Whose fault is poverty?

Watch How Would Payroll Tax Extensions Be Funded? on PBS. See more from PBS NEWSHOUR.

So, while the title of this post promises a lot more than I can really deliver, I've been meaning to write about poverty for awhile now. And, as the rhetoric around Occupy Wall Street has been heating up and budget questions have forced the political discussion to questions of poverty and wealth, it has been increasingly difficult to avoid the type of rhetoric that reveals a lot about the broader society's views on what life in poverty is like and who is at fault when someone finds themselves in poverty. But I was watching the Newshour the other night when I saw the above piece and was struck by these comments of Senator Barrasso: 

GWEN IFILL: What about means-testing government health benefits, unemployment compensation and food stamps? Are you hitting the people who will be hurt the most? 

SEN. JOHN BARRASSO: Well, we heard from Sen. Coburn here today that there are people actually on unemployment who make huge amounts of money, and as well as those on -- on food stamps. And we want to see exactly -- I want to see exactly what the language is there.

So what really strikes me about this (beside the heavy mention of my hometown of Scranton) is the denial of the true state of poverty in this country and what it means for the families who live under the strain it creates. Felix Salmon had a recent post on the current state of the social safety net  that enlightens this a bit: 

It’s true that the poverty rate for children has come down — but it’s still unconscionably high. There are 13.6 million children under the age of 18 living in poverty — that’s 18.2% of all the children in the country. 

And most egregiously, even after taking into account food stamps and the like, 5.4% of the population — and fully 8.6% of the Hispanic population — is living on less than half the poverty level.

What does that mean, in practice? Here are the new poverty levels: 

 

To live on less half the poverty level means that a family of four — two adults and two children — would have a total household income of no more than $12,172 per year. Call it $1,000 per month. And that’s after accounting for aid from the government. 

With all respect to Senator Coburn, whose presentation Senator Barrasso cites, even if there are some people on unemployment and food stamps who make significant amounts of money, the evidence that Salmon presents show that there are huge numbers of people who do not make anywhere near "huge amounts of money" in our country, and any way of paying for government debts and programs that weighs heavily on those people is likely to cause a great deal of suffering. Let's match that plan against the administration's proposed tax hikes on those making over $1 million. As Gene Sperling explains of the program in the same Newshour piece: 

It asks those who make over $1 million, only 300,000 Americans, to pay a little more, about 3 percent more a year in the next -- in the coming years, so that we can give this type of tax relief, and not have the deficit go up by a single penny.

Let's put aside the seeming inconsistency of Barrasso's claim that it's alright to cut social safety net programs such as food stamps and unemployment benefits because people being assisted those programs are actually secretly pretty well off with his view that it's not alright to raise the tax rate on those American's who are making more than $1 million by 3 percent (For a really great commentary on this type of argument, see Jon Stewart from back during the Wisconsin collective bargaining debates). 

What's clear, beyond issues of fairness, is that the impact of implementing these different plans for paying for programs like the payroll tax extension will be vastly different. And, it seems clear to me, that a 3 percent increase on Americans making over $1 million will not cause suffering. It may cause some families to change their spending habits a bit, but compared to the impact of cuts on families already squeezing to live on close to $1000/month for whom such cuts might mean children eating less or walking to school in winter without a jacket or any one of the many important things that separate suffering from not suffering. This is just another way of saying that the same amount of money has different value to two people on different ends of the poverty and wealth spectrum. If your monthly salary is $1000, gaining another $1000/month doubles your salary. But if your monthly salary is $83,000,  an extra $1000/month is a drop in the bucket as a percentage of your salary. 

But more important than the math of the thing is what you're likely to spend that money on (or whether you're going to spend it at all). If you only make $1000/month there are probably still a lot of necessities that you are not spending money on and that would make your life significantly better if you were able to spend on them. If you're making $83,000/month you likely have very few necessities to spend that money on that will make large differences in their quality of life. So in a certain sense that extra $1000 is much more valuable to the person on the low end than it is to the person on the high end. But also, from the perspective of stimulative effect, the person making less money seems to me way more likely to spend that money because they're spending on necessities than the person who has those necessities already taken care of. (Admittedly, I'm sure there is a lot of economic work on this, and I am not really aware of it, so please feel free to leave links or responses in comments.)

