Wednesday, July 29, 2009

Economics and Poverty

My aunt and I got into a discussion about economics and poverty. I was essentially coming from the right and she was essentially coming from the left. I just sent her an email on the topic and took the relevant excerpts for this page. Maybe this will be some debate fodder for us on this page.

Email snippet:

...Also, I was thinking about our discussion of poverty
so I thought I'd do a little looking around.

I came across two facts that when taken together argue
against your structural model and for my behavioral
model (I gave the URL and snippets below). The first
snippet states that poverty rates for single mother
families have stayed above 35% since 1959. The second
snippet states that overall poverty moved from 22% in
the late '50's to 12% in 1969 where it has hovered
around since then. If our current poverty is fully a
structural issue, then why has there been a general
poverty reduction but not a corresponding reduction of
single mother poverty? It would seem that the 10%
drop in overall poverty was structural (probably women
taking jobs, birth control advances and acceptance and
families going to dual income), that I would grant
you, but we were talking about today's poverty not the
poverty of the 1950's.

Secondly, I was thinking about your statement that,
paraphrasing, "Are we saying that our parents could
live on one income but we can't?" That stuck with me
and I couldn't figure out why it bothered me until I
remembered a discussion I had with a feminist econ
student at the U of C a few years back. She had
reminded me that the stay at home mom worked at many
functions that raised the family's quality of life,
extended resources, helped in child rearing, etc, etc,
and that these are functions that modern 1 parent
families do without (lower quality of living) or have
to pay for (higher bills). She gave me a academic
journal article, sorry I can't remember a citation,
that placed a stay at home mom's economic contribution
at something like 60% of an average yearly wage if the
family had two kids. She also pointed out that this
contribution went up with each additional child that
the family had. So, given this point, I feel that a
generation or two ago, they didn't live on one income,
they lived on aprox. 1.6 incomes. That is why there
is a significant drop in income and quality of living
when you go from two parents to one parent regardless
of whether they both worked outside of the home or

In a general sense, I feel obliged to try to help the
poor both for moral but also practical reasons.
However, let us search out the true causes of poverty
and not lay the blame on "trickle down economics" or
some other bogeyman when the answer may be as
simple as the number of productive adults per family
unit or the number of new poor immigrants who take
some time to make it to the middle class (this is not
to say I'm anti immigration, I think this influx
serves an extremely useful function for both parties,
the same as it always has in our history).

While there isn't anything intrinsically wrong with
children out of marriage and single parent families
(to my mind anyway) there is something instrinsically
wrong with making choices that negatively affect the
children you decide to have.

To go back to an old battle in the culture war, that
is why Murphy Brown was a stupid target for
conservatives when Quayle was trying to make points.
Murphy Brown could afford a full time caregiver, could
afford anything the kid needed, there was nothing
wrong with her (fictional) choice. While it would
seem mean, cruel, and generally conservative to point
this out, a seventeen year old high school student
with a kid doesn't realistically have the same options
as an older and richer woman. She should make her
choices accordingly or she (and her kids) shall
suffer. No matter how many self help books they read
or how large their support group is, the only
meaningful empowerment is financial in this context.

Reference citation and snippet:


Snippet 1: Of all family groups, poverty is highest
among those headed by single women with children under
18 years (Table 2), especially if they are African
American or Hispanic. Such families are much more
likely to be poor than other families with children or
families with aged members. The poverty rate for
female-headed families has remained above 35 percent
since 1959. In 1998, 38.7 percent of such families
with children were poor, compared with 8.5 percent of
families in which males were present.

Snippet 2: In the late 1950s, the overall poverty rate
for individuals in the United States was 22 percent,
representing 39.5 million poor persons. Between 1959
and 1969, the poverty rate declined dramatically and
steadily to 12.1 percent. As a result of a sluggish
economy, the rate increased slightly to 12.5 percent
by 1971. In 1972 and 1973, however, it began to
decrease again. The lowest rate over the entire
24-year period occurred in 1973, when the poverty rate
was 11.1 percent. At that time roughly 23 million
people were poor, 42 percent less than were poor in

In 1975 the poverty rate increased to 12.3 percent.
It then oscillated around 11.5 percent for the next
few years. After 1978, however, the rate rose
steadily, reaching 15.2 percent in 1983. In 1998, the
last year for which data are available, 12.7 percent
(34.5 million people) were poor.