In early 2011, 1.5 million American households, including 3 million children, were living on less than $2 in cash per person per day. Half of those households didn't have access to in-kind benefits like food stamps, either. Worst of all, the numbers had increased dramatically since 1996.
Those are the astonishing findings Johns Hopkins' Kathryn Edin and the University of Michigan's Luke Shaefer discovered after analyzing Survey of Income and Program Participation (SIPP) data in 2012. In the intervening years, Edin and Shaefer sought out Americans living in this situation, with basically no cash income, relying on food stamps, private charity, and plasma sales for survival.
The result is $2.00 a Day, a harrowing book that describes in devastating detail what life is like for the poorest of America's poor. I spoke with Edin and Shaefer about the book Friday; a lightly edited transcript follows.
How people get by on $2 a day or less
How did you set about finding people living on $2 a day or less?
Before we even went to the numbers, I was doing fieldwork here in Baltimore in the summer of 2010. I kept noticing that more and more families we were coming across didn't seem to have any means of cash income.
Initially I had kind of thought, "Maybe these people are just living on non-cash benefits like SNAP [Supplemental Nutritional Assistance Program/food stamps] or housing subsidies." That's really different than it was before welfare reform, when a lot more people were claiming cash from the welfare program, but I thought that at least they would be claiming some level of protection from the government nonetheless.
But not only were people not getting any cash from TANF [Temporary Assistance to Needy Families/welfare], in many cases they weren't getting non-cash benefits either. What we saw when we went to the numbers was that although some were getting food stamps, and a few were getting a housing subsidy, half were living outside of the in-kind safety net as well. That was pretty shocking.
The other thing that shocked me was the magnitude of the problem. Over the course of a year about 3.2 to 3.4 million kids experience at least three months in $2-a-day poverty.
So it started with the qualitative insights, and then we moved to the survey data for confirmation, and then we wanted to see if we could find more families like this in different places. We started setting up field sites and would hang out at food banks and emergency food distributors. We'd post flyers at family homeless shelters, since the book is really about families with kids. And then we recruited research collaborators who had strong ties to some of the communities that we wanted to recruit sample members from.
How do families making $2 per person per day get by? How do they get housing and food?
One thing that's interesting about the population is how diverse it is. It's racially and ethnically diverse, it's regionally diverse. You see both married and unmarried couples in this situation.
Being precariously housed or homeless is not ubiquitous, but it's close to ubiquitous. In terms of survival strategies, we documented the importance of the charitable sector and vital public spaces like public libraries. But we also show that these are disproportionately available in places with the most overall resources. There is a lot more available from the charitable sector in Chicago than there is in the Mississippi Delta.
Another common strategy we saw was cashing out food stamps. This is not something the poor typically do, and I want to emphasize that, but in the world's most advanced capitalist economy, you gotta have cash. When it comes time to pay for the kids' underwear, or to buy a school uniform, you're gonna do that. Families have a very intense moral dialogue about that. They feel it's wrong and only do it in certain circumstances. It really leaves them hungry at the end of the month, though, since food stamps never come in a surplus, and they only get 50 to 60 cents on the dollar, depending on the region they're in. It's a ripoff for them and for the taxpayer, and really exposes the family to hardship.
Beyond that, there's selling plasma. You can only do it a couple times a week, and it can leave you physically debilitated. You make about $30 a time. It's fascinating sitting in front of the Cleveland Plasma Clinic, watching busload after busload of people get off at the bus stop, and the entire bus walks right into the plasma clinic. Scrapping [collecting and selling discarded metal] was the other common survival strategy that we documented. It doesn't pay well if you're only using a grocery cart, which is what most of our families are doing.
Across the different field sites, the people we talked to would commonly have a scar along the crease of their elbow, from so many needle pricks from giving plasma. It sort of looked like a track line. It pays relatively well, but they do it so much that it's leaving a physical mark.
Some were selling sex. Sometimes it was for cash; more commonly it was for the right to stay doubled up in a space for one more night.
The thing we really emphasize is that there's a lot of variety. I almost think of it as an entrepreneurial spirit, people doing whatever it takes to get that little amount that helps them get to the next day. But these all constitute a lot of work. They all come with risks, and they take a lot of time. The more that people are engaged in this kind of work to get a tiny amount of cash income, the less they're able to engage with the rest of American society, to look for a formal job. It's a real separating force.
Much of it is technically illegal. Women and men, parents, talked a lot about how they felt they had to become criminals to also be providers, and that's certainly not a desirable social outcome.
Was drug income common?
In terms of selling drugs, no, it wasn't something we saw.
It's so incompatible with parenthood. I've been following this long-term sample of Baltimore youth, and as soon as you have a kid, you get out. It's just not something parents do if they want to have any kind of ongoing relationship with the child.
