Matthew Desmond’s book Poverty by
America, 2023, Random House
Large Print, caught my attention for several
reasons. The problem of poverty and
homelessness is an issue in Canada too and
so a concern of the Canadian church leaders.
Desmond is a well-regarded author. His book
ranks high on this spring’s
non-fiction book lists. He won a Pulitzer
Prize for his book on a related
topic: Evicted. Desmond not only
documents the situations of “the poor” but
examines why there is poverty and suggests
the poor are linked to the lives of
upper and middle classes who benefit from
other forms of government “welfare”. For
example, the upper and middle classes have
tax-breaks for payments on a home
mortgage in the US. Then the poor are locked
out of the communities the rest
live in and the things those communities
offer: a home, security, good banks, good
education, affordable health care, and work
with a liveable wage. Chapter 1, The
Kind of Problem Poverty Is. Desmond puts before us some profiles
of people and their predicaments. Poverty
begins with no money. In 2022 the US
Official Poverty Measure set the poverty
line at $13,509 a year for a single and
$27,750 for a family of four. But lack
of money is only a beginning. A piling on of
problems begins. Taking a snort of
drugs to stay awake or kill the pain on
double shifts at the docks, a father of
three is found unsuitable to keep his kids.
There follows a fight in the courts
which ends with his keeping one kid alone in
poverty and giving up the other
two to a stepmother. Poverty is pain. It is the back aches
of home helps and nurses lifting the
old and sick out of beds or off toilets, it
is pain in the knees and feet of cashiers
standing to ring up items, and it is rashes
and migraines of those using
chemicals to clean offices, homes and hotel
rooms. Slum housing spreads mould
and cockroach allergens that creep into
young lungs. Poverty means cavities in
1 in 4 poor children, who cannot afford
visits to a dentist. The lives of the
poor are often marked by violence. Gun
violence can bring death or survivors
who must then live out their lives in pain.
Sexual abuse of children leads to their
becoming adults who live in pain that is
relieved by pills or fentanyl. On top
of pain is instability. Rents soar and
incomes fall. Those below the poverty
line spend at least half their income on
rent. Evictions are common. Jobs have become
gigs and most new jobs disappear within a
year. Temp workers are everywhere and
their numbers grow. Pay checks grow and
shrink very quickly. Poverty is the
constant fear things will get worse. A third of Americans live with little
economic security as bus drivers,
farmers, teachers, cooks, nurses, security
guards or social workers. “As a
lived reality there is plenty of poverty
above the poverty line. And plenty,
far, far below it.” Deep poverty begins at
half the poverty income level – and that
includes one in eighteen Americans. In 2020
18 million people fell into the
category and survived on $6,380US annually
if single or $13,100 for a family of
four. Poverty is loss of liberty. The
overwhelming majority of America’s current
and former prisoners are very poor. But
since poverty statistics do not include
those in jail, there are many more poor
people than reported. Poverty is the feeling
the government is against you - you are
fated to be managed and processed,
roughed up and handcuffed. Today’s municipal
regulations (US) still allow
police to arrest the homeless for being seen
in public. Poverty is
shame-inducing. It is felt in the
degrading rituals of the welfare office
where you can wait half the day to see
a caseworker for 10 minutes. It is felt at
home in the apartment with cracked
windows and cockroaches that the landlord
blames on you. Poor people do not
appear in movies, on TV or in children’s
books. An identity comes with mental health
issues, but not with poverty. There is no
flag to wave for poor peoples’ rights.
And poverty syphons away mental energy and
brainpower. Poverty is
no equalizer – it is intensified by
racial disadvantage and eased by racial
privilege. “There is no metropolitan
area in the US where whites experience the
extreme concentrations of
disadvantage with poverty rates in excess of
40 per cent.” The
wealth gap between Whites and Blacks
remains as large as in the 1960s. Poverty is
not a line. It is a knot of social
maladies tied to every social problem we
care about. Chapter 2, Why
Haven’t
We Made More Progress? From 1970
to 2019 the poverty rate rolls up
and down, from 12.6%, to 13.5%, to 15.1% in
2010, and down to 10.5% by 2019. In
comparison, in 2023 Statistics Canada
released
data for 2021. Canada’s overall poverty rate
was 7.4%,
following the end of temporary emergency
pandemic benefits that were provided
in 2020. This is below the 2019 pre-pandemic
rate of 10.3%, and nearly half the
2015 rate (14.5%), the baseline year for
Canada’s legislated poverty reduction
targets. Meanwhile, in the US, standards of
living increased since 1970, but poverty
was not lessened. The poor buy a TV or cell
phone as they arrive and fall in
price but you can’t eat that or pay the rent
with it or get health or dental care.
