The High Cost of Poverty

A recent op ed by Dr. Mark Rank, professor of social welfare policy at Washington University, states that a majority of Americans will be poor at some point in their lives.  I went on his website,  and clicked on the “Poverty Risk Calculator.”  By entering only five variables – my race, age, sex, education and marital status, I found I had a 20% chance of falling below the official poverty rate in ten years and at 25% risk over 15.  Now, those acquainted with my checkered work history know I’m well familiar with poverty, both before and after my marriage, but I’m an outlier here.  A white, middle aged college graduate with three MA degrees should have the world on a string, rather than working three jobs to keep the wolf away from the door.

Others have it far worse, of course.  I am working as a long term substitute teacher in the Philadelphia Juvenile Justice Service Center, instructing, as best I can, adjudicated youth awaiting a hearing and placement.  I’d estimate 80-85% are black, 10% Hispanic, less than 5% white and NO Asians I’ve seen.  Nearly all, I’d wager, come from poor families.  Counting total personnel – teachers, administrators, counselors, secretaries, residential staff, judges, lawyers, technicians, security, custodial etc. – there are more people working here, making a living (with health & pension benefits) off the backs of the poor, than being housed.  I’m told confinement costs, on average, about $975 per day per youth.  This is an extremely costly way to “correct” the costs of poverty, if in fact that ever happens.

Rank and his colleague, Michael McLaughlin, calculate the cost of childhood poverty to the nation at $1.03 trillion in 2015.  This was 5.4% of total GDP or an amount equal to 28% of the federal budget.  Consider that the recent GOP tax “reform” effort is aimed at increasing economic growth from 2.5 to 3% annually, mainly to benefit the rich, at a cost of $1.5 trillion over ten years.  This tells you where our priorities lie.  Further, they estimate that each dollar spent on reducing childhood poverty saves the country $7 in the long run in increased productivity, lower health care costs and incarceration rates.  I’m not sure how they calculate this, but the general principle makes sense.

The piece is short, with few details.  Crucially, how do you reduce childhood poverty without helping the adults on whom they depend for survival?  Other than Social Security Disability (which averages $750 per month) the Earned Income Tax Credit (worth up to $4000 per year for a worker with 3 minor children earning around $30,000) and Food Stamps ($100 – $300 a month) we have little to help the poor, working or non.  A true child anti-poverty policy would focus on increasing the employability and incomes of the adults who care for them.  These folks, however, get scant attention in the policy process, as they have few advocates, make no campaign contributions and vote at lower rates than the wealthy.  So, like the old Fram oil filter commercial used to say, “You can pay me now or pay me later.”  We, in our shortsightedness and hardheartedness, have chosen the latter path – and we pay for it.





4 thoughts on “The High Cost of Poverty”

  1. Nick: your post neglects several important child poverty programs: WIC, Head Start, medicaid, TANF (successor to AFDC). And I’m sure there are many more, not that I disagree with your assessment that our nations anti-poverty programs are disgracefully underfunded.

    Sent from my iPhone



    1. Dan, You’re correct. Also housing subsidies (if you’re among the 1/5 eligible who receives them) and the child tax credit (if you earn enough to pay federal taxes). TANF is a joke – the benefits are so low and work requirements so high even most poor people won’t apply. I was speaking primarily of adults in this section. Thanks for reading and commenting. Nick


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