There is another element to the discussion of poverty that is a bit troublesome to me, beyond the widespread underestimation of how extensive the problem really is. That is the question of what role the decisions and personal qualities of those in poverty contribute to their own impoverishment. Recently Tyler Cowen and Matt Yglesias had a bit of a back and forth on this recently, and Cowen represented the libertarian camp that wants to see more emphasis on personal responsibility when it comes to discussions of poverty:

How often will a progressive stress that the poor should develop greater conscientiousness rather than looking to government support? Many progressives are genuinely unaware of how unusual a moral code they often are communicating and celebrating, if only implicitly.

But for as much such a view on the effects of social welfare programs might seem intuitive or logical, I remain totally unconvinced that it's actually the case that a lack of personal responsibility is really what's at work in driving most of what keeps people in poverty. No doubt there are irresponsible poor people, but that shouldn't be confused as knock down evidence that poor people are irresponsible. After all, there are plenty of irresponsible rich people, and often enough that irresponsibility doesn't lead them to being poor.

Rather, I think the right way of framing this is that poor people have to face a lot more high-stakes decisions to be responsible for. This idea was explored recently in an article by John Tierney on the work of Roy Baumeister regarding will power:

Shopping can be especially tiring for the poor, who have to struggle continually with trade-offs. Most of us in America won’t spend a lot of time agonizing over whether we can afford to buy soap, but it can be a depleting choice in rural India. Dean Spears, an economist at Princeton, offered people in 20 villages in Rajasthan in northwestern India the chance to buy a couple of bars of brand-name soap for the equivalent of less than 20 cents. It was a steep discount off the regular price, yet even that sum was a strain for the people in the 10 poorest villages. Whether or not they bought the soap, the act of making the decision left them with less willpower, as measured afterward in a test of how long they could squeeze a hand grip. In the slightly more affluent villages, people’s willpower wasn’t affected significantly. Because they had more money, they didn’t have to spend as much effort weighing the merits of the soap versus, say, food or medicine.

Basically, when you have a lot of money, certain decisions are less high-stakes or simply do not exist for you. Budgeting is a much more labor intensive process when you have to do it consistently for things that are absolutely necessary. And, because the strain of that decision-making process is pretty considerable and there is limited mental energy to exercise the self restraint which serves as the base of personal responsibility, poor people aren't so much bad at exercising personal responsibility as it is they are asked to do a lot more of it.

And this has profound effects on other, comparatively less important decisions that nevertheless drive a lot of people's attitudes about the decision-making capacity of low-income people. Tierney explains:

Spears and other researchers argue that this sort of decision fatigue is a major — and hitherto ignored — factor in trapping people in poverty. Because their financial situation forces them to make so many trade-offs, they have less willpower to devote to school, work and other activities that might get them into the middle class. It’s hard to know exactly how important this factor is, but there’s no doubt that willpower is a special problem for poor people. Study after study has shown that low self-control correlates with low income as well as with a host of other problems, including poor achievement in school, divorce, crime, alcoholism and poor health. Lapses in self-control have led to the notion of the “undeserving poor” — epitomized by the image of the welfare mom using food stamps to buy junk food — but Spears urges sympathy for someone who makes decisions all day on a tight budget.

 While certainly this type of issue is not the whole story on poverty, but in the discussions I hear, these effects of poverty are rarely discussed. But when it comes to people's judgments of the poor information such as this is crucial. Because no doubt when people make statements like Senator Barrasso's, they are given the rhetorical license to do so not only by the superficial question of whether or not the economic need is actually there (that is, do they already make "huge amounts of money"), but also by the underlying assumptions about whether or not the poor are deserving.

How does this all relate to education? Well, when poor kids come to school, they not only face the deficits of having parents who come from lower educational backgrounds, but they also face these same questions about their own personal responsibility. And it affects their outcomes as well.

Admittedly, this is a hugely complex question, but as with most such questions of huge complexity, Planet Money has an enlightening perspective on these matters that, more than anything else, gives a clear sense of all the obstacles someone in poverty faces. Check out their podcast The Art of Living on the Poverty Line and When a Dead End Job Isn't a Dead End.