Why The U.S. Can’t Cease Poverty

37.9 million. That's the number ofAmericans currently living in poverty, accounting for11.6% of the total population. That's despitethe fact that America ranks first as the richest nationin the world in terms of GDP. The United States is knownfor having this great abundance, and at the sametime, alongside that abundance, there iswidespread poverty and.

Economic insecurity. Sometimes you question, youknow, we're in the United States of America, how canthe citizens be going through such an issue? We always boast that we'resuperpower, that we are the richest in the world andthings just don't make sense. Poverty in the US had beensteadily improving over the past decade. From a heightof 48.8 million people.

Living in poverty in 2013to 34 million in 2019. That was until thepandemic changed its course. COVID absolutely had a verydeep impact on the access to employment and long-term employment for a number of families thatwere already vulnerable for various reasons. Prior, it was myself and mytwo older brothers, along with my stepdad, thatconstantly worked to provide for everyone in the house.

But after COVID 19 and thewhole lockdown, we were laid off. And ever since then, we have had issues finding a job. Poverty is expensive. About 11% of the federalbudget or $665 billion goes to economic securityprograms. Child poverty alone isestimated to cost the US over $1 trillion based onthe latest research from 2018.

There are also really highcosts on an individual level . Poverty leads to moreanxiety. It leads to more stress. It leads to more healthproblems, all kinds of things that amplify theeffect of poverty. The feelings that you wouldusually encounter when you're in this position ismostly depression. Why can't I find a job? Why are we in thissituation? You know, we're.

Trying our best andsometimes it's just falling back down on our face. So how did poverty becomesuch a big issue in the United States and why is itso difficult to end it? Income inequality is one ofthe big reasons why the US suffers from such highrates of poverty. The income for the top 10%was more than 13 times higher than income at thebottom 10%, according to the US Census.

We unfortunately in theUnited States are at the very high end in terms ofincome inequality. And so what happens is whenthe distance gets further and further away, the rungson the ladder get further away and it's harder forpeople to climb those rungs out of poverty into themiddle and to the upper class. The pandemic has madeinequality worse. The Gini index, whichmeasures the nation's income.

Inequality, rose for thefirst time in a decade by 1.2% in 2021. The reason the pandemic hasmade that worse is because when you talk to largeorganizations, corporations, what they saw was thatstaff was leaving, but they had a response to that,right? Their response was, let'sgive bonuses. Let's give raises. Many organizations, manysmall businesses,.

Government, they don't havethat luxury. So inflation has kept upwith the money that most people in the 1% have made. But it has deepened andwidened the gap between those that have money andthose that do not. Research by MIT estimatesthat the living wage in the United States is $24.16 perhour for a family of four. But the federalminimum wage is set at $7.25 per hour. This means that atypical family of four needs.

To work more than two full-time minimum wage jobs to earn a living wage, and single-parent families need to work significantlyharder. We worked at a banquet hall. Any sort of party, we wouldset it up, come early, set the tables, dishes, plates,silverware, everything, you name it. We worked for $15an hour. It was really bad. I would say we were reallyoverworked.

13-hour shifts sometimes. We were really frustratedwith where we were, but at the same time, it was like,what do we do if we leave? You know, we were atthat stage of like, yeah, we hate this job, but we haveto keep it to continue going. Problems with wages areespecially worse for workers of certain races. If we're looking at thebroader population of people.

Who are poor or low income,meaning one emergency away from being poor, we'retalking about approximately 140 million people. Out of the 140 million, wellover 70 million people, well over half of thatpopulation are people of color. The US also suffers from alack of social safety nets that protect Americans frompoverty. If you look at, for example,the amount of cash that.

People might get if they're low-income, it's very, veryminimal. Right now we receive welfareand it's roughly around $250 for my household ofseven and it actually has helped us a lot. Sometimes the numbersreally don't make sense because how can a largefamily just live off a couple hundred dollars,especially now in this day and age where you go to thegrocery store, you spend.

And a few items are $100. Most countries, for example,European countries, have what's known as a childallowance, where if you have a child, you get a certainamount of monthly income to help raise that child. That's pretty common. But in the United States,we don't have anything like that. And in the UnitedStates, we don't have universal benefits, forexample, health care or.

Child care. It's also a system that manytimes is pervasive in actuallycreating poverty situations. So I'll give you anexample. If I'm eligible for Medicaid today and I'm alsoeligible for cash assistance and I'm also eligible forSNAP, if I get a job that provides me even a littlebit closer out of poverty, I lose all those benefitsimmediately, which means that I'm incentivized if Ineed health care for my.

Children and I have a jobthat's not going to provide it right away to not lookfor employment that is going to pay me an amount that'sgoing to make me ineligible for certain benefits,right? So while people are workingreally hard for upward mobility, the systems thatwe have in place don't give them the grace to be ableto come out of poverty and provide their own agency toactually create the opportunity for upwardmobility.

The official poverty measurein the US today is based on calculations from the mid-1960s. It's calculated bycomparing pretax income against a threshold set atthree times the cost of minimum diet In 1963. A large number of federalprograms still rely on this measure to figure out whois eligible for assistance and welfare. The researcher, whose workbecame the basis of that.

