Poverty is not easy to solve

It has been fashionable in some quarters to claim that solving poverty is a simple matter of generosity and will.

A typical headline states:

We know how to eliminate poverty. So why don’t we?

The claim is that more generous cash transfers will lift families out of poverty and even relative deprivation. This is often stated based on evidence from developing countries, where a substantial portion of families are in conditions of absolute deprivation, but treated as if it applied to the (relatively) poor of the United States equally well.

This is not true.

The evidence is clear that, in keeping with the Iron Law and general patterns of fade out of social interventions, the impact of cash on family well-being is smaller than trumpeted in the short term, and unless cash transfers are permanent and continuous, the effects will be null in the long-term.

Advocates reply, then make transfers permanent and continuous.

This seems rather ignorant of the recent history of the United States. Relatively unconditional cash transfers without work requirements or time limits, even if not it as generous as Scandinavia’s, were a central component of American poverty policy from the 60s through the early 90s. The result was almost universally recognized as a profound social dislocation and disintegration among America’s underclass, particularly among poor black Americans. This goes beyond the rapid decline in marriage and the huge swell in homicide and imprisonment between 1960 and 1989.  The message of the AFDC experiment seems quite strongly that the costs of systematic welfare dependency are built up over time and only gradually dissipate. Even at a state level, more generous welfare provision at a state level during the 70s and 80s is associated with unusually large racial disparities today, twenty years after “welfare as we knew it” ended. Nor is social dysfunction that accompanies a rise in welfare dependency solely a confound of America’s troubled racial history, as the twinned rise in SSI-Disability receipt and the white mortality rate from suicide, alcoholism, and drug abuse suggests.

A lot of discussion of child poverty in America in particular founders on the fact that if you are a healthy, savvy, and conscientious single mother, there are quite significant resources available for your and your children’s support– in many settings much larger than the size of the proposed cash transfer programs. A lot of children, however, really are growing up in situations of deprivation and neglect, because not all single mothers are healthy, savvy, or conscientious. SNAP benefits for a single mother with two kids (an average of about 350 per month) are sufficient for healthy meals, particularly since children generally receive free meals at school. But hundreds of thousands of kids (around 5 percent of households with kids) pretty much don’t get regular meals outside of school-provided meals, what the USDA defines as “very low food security.”  Without food stamps this would almost certainly be worse.

While SNAP likely improves child food security overall, you can’t solve the remaining child hunger problem by raising benefits further. Their kids aren’t missing meals because SNAP benefits need to be raised, but because planning meals is something these mothers can’t do. There are other programs, like Nurse Home Visiting, that try to teach them how to do so, but the issue illustrates why simple transfers, particularly of unconditional cash, don’t often accomplish what they set out to do.

It may well be that we are headed towards a “rentier state,” in which an increasing proportion of the society is dependent in some form of government transfer. If that is true, the transfers, and the accompanying dependency on public largesse– will not be a “solution” to poverty, but instead the central social challenge of those times.

11 thoughts on “Poverty is not easy to solve

  1. What else can possibly done for those who are or will soon bear the crushing brunt of automation if not something like a UBI? Some people think the wisest course of action is to just allow these persons to suffer; let them wipe themselves out so that they don’t proliferate any further and encumber others. I think this sort of proposal is clearly execrable. So the question becomes, given the acknowledged pathologies of social welfare programs and the opposite problem of leaving these persons out in the cold, what can be done?


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