you so many interesting things about the way the world works. Like I remember I was doing a story once on, you know, copper futures, and how the futures market and copper is a big predictor of economic growth because you need copper if you’re making wiring, which, you know, can let you know, when a country is about to, you know, expand its electricity grid, or, you know, any other type of high tech development, you know, there’ll be a boost in the demand for copper. Right? And that can tell you about economic growth. Who knew? And the same way the tissue and pulp business. I didn’t know that Brazil was one, had the world’s largest pulp producer. And, you know, it makes sense that China would be one of their bigger markets, because I mean, we do a lot more emailing than printing these days. Probably not as much as we should. And so other countries are probably still relying more on paper. Okay. Yeah, that makes sense. But I don’t know. I always find commodity stories fascinating.

Kai Ryssdal 

Totally. Totally agree. Yeah.

Kimberly Adams 

Yeah. All right. So that’s it for the news fix. Let’s do the mailbag.

Mailbag 

Hi Kai and Kimberly. This is Godfrey from San Francisco. Jessie from Charleston, South Carolina. And I have a follow up question. It has me thinking and feeling a lot of things.

Kimberly Adams 

Okay, last week on May the Fourth, I was very entertained by the new Star Wars video game that gives you the rare opportunity to see what a bathroom looks like in the Star Wars universe. And Baird sent us this in an email quote, “I believe one of the first Star Wars bathrooms was presented by Mad Magazine cartoonist Sergio Aragones. This cartoon appeared in issue number 197 back in March of 1978.” And this photo is amazing. It’s a clip of this cartoon, which shows I’m guessing who’s supposed to be Luke Skywalker or some other Star Wars character heading into a bathroom that has a lot of different openings in lots of different shapes and, and positions on the wall that you know…. if you think about the different shapes and orifices of various Star Wars characters, yeah, it would make sense that people would need openings at different locations and positions. And this reflects that. So yeah. And Luke is walking in looking very confused. But this is, it’s pretty funny. You should have a look at the show notes.

Kai Ryssdal 

Totally, totally. It’s fabulous. One more, it’s an email from Carl and Ariana. Here’s what he says or they say I suppose. Kai — My wife and I love your “rants”. However, I think it is unfair to call them rants. I think they should be called “decent human being concerns”.  Well, I appreciate that. I don’t, I don’t like to get ranty but sometimes, things just sent me off, man. That’s all I can say.

Kimberly Adams 

It’s like that bumper sticker. If you’re not mad… if you’re not angry, you’re not paying attention.

Kai Ryssdal 

True. Well, truer today more than ever, practically. Although I imagined that’s been said in every age.

Kimberly Adams 

Yeah. Probably.

Kai Ryssdal 

Anyway, I appreciate that. Thank you. Thank you. We’re gonna go and we will leave you as we always do with this week’s answer to the make me smart question. “What is something you thought you knew but later found out you were wrong about?” In honor of Mother’s Day, this coming weekend? All y’all got like four days to figure this out and maybe five I forget, if you haven’t. This week’s answer comes to us from our producer Courtney’s mom, Karyn . She’s in Chicago.

Karyn 

What is something I thought I knew but later found out I was wrong about? Well, I thought I had an infinite amount of time to take my kids on vacations and adventures. For example, we lived two hours from beautiful Banff, Canada. And I always assumed we would take our kids to Canada for skiing, snowboarding and sightseeing. We never made it. Quicker than I thought, their school, sports, jobs, friends and life filled their calendars. I look back and still think of so many things I wanted to do with my kids but time ran out. I’m now learning to meet my adult children where they’re at and be grateful for the awesome memories we made and look forward to all the new ones in the years to come.

Kai Ryssdal 

Amen. Totally true. Completely. Cosign that for sure. For bleeping sure.

Kimberly Adams 

Aw. Where did you want to go with your kids that you didn’t?

Kai Ryssdal 

Oh, I mean, look, we did really well by our kids. And we were able to travel and do some stuff. But look, they grew up and they get busy and pretty soon it’s “no you know, I can’t make it. Sorry.” And you’re like, really?

Kimberly Adams 

Yeah, yeah. Yeah, that’s rough. All right. Well, we want to know what you’ve been wrong about. Leave us a voice message with your answer to the make me smart question. Our number is 508-827-6278, also known as 508-UB-SMART.

Kai Ryssdal 

Make me smart, which is the podcast you’re listening to is produced by Karyn’s daughter Courtney Bergsieker. Ellen Rolfes writes our newsletter. Our intern is Antonio Barreras is our intern. Today’s program was engineered by sorry, just checking yes, it is still Charlton Thorp in there. Gary O’Keefe is going to mix it down later from New York.

Kimberly Adams 

Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. Francesca Levy is the executive director of Digital. And Marketplace’s Vice President and General Manager is Neal Scarbrough.  We have so much extra time today.

Kai Ryssdal 

I know right? I think, I think they’re playing the like the longer music again.

Kimberly Adams 

Well there were a lot of credits today

Kai Ryssdal 

That’s true it’s the Tuesday credits. Ah yes the Tuesday credits.

Kimberly Adams 

It takes a lot to get this show on people’s feeds.

Kai Ryssdal 

That’s true. It takes days a lot of people. Kimberly and I just have the fun jobs, everybody else doing all the work.