And programs helping the poor, especially
housing, were cut by the Reagan era. Perhaps
surprisingly, anti-poverty budgets grew
since 1970 – mainly in the healthcare
area. There is little relationship between
poverty and a Democrat or Republican
administration. The US has not been cutting
welfare spending. Even for programs
other than Medicare, federal relief has
grown. But the poverty rate remains the
same. Part of the answer is
that Clinton handed welfare relief program
funding like
Temporary Relief to Needy Families as block
grants to states to distribute, and
in several states fractions of that money
reach the poor. Or there are barriers
to access a program. Disability applications
need multiple applications and
even court action. Desmond shows that growth
in the number of immigrants has not
increased
the poverty rate, and immigrants do not
compete with Americans for jobs – they
compete
with each other for jobs. In the long term,
they pay far more in taxes than
they receive from any welfare payments. Desmond examines whether
poverty is caused by unmarried families – a
lack
of formal married status. He shows that
welfare programs are constructed so as
to make marriage a way to lose access to
needed funding if a family is married
or living together. Rather, the situations
play out in reverse. It is getting a
real economic opportunity that precedes
marriage which cannot be contemplated until
financing for would-be families is stable.
Of course, bad jobs, unobtainable college
degrees, unaffordable daycare, and
incarceration discourage marriage more than
the
welfare rules that exacerbate the situation.
Mass incarceration is anti-family
by keeping the imprisoned family member
isolated from the rest of the family, making
even telephone contact very difficult, and
finally releasing the person with a
criminal record to face dim job and housing
prospects. The way to climb out of
poverty requires getting a full-time job –
but that is equivalent to asking people
to get a different life!
Desmond insists
that poverty is not just bad luck. “Poverty
persists because some wish and will
it to.” Chapter 3, How We
Undercut Workers. Poverty is not usually
talked about as something that is
benefitting some.
Rather it is linked to vague things like
“de-industrialization” – something that
just happened along. It causes discomfort to
suggest that poverty has existed because
some people benefit. Sondheim wrote that the
history of the world tells who gets
eaten and who gets to eat. Vulnerability to
exploitation grows as liberty shrinks.
Undocumented
workers are not covered by labor laws. So,
over a third are paid less than
minimum wage and 85% are not paid overtime.
The rich contend things are complex
and call a panel of experts. In The
Grapes of Wrath a tractor driver is
ordered to drive the tractor through a
tenant farmer’s house. The tenant farmer
faces confusion about who is responsible –
the tractor driver, his boss, the
bank, the East. But there is no confusion
about the fact that one man’s poverty
is another man’s profit.
Desmond tells of Julio,
working to feed his family with a shift at
McDonalds followed by one at a temp agency –
both minimum wage. He ended up
passing out and was carried out of a store
on a stretcher. Minimum wage is
discussed. The economic theory from 1946 was
that
increasing minimum wage would reduce
employment. In 1992, research on a test
situation showed that increasing minimum
wage had little effect on employment. The
bulk of recent evidence affirms that.
In the 1950’s and 60’s a
third of workers were unionized. Workers’
wages
rose. The “stagflation” of the 1970s was
blamed on unions, and governments pulled
back on worker protections. Wages were cut,
striking workers fired and replaced.
First it was air traffic controllers in
1982, then in the private sector. Since
the 1970s, the bottom 90% of income earners
only received a 24% income increase
while incomes of the top 1% doubled. Real
wages remain what they were 40 years
ago. The poorly paying jobs of
America today are not a result of not enough
education. In 1970 less than a third of
young adults from families in the bottom
25% of the income distribution were enrolled
in a college. In 2020 roughly half
were. Roughly half American aged 25 – 34
years have obtained a bachelor’s degree
– as in Netherlands, Switzerland, France and
other democracies, all of which
have lower poverty than the US.