Everything is worse in the Mississippi Delta
One chapter of the book focuses on the Mississippi Delta. How is rural extreme poverty different from in cities?
The Mississippi Delta is in some ways an outlier region of the country that provides the exception that proves the rule. There's a real saturation of families living in the Delta who meet the threshold. In fact, the welfare system in Mississippi pays so little that you actually qualify as $2-a-day poor if you're on welfare. It's $185 a month for a family of three with no other income. The texture of a Delta town is really jarring. What it does to the entire society is create a real chain of exploitation, where the not-quite-so-poor wind up preying on the extreme poor to get by, leading to real material hardship that's probably outside most people's sense of what ought to go on in America.
People on disability in the Delta, who are only getting about $610 a month, can't live on disability alone, so they provide transportation for the extreme poor, so they can go to the grocery store, or the doctor, or the food pantry in the nearest town that has one, 30 miles away. For the privilege of riding in that gypsy cab, they're going to have to give over $30 worth of food stamps. They're going to have to go into the store not only with their own grocery list, but with the grocery list of their provider.
We also found in the Delta — because you don't have a plasma clinic nearby, you don't have a scrapyard, there is no charitable sector in these Delta towns that offers any kind of meaningful benefit — a big market for kids' Social Security numbers. You had parents and family members selling their kids' Social Security numbers to relatives and friends who were working but would otherwise not qualify for the EITC or other tax credits.
Everything that we found in other places was magnified and maybe a decade more advanced in the Mississippi Delta. The place is really a world apart. The difference is that whole systems were failing people. To the extent that nobody was looking out for the families we followed anywhere else, it's doubly so there. It allows these exploitative relationships to go on to a degree that surprised us both, as people who study American poverty and have studied American poverty for a long time. The Mississippi just seemed an order of magnitude worse in a lot of ways.
We heard from a lot of people that if people go into a store to pay for food with SNAP, the shopkeeper might take a little extra for themselves. We've got the story of Tabitha, who gets approached by one of her teachers about having a sexual affair as a teenager.
With the promise of food.
Right, she's exchanging sex for food. That story is horrible by itself, but I think the thing that sets the Mississippi Delta apart is when it came to light that this happened, not only does that teacher not get criminally prosecuted, he isn't even forced to leave the school. After a lot of pushing he's not forced to stop being in the classroom. It's just a whole order of magnitude less in terms of anybody looking out for these families.
Welfare is dead
How do people in these areas get access to the welfare state? How do they get SNAP or TANF?
TANF is virtually dead in all of these places. It's absolutely striking that every one of our families is categorically eligible for TANF, and none of them are receiving it. For most, it doesn't even enter their minds to receive it. This was the most shocking thing of all, in a way. Prior to welfare reform, the large majority of poor people got something from the AFDC system [Aid to Families with Dependent Children, the old name of welfare] during the course of the year.
Now the fraction who get anything from TANF is very small, just over a quarter. It's really a shadow of itself. We argue that it's dead, and where it's really dead is in the imaginations and thought processes of the poor. This is not seen as a fallback. In most cases, it doesn't occur to people to apply. We saw this again and again in site after site. There are only a million adults left on the TANF rolls in the United States, and half of them are in just two states: California and New York. Many other states barely have functioning TANF systems anymore.
SNAP was more common, especially in the Mississippi Delta. But when there's residential instability, the program often doesn't work well. We saw people who would be cut off because they moved from one office jurisdiction to another and the paperwork wasn't processed. In the cases of folks who'd been working and lost their job, the program doesn't respond as quickly as they need. But with TANF, as Kathy said, we had people say, "Oh, they just aren't giving that out anymore." Or they'd ask, "What's that?" They'd never heard of it.
You go to the exact same office to apply for TANF as you do for SNAP. They know where the office is, but they don't know you can get TANF there as well.
We also saw some evidence of "informal diversions," where when someone finally did go in to apply for TANF, they were treated in a way that suggested it wasn't actually an option. Rae McCormack, after months and months of having nothing and being in very dangerous double-up situations, went in and applied for TANF, and her caseworker told her, "We don't have enough to go around for everyone. Come back next year." She took that as a no, but the caseloads in Ohio in particular are quite low. The director of advocacy at the Atlanta Community Food Bank was quoted in Slate a few years ago saying they don't send people to TANF anymore because it's just not worth it, they never get on.
Part of that is a result of the way the program is structured. TANF is structured as a block grant. If the rolls are low, it makes it a lot easier for the states to meet the requirements of the program imposed by federal law, but they also can reallocate the money they don't spend on cash assistance to other things. Some states are just wholesale reallocating part of the money to things they were going to spend on otherwise.
It's welfare for states, and not for the families.
When work disappears
I think a lot of readers will be wondering why people in this situation can't work enough to break out of extreme poverty. Why is steady employment in the formal economy so hard to come by for these people?
