U.S. Poverty, Welfare Policy, and the $2-a-Day Poor

Edin and Shaefer's Proposal to End $2.00/Day Poverty and how it implement it

they propose three core principles: 1) Guaranteeing work opportunities through subsidized public job programs, higher minimum wages, predictable work scheduling, and expanded tax credits; 2) Ensuring housing and family stability through expanded housing vouchers and flexible childcare subsidies; and 3) Restoring an accessible emergency cash safety net when work is temporarily impossible so families are not forced into severe asset depletion or illegal shadow economies.

Supplemental Poverty Measure (SPM) Calculation, Purpose, and Impact

calculates poverty thresholds using basic necessities adjusted for regional housing costs. Resources are calculated by adding cash income and in-kind benefits (like SNAP and housing subsidies) while subtracting mandatory work, childcare, tax, and medical expenses. purpose is to serve as a research tool to evaluate policy effectiveness without changing poverty definitions. When applied, it increases overall poverty and elderly poverty due to medical costs, while lowering child poverty because in-kind safety net benefits are counted.

Official Poverty Measure Calculation

Created by Molly Orshansky based on the cost of the USDA's basic economy food plan multiplied by three, adjusted for household size and inflation.

Criticisms of the Official Poverty Measure

It uses an absolute standard rather than relative living standards, relies on an outdated assumption that food is one-third of a household budget when housing is now the largest expense, ignores regional cost-of-living differences, and fails to count non-cash government benefits or mandatory work and medical expenses.

Supplemental Poverty Measure (SPM) Purpose

Serves as an accurate analytical research tool to measure modern economic hardship and evaluate government policy effectiveness, without replacing the official poverty line or altering public assistance eligibility.

Supplemental Poverty Measure (SPM) Resource Formula

Net wage = gross cash income plus the value of in-kind government benefits (such as SNAP food stamps and housing vouchers), minus mandatory out-of-pocket expenses for work transportation, childcare, taxes, and medical care.

SPM Impact on Elderly and Child Poverty Rates

Significantly increases measured elderly poverty because of high out-of-pocket healthcare expenses, while slightly lowering measured child poverty because non-cash safety net benefits like SNAP and housing vouchers are included as family resources.

Trends in Poverty Rates Since the 1960s

rates fell in the late 1960s during the Age of Shared Prosperity, rose through the Age of Growing Inequality, saw a dramatic increase in child poverty and single-mother household poverty alongside a significant decrease in elderly poverty due to targeted political attention and voting power.

Means-Tested Programs vs. Entitlement Programs

Means-tested programs require applicants to demonstrate financial need and low income to qualify (e.g., SNAP, Medicaid, TANF). Entitlement programs grant assistance automatically based on demographic status, age, or prior payroll contributions regardless of income (e.g., Social Security, Medicare).

Difference Between Medicare and Medicaid

Medicare is an entitlement healthcare program for older adults and disabled individuals regardless of income. Medicaid is a means-tested healthcare program specifically for low-income individuals and families.

Most Commonly Used Public Assistance Programs

Social Security and Unemployment are the most widely used entitlement programs, while SNAP food stamps and Medicaid are the most widely used means-tested programs.

Initial Purpose of Aid to Families with Dependent Children (AFDC)

Created under the Social Security Act to provide cash assistance to poor widowed mothers, later expanded to cover all single mothers with dependent children without a federal time limit.

Main Components of 1996 Welfare Reform

Replaced AFDC with Temporary Assistance for Needy Families (TANF), established a federal five-year lifetime cap on aid, mandated work or school activities within two years, required unmarried mothers to identify the father, and required teen parents to live with a responsible adult.

Goal and Outcomes of Welfare Reform

The primary goal was to reduce the number of people receiving welfare. Outcomes included a massive drop in welfare enrollment while poverty remained high, without anticipated spikes in child abandonment or homelessness.

Why the U.S. Wanted to Get Rid of AFDC

widespread public perception that AFDC fostered long-term dependency, out-of-wedlock births, and disincentives to work

Main Reason Poor Individuals Do Not Apply for TANF

Administrative barriers, severe social stigma, strict sanction policies, negative past interactions with welfare agencies, and the belief that small benefit amounts are not worth the administrative burden.

Challenges Transitioning from Welfare to Self-Sufficiency

High childcare costs, lack of reliable public transportation, substance abuse obstacles, lack of educational credentials, and low-wage job markets characterized by dead-end positions with no mobility.