The brutal job market is
not due to globalization or technological
change.
The acceleration of global trade resulted
from policy decisions like 1994 NAFTA
that made it easier for companies to move
factories to Mexico. Although the
world has changed it has changed for other
countries too. Belgium, Italy and
Canada have not had the wage stagnation and
surge in income inequality of the
US. Those countries still have unions. The
issue in the US could be lack of worker
power. Lousy underpaid work is not a
necessary product of capitalism. But
without unions, the capitalist battle
between profits and wages has moved
things away from the mid twentieth century
balance: steady employment; opportunities
for advancement and raises; and decent pay
with some benefits. Today’s businesses farm
out positions to contractors. Google relies
more
on temps and contract workers than on
full-time employees. Temp agencies compete
to offer the cheapest labor for janitors.
This has limited workers’ ability to
earn promotions. So have things like
“noncompete” clauses in employment contracts
to prevent someone leaving to join a similar
company and moving up the ranks
there, or agreements between franchises to
prevent good workers moving to get
more pay at another franchise. Finally, there are gig
jobs used by companies like uber. Such
companies
outpower the taxi unions to get their way.
And if a company like Walmart puts
wages up – its shares go down! Who benefits
from keeping the wages low?
Shareholders. Who are they? True the richest
10% of families own 80%, but over
half US households are vested in stock
markets. And those with pensions or
educational
investments are recipients of the market
profits. Consumers benefit too from
the hidden underpaid workforce that delivers
goods or groceries or meals. We
never think to wonder if those providing the
service are unionized. Julio’s story changed
when he plucked courage to join others to
protest
for a $15 minimum wage – which they got in
Emeryville, California. Now he holds
two jobs but can get by. He feels better he
said. He has time for his younger
brother. A small change, but a big impact.
“Higher wages ease the grind of
poverty.” Chapter 4, How we
Force the Poor to Pay More. People who don’t own
property or can’t access credit are at the
mercy of
those who do and can. This situation invites
exploitation in the rental housing
market. Exploitation began with the move to
cities in the 1800s when those who
had city houses partitioned them into rooms
using even cellars. Renting to poor
families was profitable. Racism and
exploitation fed on each other in the Great
Migration of Blacks 1915-1970 when Blacks
were hemmed into ghettos and forced to
accept housing there that no one else wanted
- often paying double what
previous white tenants had paid. Money made
and expanded slums because slums
made money. Rent has more than
doubled in the last two decades. No so
renters’ incomes.
It’s not just a shortage of housing. Rents
jumped in cities with plenty of
apartments, like Birmingham and Syracuse
where 19 and 12 percent of units were vacant
in 2021. Rents rose around 14 and 8 per cent
respectively. Also, rent increases
have outpaced owners’ expenses. Surprisingly
landlords in poor neighbourhoods
earn roughly $300 per month per apartment
compared with $225 in middle-class
neighbourhoods and $250 in rich
neighbourhoods. Poor, especially poor
Blacks,
cannot choose where they live. On account of
that, landlords can overcharge
them. And they do. This remains true even
accounting for maintenance costs,
non-payment costs and vacancy costs.
Landlords in poor neighbourhoods enjoy
profits more than double those made by
landlords in affluent communities. A
small number of predatory landlords are
responsible for a large fraction of
housing woes – making as much as they can
because the market will bear it. The poor are excluded
from home ownership. In theory, if they can
pay a rent,
they could pay a mortgage. But it is next to
impossible for a poor person to
get a mortgage on an affordable home. Banks
are not interested in financing the
kind of homes the poor can afford. They can
make more money elsewhere. So poor
families pay high rents to live in otherwise
affordable homes! The banking world is not
for the poor. As big banks grew bigger,
community banks shuttered. The big banks
require fees, in particular overdraft
fees. In 2019 the unlucky group of people
with an average balance of less than
$350 paid 84% of the $11.68 billion in
overdraft fees. Blacks face profiling,
accusations
of fraud, denials of mortgages and higher
interest rates. Black and Hispanic
families are 5 times more likely to lack a
bank account. Exclusion brings
exploitation. Cheque cashing outlets
enter poorer communities with bright yellow
and
red signs. They are open long hours but they
charge 1 to 10% of the cheque
total for service. In 2020, Americans spent
$1.6 billion to have access to
their own money. There are also online
services to let workers get access to
cash before pay day, or to Buy Now Pay
Later, BNPL. Poverty can mean missed
payments that can ruin credit and then you
could have no credit score at all.
