I remember the story of a family of five living in a beauty salon without running water because they had an income and an existing lease. According to the poverty and housing assistance criteria (as set by the federal government), the family was not ‘homeless enough’ for shelter or state resources. Who knew that “homeless enough” was a thing!
The irony is that this families story isn’t a unique tale – it is the reality for many Americans in the poor and middle class.
Every year, the Census Bureau continues to estimate that over 30 million Americans live in poverty. Using the same estimates, 36% of California’s population are at or near the poverty level.
Yet, the measures behind these estimates are profoundly flawed and only based on food. They do nothing to assess other complex factors such as regional, economic differences, such as transportation and housing. For instance, housing prices differ from one location to the next.
In reality, several studies suggest different estimates while looking at some other significant factors. One study found at least 3.2 million more people, and another found that over 51 million American households struggle to pay for the necessities, including healthcare, housing, and food.
Misrepresenting Poverty Leads To More Challenges
Still, the poverty line that fails to offer information on poverty’s depth or intensity continues to regulate eligibility and appropriation of federal, state, and local aids. It has no way of assessing how long a person has been in poverty nor does it calculate actual deprivation. For instance, are these persons having a near-zero income, or can we say that their income levels exist just under the poverty line?
Or perhaps we are talking about someone living on the streets because they cannot afford rent against a family unable to purchase enough food that the adults in that household go hungry. Or perhaps families that are choosing between food and buying badly needed medications.
This is perhaps one of the key reasons we have too many stereotypes about those struggling with poverty.
Still, we must acknowledge that there are varying levels of deprivation among people below and above the poverty lines. This means they face different financial stress, causative factors.
Therefore, we need different solutions for different levels of poverty and deprivation.
It is currently widely acknowledged that many Californians cannot afford to live healthy in California because residents in the lower and middle-income classes struggle to make ends meet. Residential rates and electricity are respectively at 42% and 47% higher than the national average.
It’s no wonder many struggle to pay utilities and often choose between that and having food.
Stagnated American Middle Class
We must realize that as long as we have inaccurate definitions of poverty, we cannot accurately define America’s middle class.
America’s economic growth and stability depend on consumer spending. For the consumer economy to increase, consumers need to have more money to spend. A significant portion of America’s households are employed. However, middle and poverty classes have had very little income growth for the past half-century.
Employment and wage distribution are stagnating or declining for the low and middle classes. These stagnant incomes and falling wages further mean fewer Americans are growing to be better than their parents. So upward intergenerational mobility among America’s youth is a fraction of what it used to be in 1940 when about 90% of children grew up to experience higher incomes than their parents.
Since 1970, California’s middle-class share has fallen from 60% to over half the population, with many further sliding down or leading the state.
Children born into low-income families are finding a more challenging time making it into the middle class. Recent findings show that climbing up America’s income ladder is no longer a question of hard work or merit. As long as class gaps exist in neighborhood quality, test scores, parenting styles, family formation, college attendance, and graduation, our children may not move upwards, out of poverty, or to the next levels of good living. Their future might stagnate as they face a challenging task trying to stop the downward pull towards abject poverty.
It’s no wonder the Californian Dream for the poor and middle-class families in California remains an illusion.
Focusing On The Most Vulnerable Alone Is Counterproductive
America today fights a pandemic that has highlighted all these vulnerabilities and is further pushing the poor and middle class towards poverty.
One-in-four Californians received unemployment between March and July last year, and the state’s unemployment rates are still climbing.
Therefore, it goes to show that our policies of dealing with the most vulnerable are not enough.
I once saw a crazy joke by Mike Bonin on the issues of homelessness:
A newly diagnosed lung cancer patient asks her doctor what the recommended treatment is. “I’m sorry,” the doctor says, “but we only treat late-stage cancer. Come back in a year when cancer has spread, and your prognosis is worse. We’ll do our best to help you then.”
Yes, this is one crazy scenario, but it is a real life picture of America’s support programs. Suppose we keep classifying help according to vulnerabilities and only helping those who have reached the extreme levels. How can America truly tackle poverty?
The logic to help only at the most critical stage is an economic horror. It means we are waiting for the ‘not so poor’ and the middle class to keep struggling until they reach the level of vulnerability where our ‘help’ kicks in.
We need a multi-pronged approach that provides different support levels for the low and middle class. Therefore, we should not retreat from helping those who are “not vulnerable enough,” but we need to instead broaden the net to focus on America’s poor and middle class. That’s when we make real commitments to tackling poverty.
If we are serious about fighting poverty, the first step would be an accurate understanding of America’s poor and middle class.
We must realize that a robust middle class is the source of economic growth. When we achieve a robust middle class, we can expect a stable consumer base that further drives productive investments and encourages other national and societal conditions that foster growth.
We cannot devise effective strategies to tackle poverty until we fully understand its multiple facets. Our current policies are failing; we must go beyond temporary support programs for the most vulnerable to create solutions for multi-faced levels. We have to focus on longer-term investments to find sustainable solutions that would better America’s economy.
The poor and the middle class are the heart of America’s economic dilemma. Until we can sustainably help these classes, our economy will continue suffering. Our lack of focus on what’s most important will only serve to dig a deeper hole that haunts us for generations to come.