FORGET SEEING EUROPE, TRY LIVING ON $4 A DAY…

January 28th, 2018

180128 new york times poverty in america

As I read Angus Deaton’s The U.S. Can No Longer Hide From Its Deep Poverty Problem in The New York Times brought a piece on poverty written nearly a century ago: George Orwell’s The Spike where living on eight pence a day in 1931 might be compared to $1.90 a day, or better, in the United States, to $4 a day.

I commented on Deaton’s essay earlier in the week, but I came back to his piece today because I wanted to dive a little deeper. The central part of his thesis is that living in poverty in an industrialized nation is not the same as doing so in a sub-Saharan African or Asian country. He writes:

There are necessities of life in rich, cold, urban and individualistic countries that are less needed in poor countries. The World Bank adjusts its poverty estimates for differences in prices across countries, but it ignores differences in needs.

An Indian villager spends little or nothing on housing, heat or child care, and a poor agricultural laborer in the tropics can get by with little clothing or transportation. Even in the United States, it is no accident that there are more homeless people sleeping on the streets in Los Angeles, with its warmer climate, than in New York.

The Oxford economist Robert Allen recently estimated needs-based absolute poverty lines for rich countries that are designed to match more accurately the $1.90 line for poor countries, and $4 a day is around the middle of his estimates. When we compare absolute poverty in the United States with absolute poverty in India, or other poor countries, we should be using $4 in the United States and $1.90 in India.

How the hell do 5.3 million Americans live on $4 (or less) a day?

Poorly.

I grew up in a part of rural Ohio, on the edge of Appalachia, where running water and indoor plumbing were not a given. My family depended upon rain water collected in a cistern way past the time when I left home at 18. We were by no stretch of the imagination poor, my dad had a good job and I had no idea what being hungry or cold might mean, but there were students in my school who did. Deaton compares parts of the United States to Bangladesh and Vietnam. In the U.S., he writes:

With only a few (and usually scandalous) exceptions, water is safe to drink, food is safe to eat, sanitation is universal, and some sort of medical care is available to everyone. Yet all these essentials of health are more likely to be lacking for poorer Americans. Even for the whole population, life expectancy in the United States is lower than we would expect given its national income, and there are places—the Mississippi Delta and much of Appalachia—where life expectancy is lower than in Bangladesh and Vietnam.

Beyond that, many Americans, especially whites with no more than a high school education, have seen worsening health: As my research with my wife, the Princeton economist Anne Case, has demonstrated, for this group life expectancy is falling; mortality rates from drugs, alcohol and suicide are rising; and the long historical decline in mortality from heart disease has come to a halt.

Being poor sucks.

Being poor in the wealthiest nation in the world where people pay $100,000 to attend a party at the private resort of the President, really sucks.

One Response to “FORGET SEEING EUROPE, TRY LIVING ON $4 A DAY…”

  1. This is my favorite comment from the NYT piece.

    In simpler times, people with a strong back could find work as virtually all processes were manual.

    Then, machines came in to replace labor, people were displaced and hundreds of thousands of work horses sent to the slaughterhouse.

    Now, machines are arriving which can replace a lot of low-level white collar jobs, too.

    We have to ask the uncomfortable question, which is how can society provide a role for people, who for reasons of reduced mental or physical capacity, cannot contribute enough to earn their keep.

    There are millions upon millions of people who by virtue of incapacity, or cultural challenges that make them unemployable, have no place in the workplace, and never will. You wouldn’t hire them, and either will anybody else.

    The Pharaohs built the pyramids in part to absorb the labor of a restive population. What projects can we start to absorb the labor that in a capitalist society cannot earn it’s keep?

    One has to think that substantial WPA-type projects, which create assets well appreciated by taxpayers, is the answer. Not paying people not to work, which creates all kind of discord, but rather putting people to work, regardless of their capability.

    Society, and families, are held together by paid labor.

    Paid labor—or at least labor paid a living wage—is increasingly vanishing.

    In the machine age, what do we do?

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