That can prevent securing an apartment,
purchasing insurance or even getting a
job. Since the deregulation of
banking in the 1980s there are no strict
usury
limits, with the result that loans can
attract an annual percentage rate upwards
of 460% for a two-week loan of $300. Getting
a payday loan may require a fee of
$15 per $100 loaned – or 400%. In theory
commercial banks could offer pay-day
loans with fees 8 times less and still turn
a profit, but they are not
interested. So pay-day loan sharks go on.
They extort because they can. The
predatory pay-day companies are financed by
the conventional banks! There are two banking
sectors, one for the poor and one for the
rest –
just as there are two housing markets and
two labour markets. The poor are
exploited labourers, consumers and borrowers
because the rest of us are not.
Society is not broken; it is just
bifurcated. Being poor is not only not
having
enough money. It is not having enough choice
and being taken advantage of
because of that. The role that exploitation
plays must be taken into account in
policies to help the poor. Increasing
minimum wage without dealing with rental
housing exploitation just invites landlords
to increase rents and their profits
to take the higher wage - and so on. Chapter 5. How we
Rely on Welfare. In spring 2020 as Covid
struck and unemployment doubled then doubled
again the federal government extended the
time those laid off could collect
unemployment and increased supplemental
payments by $600. There were other stimulus
cheques like rental assistance, with the
result that poverty fell – for all groups,
and child poverty fell by 50%. Despite
claims that payouts would stop the poor
from returning to work, there was no
evidence for that. There is a historic
assumption that without hunger the poor will
not want
to work. Politicians complain taxes pay for
children out of wedlock or to subsidize
wonderful apartments. There are mistaken
beliefs that most welfare recipients are
Blacks and that Blacks are lazy. Give more
to welfare recipients and they spend
it on alcohol and cigarettes. But this is
not so. It was found that if poor people
get more money it goes on groceries, fixing
their car or paying utility bills,
with less than 1% on alcohol and tobacco. There is a problem with
take-up rates for programs for the poor. Not
so
for the rich. In 2020 the US spent $193
billion on homeowner subsidies when $53
billion went on housing assistance for
low-income families. Add in the subsidies
to retirement benefits paid by employers,
student loans, college savings plans,
child tax credits – all going
disproportionately to Americans well above
the poverty
line – and the US has the world’s second
largest welfare plan. Then the US adds
$1.8 trillion in tax breaks. The rich spend more on
progressive taxes but they don’t spend a
bigger
share of their riches on taxes.
Theoretically, the poor are taxed 10%, the
middle income 24% and the rich 37%. However,
the poor spend on goods and are
hit harder by sales taxes. The rich benefit
from lower tax rates on wealth. Overall,
the poor and middle spend around 25% on
taxes, the rich 28% and the very rich
23%. The psychology of those
benefitting from the government is
different. The
poor recognize they are getting government
help. The middle class and rich who benefit
most have the strongest anti-government
sentiments and support cuts in
government spending - knowing it will not be
their benefits that are cut. This is
politically problematic. Logically you give
to a family by either lowering its
tax dues or increasing its benefits. Another
assumption is that the poor are carried
by middle class taxpayers who get nothing in
return. Yet the average middle-class
person in 2018 received more in government
aid than he or she paid in federal
taxes. Finally, the assumption is that the
poor end up paying no federal tax
and that the rich pay taxes. The latest data
on means- tested and other social
welfare, tax benefits and educational
benefits shows that families in the lower
20% of incomes get an average $25,733 in
government benefits a year while families
in the top 20% get an average $35,363, which
is 40% more. It seems there is an
invisible welfare state where middle- and
upper-class Americans believe that they and
not the poor are entitled to
government help. Perhaps they think their
hard work getting ahead deserves
reward. Of course, hard work can help, but
most understand that a lot of other
capricious things in life affect us – having
educated white parents and knowing
the right people helps too. Another possible
explanation is that we like things
this way and don’t see a need for change.