Measure, never intended itto be used in the way that it currently is, both as awidespread measure of poverty, but then as thebasis of all of these different social welfareprograms and allocations of resources towards those programs. It doesn't take certain veryobvious indicators into consideration. To start, itlooks at pre-tax income, which is not what I'mtaking home every day so that doesn't make sense. Italso doesn't look at.

Different familycompositions, which absolutely impacts how afamily may spend money. If I am the type of familythat has both of my parents living with me, I'm goingto spend more. It doesn't look at expensesaround food or child care. So in many ways, it'sincredibly out of date because it has not kept upwith the way life has changed for most Americans. As a response to thesecriticisms, the supplemental.

Poverty measure wasdeveloped in 2011 as an improvement over theexisting measure. It incorporates into themeasurement both the cost of basic needs like food,clothing, utilities, but also government transfersand programs. So you could see the effectof government programs in addressing poverty andeconomic insecurity. It also takes into accountgeographical differences. So the supplemental povertythreshold is more of a range.

Depending on where youlive, your household size and what your housingstatus is. So it is more comprehensive. In that way, it's animprovement on the official poverty measure. But some experts argue thateven the supplemental poverty measure isn't aperfect method. While it looked to close thegap on certain indicators that the original povertymeasure was not taking into.

Consideration, it did notgo far enough. Food is one of those placeswhere we are still not taking into account whatfood may cause in a state like New York versus astate like Mississippi. So if you have a universalbrush for the whole country, you're going to miss anumber of people that are either at risk of fallinginto poverty or are already technically living inpoverty but are not counted by the measure.

The Census Bureau told CNBCthat both the official poverty measure and the supplemental poverty measure provide a consistent dataof poverty measurement and that the Bureau continuallystrives to innovate and improve the design andmeasurement of their well-being statistics. This difficulty inmeasuring poverty has also led some experts to arguethat poverty isn't as serious of an issue as it'smade to believe.

Poverty in the United Statesand the way it's normally understood is not a bigissue at all. It's deliberatelymiscounted. So the reality is that wehave poverty in the United States because the CensusBureau ignores the entire welfare state when it goesto count poverty. You count poverty bysaying, well, a household has an income, say lessthan $26,000 a year, but all the welfare benefits or 95%of the welfare benefits are.

Not counted, and they alsoundercount earnings by about 50%. Therefore, you have alot of poverty basically because most of theresources that these folks have are not counted. Unless we can get anaccurate number of just how prevalent poverty is in theUnited States, attempting to eradicate it is close toimpossible. When we don't have thosenumbers. A lot of folks who are making policy decisionsare flying blind.

Whether I'm a largecorporation that is looking to invest in anorganization or in a city, or whether I am a publicofficial that is trying to figure out how much SNAP isenough SNAP. If I don't have a baseline,there's no way I'm ever going to be solving theproblem. If COVID has provenanything. Poverty is an issue thatcan be resolved with the right policy.

Government assistance ledto a significant decline in the supplemental povertymeasure, lifting 45.4 million Americans out ofpoverty during the height of the pandemic. Policy, I would say, is oneof our strongest tools in fully addressing anderadicating poverty. It is where we can definewhat the problems are, accurately measure what theproblems are, and then design and implement theprograms we need to address.

The true extent of poverty. A really good example thatI'll use is that of the elderly. This is the onereal success story in the United States as we'vereally been able to reduce the poverty rates amongstthe elderly as a result of primarily social securityand Medicare. So if we didn't have thoseprograms today, poverty rates for the elderly wouldgo from about 10% to 40%. And that shows you thedramatic impact that.

Government programs andpolicies can have on reducing poverty. Figuring out a more accuratemethod of measuring poverty is a vital step ineradicating the issue. I would begin with changinghow we define and measure poverty to include the fullextent of economic insecurity. Another way of measuringpoverty, and this is a way that European countries andother countries use is.

What's known as a relativemeasure. And so they say if you fallbelow 50% of median income, then we're going to countyou in poverty. So if the median income was$70,000 and you fell below $35,000, you'd be countedas being in poverty. More targeted socialprograms could also have a significant impact on theimpoverished community. Some of those programs mayinclude an expanded child tax credit, the kind ofwhich we saw in 2021 when it.

Was expanded during thepandemic, raising the minimum wage immediately toat least $15 an hour, but then moving towards aliving wage and guaranteeing that everybody who wants towork can work as a guaranteed ability andaccess to a good paying job. I think a reallystraightforward solution that people have beentalking about more recently is the idea of a universalbasic income. So here the idea is that ifpoverty is a lack of income,.

Then a very straightforwardway is to transfer some income. Here's the analogyI would use to get people to shift their way ofthinking, and it's the analogy of musical chairs. Let's say we have tenpeople playing and eight chairs available. Now, who's going to win andlose at that game? Well, if we focus on theindividual level factors, people that were in a badposition when the music.

Stopped and so on. But if we focus on thestructure of the game, then two people are going tolose out regardless of the individual attributes. And that's what's going onhere in the United States. We're focusing on, peoplearen't working hard enough. They're not doing this.They're not doing that. When really the problem isthat there aren't enough chairs in the game.

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