New Research Documents Growth of Extreme Poverty

by Indivar Dutta-Gupta, Peter Edelman, LaDonna Pavetti

A new book by two of our nation’s foremost poverty researchers, Kathryn Edin and H. Luke Shaefer, reveals the desperate circumstances that hundreds of thousands of children and their parents increasingly face: living with virtually no cash income in an economy that requires it to meet nearly every human need.

In $2.00 a Day: Living on Almost Nothing in America, Edin and Shaefer trace this disturbing trend to the 1996 welfare law, which has gradually but inexorably gutted the cash assistance safety net for families with children. Attention to this often neglected side of our nation’s extreme economic inequality is especially timely as policymakers from both parties consider reauthorizing the 1996 welfare law. As the book vividly shows, we are long overdue to take a different path – one that upholds our nation’s values, including our responsibility to protect and empower the most vulnerable by eliminating extreme poverty.

Living on less than $2.00 per person per day is the World Bank’s standard for measuring poverty in developing countries. Through rigorous data analysis and in-depth interviews, Shaefer and Edin document the dramatic rise in extreme poverty since the 1996 welfare law. Similarly, research by the Center on Budget and Policy Priorities confirms a rise in “deep poverty” – income below half the poverty line, or below roughly $10 per person per day for a typical family – and shows that Temporary Assistance for Needy Families (TANF), created in 1996, reduces deep poverty far less than its predecessor, Aid to Families with Dependent Children. Research shows that early childhood poverty causes short- and long-term harm, in turn posing enormous costs to our economy.

 

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