Almost all of these households actually do have workers. There is someone in the house who is engaging in the formal labor market at least some of the time. You still see these pretty lengthy spells in extreme poverty, but these people are in and out of the low-wage labor market. Seventy percent of them have had a worker in the low-wage labor market in the past year, whereas only 10 percent have even gotten a dime from TANF. This is very consistent with the ethnographic data, where people say, "I'm a worker."
These people identify as workers, they want to work, they are continuously trying to get and maintain jobs, but what has happened along with welfare reform is a change in the American economy so that bad jobs are really bad. In some ways, these families are holding onto the very bottom end of the low-wage labor market, and are getting eaten up by it in ways that leave them very vulnerable to poverty.
It's very hard to find a job. The unemployment rate has been very high for low-educated workers for a long time. These folks are at the back of the line.
Jennifer Hernandez, in the book, was about as diligent as anyone we talked to, and it took her 10 months to find a job. She gets a job in the custodial service for the city of Chicago. At first she really loves the job. She talks a lot about how, when she has a job, she's most stable, her mental health challenges are most at bay. She's cleaning a lot of corporate apartments between leases and stuff.
But then it starts to get colder, and the work shifts to cleaning foreclosed homes. She and her team are going into homes that have been boarded up for a long time, that might have had everything of value ripped out. There might be somebody in the house. They might walk in on a drug house or squatters. There's no water, so they have to bring in their own water. No power, no heat, so they're slapping on extra coats. She had asthma problems before, so she starts to get sort of sick from breathing in this air day in, day out. When she starts calling in sick more, she starts getting fewer and fewer hours. Eventually she says, "I have to quit this and start looking for a new job full time, because I know how long it takes."
The second piece is that family and friends are not providing the kind of support we think of social networks as providing; they're actually one of the challenges the families deal with. Rae McCormick, the cashier at Walmart in Cleveland, is named cashier of the month two of the six months she works there. She gets into a truck that she shares with her uncle George and finds the gas light is on even though she gave him money for gas, and she can't get to work. She calls Walmart and they say, "Don't bother to come in again if you can't find a way in." So you've got both unstable jobs and a volatile personal family life.
Oftentimes these families often do have challenges that require jobs with a little give, and there are precious few jobs like that. In the old times, when you had a rich employer-employee relationship, someone might drive over and give Rae McCormick a ride to the Walmart, or might give her an advance on her next check so she can put more gas in her truck. That kind of relationship between the employer and employee is rarer and rarer. It has become very depersonalized in a way that's really tough for families of young children, particularly those who have additional challenges like asthma or mental health challenges or physical disabilities.
How do we fix this?
What sorts of policies are needed to end extreme, $2-a-day poverty in America?
We'd like to see policies that increase the supply of jobs for families at the bottom of the economic ladder, and we've got some recent models for that. As part of the 2009 stimulus package, there was subsidized jobs program through the TANF Emergency Fund. It provided about $1.3 billion in federal funds for states; 39 states plus DC took them up, and partnered with private employers to create positions. We have some good evidence that this had positive results for the people involved. It's a temporary thing that ended with the stimulus. We'd like to, as a first order of business, bring that back, maybe even make it a larger program.
We have to do some things to improve the quality of the jobs we have, such as toughening up oversight of labor standards. Let's start by doing a good job of enforcing what we have on the books. We'd like to see minimum wage increases and see what that does for improving equality, along with this program to increase the number of jobs. Then we turn to housing, which is itself part of the jobs problem. If people had more stable employment, it'd go a long way toward improving the housing problems. We need a bigger investment in our housing subsidies programs. There's a lot of evidence that that pays dividends, as well.
Finally, we think that we need to bring back some kind of cash safety net. People really just need cash when they're at the very bottom, when they're the poorest of the poor. They need a little bit of cash to get out of the circumstances they're in. When we see people selling their SNAP and losing 40 cents of every dollar they sell — if we provided a little bit of cash income, we could, without increasing what we spend, increase the value of what they get. We could give some of their SNAP in cash. The most obvious thing would be to fix the problems with TANF by closing some of the loopholes that incentivize states to keep their caseloads low.
The good news is that we see histories of labor force attachment even among the poorest families in America. So there's a possibility of providing a cash safety net that's pegged to past work. There's a couple of options for doing that outside the TANF system, but we could also just improve TANF so it's fulfilling the mission it was meant to fulfill in 1996. It was supposed to be temporary assistance for needy families. Let's actually make it that.
We're not going back to the old AFDC system where there were no work requirements of any real meaning. We're not advocating that. We're advocating for truly creating a nimble temporary safety net, so that when work doesn't work, families don't get so far down the hole that you see these real long-term costs in terms of exposure to toxic stress and trauma that we're observing in our sample.