However, “Help from the government is
a zero-sum affair. The biggest government
subsidies are not directed at helping
people climb out of poverty but instead go
to ensure well-off families stay
well-off.” And this leaves less to go to the
poor. It cannot be said that there
isn’t enough money for the poor to be helped
more – it’s just that our benefits
come first. Chapter 6. How we
buy opportunity. Americans are rich. Yet
the dominant mood of middle classes and rich
is to
fret and worry and do non-stop work. They
don’t see themselves as authors of
inequality. They like healthy returns, smart
products and low prices. Consumers
like it fast and cheap. The American worker pays.
Poverty wages allow rock bottom prices.
Invasive
supervision and control deliver fast
service. Inequality puts millions of rich
next to millions of poor. Increasingly the
poor depend on public services
whereas the rich try to divest from them,
leading to private opulence and
public squalor. Both denigrate the public
sector. The rich hate to pay for
things they don’t need, and the poor hate
the public goods that have become
shabby and broken. Public investments fall
and private incomes and consumption
rise. Desmond traces this to
the Reagan-era 1981 Economic Recovery Act.
It
brought the biggest tax cut in US history,
20% both on income and wealth. Concurrent
budget cuts to the Department of Housing and
Urban Development were 70%, ending
any ability to replace slums with dependable
housing. Ongoing developments
added to the impact. When the civil rights
movement allowed blacks into public
spaces like parks, whites avoided public
places. Although whites had children
in public schools, whites rich and poor
began voting against taxes along racial
lines, breaking the consensus that had
supported the New Deal. Court-ordered school
de-segregation brought a new division in
which the public world was
increasingly abandoned to Blacks and a new
private one was developed by whites. Opportunity is not
purchased just by abandoning public goods
for private
ones, but also by buying oneself into an
upscale community. A pricey mortgage
buys a home and a good education, well-run
soccer league and public safety. There
were attempts to bus in kids of promise from
a poor neighbourhood, but this and
similar initiatives failed to get promising
students out of poor neighbourhoods.
Those in safe and prosperous communities
don’t want poor people or Blacks to
come. In fact, since the 1920s and the Great
Migration, cities have had
exclusionary zoning laws. Most Americans want to
build more public housing for low-income
families
but not in their neighbourhood. Middle-class
liberals supporting initiatives
for Black integration never intended it to
apply to their community. Initiatives
like busing impacted white working-class
communities. Hoarding resources and
passing laws to block the less fortunate is
an effective way to grow wealthy
while undesirables languish outside the
walls. Politicians’ statements
ring untrue when it is understood that the
basic
situation will not change if they are
elected. They may say the right thing to
do is the best; integrating schools is
antiracist, improves the overall
learning environment and prepares children
for a diverse workforce. Raising
minimum wage allows workers to buy enough
food and is good for business –
stabilizing the workforce and saving on
turnover. But Desmond says: be honest.
Sharing
opportunities previously hoarded doesn’t
mean everybody wins. Chapter 7. Invest
in Ending Poverty. If we want to aid the
poor, that is, to help the poor not to be
poor, we
ought not to make them poor by our
exploitation. The US constrains the poor in
the labour market, the housing market and
the financial market by driving down
wages, forcing overpayment for housing and
for cash and credit. Corporations
benefit from the low wages, and consumers
from cheap goods and services. Many of
us benefit directly, or indirectly by our
pension plans, from the low wages
keeping the stock market high. Landlords
benefit from rent exploitation. Home
owners benefit from making housing scarce
and expensive. Banking and payday loan
players profit from exploitation of the
poor. Those with free banking accounts are
subsidized by excessive overdraft fees that
disproportionately get paid by the
poor. There is a need to stop
subsidizing the affluent. Poverty would end
if the
government cracked down on corporations and
families who cheat on taxes and
applied the money to those most in need of
it. There is a need to stop creating
exclusive prosperous communities. Wealth
traps breed poverty traps. We should
increase our investment in economic
stability and basic dignity promoting what
one economist called “a right to a decent
existence – to some minimum standard
of nutrition, healthcare and other
essentials of life”. The easiest way to help
the poor is to help them get the benefits
the government
already has put in place. The low uptake on
programs for the poor turns out to
be mainly because it’s hard and confusing. A
little help raising awareness and
guiding through red tape goes a long way.