Paid Employment Experiences of the Poor

Low-wage employment often fails to lift families out of poverty due to unpredictable hours, involuntary part-time shifts, lack of paid sick leave, low wages, and frequent layoffs.

Housing Quality and Density Among the Poor

Poor families face substandard housing conditions, severe overcrowding, lack of privacy, frequent evictions, and high residential mobility as they double up with relatives to avoid homelessness.

Survival Strategies of the $2.00/Day Poor

Collecting cans, selling blood plasma, trading SNAP benefits for cash, scrounging for scrap metal, doubling up in overcrowded housing, and performing informal odd jobs.

Why $2.00/Day Poverty is Disproportionately Rural

Rural areas like Appalachia and the Mississippi Delta suffer from deep historical geographic isolation, the collapse of agricultural and extractive industries, and a total absence of formal low-wage labor markets.

Hyperghettoization

The extreme physical and social segregation of impoverished urban neighborhoods from mainstream society, driven by the loss of low-skilled jobs and weak attachment to the formal labor force.

Culture of Poverty Thesis

theory formulated by Oscar Lewis arguing that prolonged poverty fosters a distinct, self-perpetuating lifestyle and subculture passed down across generations as a defensive adaptation to social exclusion.

Mindset and Outlook in the Culture of Poverty

Characterized by strong feelings of inferiority, helplessness, fatalism, living in the present moment, and a lack of delayed gratification.

Four Dimensions of the Culture of Poverty

1) Lack of integration with mainstream social institutions; 2) Reliance on a local underground or ghetto economy; 3) Unconventional domestic and family structures; 4) Attitudes of fatalism, feelings of powerlessness, and living in the present.

Critique of the Culture of Poverty Thesis

Discredited for blaming the victim, reversing cause and effect by treating coping behaviors as causes of poverty rather than consequences, ignoring structural segregation and institutional racism, and assuming a single unified culture among the poor.

The Underclass / Desperately Poor

Refers to persistently poor urban populations facing long-term economic exclusion, who are frequently and unfairly stereotyped as possessing character flaws or laziness despite severe structural barriers.

Mutual Aid Networks among the Poor

Informal systems of resource swapping and cooperation among impoverished households that provide immediate survival support, but create heavy ongoing obligations and social debts that prevent individual upward mobility.

Parenting and Kinship Networks: Mother's Role

The mother and her kin are usually the most active in the child's life.

Parenting and Kinship: Father Accepting Paternity

If the father accepts paternity, his female kin are active in the child's life, regardless of whether he is present. If denied, female kin not active in the child's life.

Parenting and Kinship: Role of Subsequent Boyfriends

The mother's subsequent boyfriends and their female kin may become recognized as 'family' to the child.

Parenting and Kinship: Half-Siblings Disparity

Half-siblings raised in the same household may have entirely different active kinship networks.

Poverty and Underground Economy Participation

The harsh realities of poverty force people to participate in the underground economy.

Underground Economy Survival vs. Alienation

The underground economy helps poor people survive but further alienates them from mainstream society and its formal institutions.

Underground Economy Traditions and Social Structure

Long-standing traditions and informal social structures dictate how participants relate to and cooperate with one another.

Underground Economy and Upward Mobility

The underground economy and its unwritten rules make upward social mobility almost impossible.

Underground Economy Rules and Enforcement

Includes both illegal work and legal unreported under-the-table work, operating under informal codes of conduct with rules against monopolizing so everyone can survive, enforced through social ostracism.

Role of Churches and Pastors in the Underground Economy

Churches fill gaps left by absent social services, act as neutral dispute brokers, and pastors or local leaders overlook infractions or participate to support community survival.

Demographic Profile of Who is Poor (Gilbert Textbook)

total numbers: poor are predominantly white, urban/suburban, living in single-mother families; poverty rates: African Americans, Hispanics, children under 18, and single-mother families experience the highest risk.

Persistent Poverty Trends and Structural Determinants

Only a small minority of poor families remain persistently poor over long periods; marital status, education level, and labor market opportunities exert the strongest influence on avoiding poverty.

U.S. Poverty Compared to Western Europe

The United States has significantly higher poverty rates and child poverty rates than comparable Western European nations due to less generous government tax transfers and social safety nets.