Telling elderly households about food
stamps with a number to call for help
resulted in tripling enrollment. Sending
out mailers for the Earned Income Tax Credit
with less text and a clearer font
significantly increased the number of
workers claiming! But what would it cost to
really end “poverty”? In 2020 the gap
separating
everyone in America below the poverty line
and the poverty line was $177 billion
according to Desmond who argues that this is
a good number to use for starters.
It would offer everyone a safer affordable
place to live, end hunger, put a
dent in homelessness, give children a fairer
shot and build their security and
success. How? Start with the
cheaters. Give the IRS the resources to
chase tax
avoidance by multinational corporations and
wealthy families using tax havens
and offshore accounts. Introduce a minimum
corporate tax on profits of say 25% no
matter where they are based. Return to a
higher top marginal tax rate and corporate
tax rate. The marginal rate could go back to
the 50%, the 1986 level. The corporate
tax rate could go back to 35%, the rate
between 1993 and 2017. Although this
would be hard, it could be done.
Alternatively, a bundle of tax loopholes
could
be slowly phased out. In theory it’s
possible. Beyond the dollars, the
welfare system could be refashioned to
respond to
an anti-poverty agenda. The Child Tax Credit
could be expanded to include poor
and middle-class families. There could be
new construction of public housing. There
are questions of targeted or universal
programs. Targeted, like food stamps,
are cost effective and successful. But they
are divisive – like the Affordable
Care Act. Universal Basic Income gets around
that, but universal programs are much
more expensive. Newer proposals go beyond
targeted/universal with things like
“targeted
universalism”. In any event, it is better to
use programs that foster goodwill.
Above all, go big with
broad coalition support around rebalancing
the
safety net, fairer taxation and significant
payments – no more tinkering and
underfunding. This is not about
redistributing wealth. It is more about
redistributing
effort and focus. Far too much is done to
underwrite the portfolios and estates
of the American aristocracy. Help people
generate wealth, but don’t focus on
helping them increase it when millions
languish in poverty. The Emergency Rental
Assistance, ERA, program during Covid
illustrates
how an important relief program can work.
Slow and uneven to start, the program
ended up bringing down eviction calls by
major percentages – rough average, half
- in state after state. Sadly, there was no
recognition for its success and so
this became a temporary program. Those in
Congress need the reward of
recognition for their initiative. The world has changed
since The War on Poverty and The Great
Society of the
Johnson presidency. But those were troubling
political times too. Yet those
programs halved US poverty. Now paying the
way out doesn’t work. Giving workers
bigger wages causes rents to raise to syphon
the extra money into landlords’ pockets.
The current Earned Income Tax Credit program
props up corporate profits and
depresses wages. Programs can relieve
victims, but they also entrench the root
causes of poverty. New programs need to go
beyond this, focus benefit on the
poor and empower them. Chapter 8. Empower
the Poor. Choice is the antidote to
exploitation. So, give more Americans the
power
to decide where to work, live, bank and when
to start a family. Minimum wage hasn’t
budged for over a decade and most states
still allow
restaurant and other service workers to be
paid a subminimum wage. Congress
must raise minimum wage for all workers and
the US should join most countries
in having an automatic periodic review.
Empowering workers is the best way - as
unions did. However, unions were
exclusionary of Blacks so something a bit
different is needed. New Labour should make
organizing easy. Presently it is
complex, difficult and must be done
workplace by workplace. The new model for
organizing
is by sector as done by the Service
Employees International Union that got a
series of food chain workers to all lobby
for legislation. Sectoral bargaining
could aim for all Amazon warehouses and all
Starbucks locations in one go – and
Apple and Meta too. Ideas for new labour law
have come from an international collective
project that issued a report in 2020, “Clean
Slate for Worker Power”. Choice in housing would
move from the present norm of private rent
taking
half one’s income. One should be able to
rent privately, or rent publicly or
own an affordable house or join a housing
cooperative. An important part of
choice is strengthening the commitment to
public housing. The huge present
demand tells that this can be a life changer
for the poor. That may be a surprise
for those who thought public housing had
been a failure. Sure, there are undesirable
examples, but there are also impressive
ones. And children who grow up in public
housing are healthier, and do better than
their peers unassisted in the private
tenant market. An initiative to make
ownership a choice is theoretically
possible. The
median rent and insurance in Louisville
Kentucky in 2019 was $900 a month while
the median homeowner paid $573 for mortgage,
insurance, and taxes. The trouble
is that banks are not interested in
financing affordable homes because the
profits are too low. These are typically
bought by speculators or landlords. To
open up such an option would provide a way
for more people to build wealth. The
Government has begun a program along these
lines with the rural 502 Direct Loan
Program. This could be expanded into urban
communities where it could impact
more poor families. “Commoning” creates homes
collectively owned and controlled by
residents
when they take over and rehabilitate an
abandoned apartment or buy up a run-down
building, then spruce it up. They become a
cooperative. Cities support these
initiatives by transferring titles to the
cooperative organization. Residents
often purchase shares and pay monthly fees
to cover the upkeep of the
buildings. The shares are sold at close to
the amount paid when the resident moves
out. The poor should have
better than a predatory bank for a loan.
Banks could
simply freeze a transaction without
sufficient funds or provide a short-term
loan
at modest interest rates. Some countries
regulate bank fees, and their regulated
overdraft fees are a tenth of US fees. Some
states prohibit payday lending by
capping interest rates or just banning them.
Others have suggested the Post
Office or Federal Reserve might get into
small-dollar loans. Anything that can
introduce choice for poor people helps. Then there is
reproductive choice. Women with access to
effective
contraception go to school longer and
participate in the job market at higher
rates
than women who don’t. Gentle intervention
has been used when women are asked
screening questions for seeing a doctor or
nurse. Do you want to get pregnant
next year? If the answer is no, they can
choose their preferred birth control device.
Abortion is problematic. But surely a rich
country that can reverse Roe V. Wade
could ensure that no child is born into
poverty, giving women the best
contraception and healthcare, and providing
new mothers with paid parental
leave and free childcare. The shared economy is one
where the advantages of the rich often come
at
the expense of the poor. But that need not
always be so. Consumers can vote
with their wallets where we shop and what we
buy. We should consider companies’
poverty impact: are they unionized or not;
are they into offshore tax evasion,
etc. Doing the right thing is often
inconvenient, time consuming, even costly.
But that’s the cost of a restored humanity. Chapter 9. Tear
down the walls. Blocking affordable
housing in a neighbourhood is an act of the
segregationist.
Just moving poor families to a high
opportunity neighbourhood improves their
lives tremendously. Children do better in
school. Their incomes in later life are
higher. If it became possible for poor
people to move some would and some would
not. However, there is seldom affordable
housing in a desirable neighbourhood that
does not fill up – indeed large numbers
apply. The evidence is by now
in; integration works. Black children who
went to
integrated schools performed better in the
classroom, graduated at higher rates
and were more likely to go to college than
their peers in a segregated
education. White children in desegregated
schools remained on track. Academic
achievement
and later life well-being did not suffer.
There is evidence that pumping more
money into segregated schools is no
alternative to the positive effect of
integration. Well managed, well
distributed affordable housing that blends
into a
community does not lower property values,
and New Jersey, that has promoted
this, is first in public education. Other
states could try the same. Federal
monies could be denied to states with
exclusionary zoning. The poor are used as a
reason against other progressive policies.
Taxing
gas-guzzling vehicles, or transitioning to
green energy or increasing the cost
of beef can’t be done because “it would hurt
the poor”. These are fair concerns
except that the predicament of the poor need
not be, unless one assumes the
inevitability of ongoing non-enforcement of
taxes and a welfare system of tax
breaks for the rich. That assumption is a
phony assumption of scarcity. It should
be replaced by a recognition of abundance
and of communities where wealth means
having something to share. Desmond shares
experiences of various communities, sharing
and not. Epilogue. Desmond’s Epilogue goes
over the needs to eliminate poverty, naming
some
organizations and individuals working on the
problem. Basically, ending poverty
needs a mass movement akin to Black Lives
Matter. People need to join groups
with those who have direct experience and
participate in joint actions. They need
to “go beyond the choir” and the personal
consumer behaviour into a group in
which they feel some discomfort and are
pushed to do what is necessary. There is
information in the epilogue and some
insights.