In this interview, the authors explain why childless households are fueling the rise in poverty in the United States, and how simple policy changes could end this problem.
In their recent study, Stone Center Affiliated Scholars David Brady and Zach Parolin found that deep and extreme poverty in the United States — defined as less than 20 percent and less than 10 percent of median income, respectively — significantly increased from 1993 to 2016. Brady and Parolin recently spoke to the Stone Center about their findings.
What is driving the increases in deep and extreme poverty? It seems that childless households are a big part of this trend.
Brady: I tend to think that we control the amount of extreme poverty and deep poverty based on our social policies. I’m a little bit strident about this issue. It’s like a dimmer switch — how much do we want to turn up access to SNAP [Supplemental Nutrition Assistance Program, formerly known as the food stamps program] and other benefits, or how much do we want to turn it down? Zach and I find that, after the 2008 crisis, when the economy’s in total recession, extreme poverty actually declined a little bit because we expanded SNAP and made it more available to people.
We have social policies that can, effectively, reduce and eliminate extreme poverty, and that’s especially SNAP. It works, it’s really good at it. The problem is we just don’t have enough of it, and we don’t give it to everybody.
Parolin: I agree with all that. Then there’s this added dimension — these benefits that we sometimes turn off and on are targeted at certain populations, and a lot of people are explicitly excluded from the income supports we provide.
We have two competing phenomena going on over the last 20 years. We see declining cash assistance from TANF and we see an increase in SNAP benefits — it would be better to have both, but we find that on net, for households with children, the decline of cash assistance hasn’t necessarily increased deep or extreme poverty.
Childless households, who haven’t benefited as much from the increase in SNAP benefits — they’re the ones who are seeing a particularly strong rise in deep and extreme poverty.
Relevant to the discussion today: we need a child allowance, of course. But there’s a legitimate argument to be made that we are overlooking the need faced by a lot of these childless households. And perhaps we should do more to support them.
This is a group we often don’t hear much about: childless households in deep and extreme poverty. Do they account for a large percentage of very poorest segments of the U.S. population?
Brady: We show that there’s been this substantial shift toward childless households among the extreme and deep poor. That’s really the story.
There is also a tricky population to consider, because we can’t count it very well, and that is the homeless population. The CPS [Current Population Survey] data that we use and everybody uses doesn’t have unhoused people in the dataset. We estimate that extreme poverty would be 23 percent higher if we could include these folks. The evidence I’ve seen is that this is majority childless adults. That doesn’t trivialize or minimize the families with children that are homeless. That’s a real problem, of course, but there’s a lot of unattached adults who are homeless, and there’s really nothing available for them that’s going to help them out in our society right now. That’s just the reality.
Parolin: Childless households make up a majority of families experiencing deep and extreme poverty, at least in more recent years in our data.
There’s always a certain appeal to providing extra support for families with children — children are the future, we need to invest in them, we need to make sure they get adequate nutrition — and it’s a fact that we should do these things. But these childless households are also suffering, and they’re also worth protecting.
Brady: I’m a bit of a broken record on this issue, but it’s so clear to me how politically deliberate it all is. Because the groups that are most likely to be extremely poor — children of immigrant households and childless adults — are groups we’ve politically chosen not to protect. That’s not a new insight per se, but it’s so evident in these patterns. We’ve literally made the choice not to fund these groups. We can debate that choice. But let’s be clear: it’s a choice.
Parolin: And we see it even in the current pandemic. The first round of stimulus checks last spring, if you had an undocumented immigrant in your household, in your tax unit, no one in the tax unit — basically, the household — received stimulus checks. Even if there was only one undocumented immigrant in the household. That’s a policy choice. The federal government chose to exclude them. We don’t have great data on extreme poverty in the crisis right now, but it’s probably the case that these are the families that are suffering the most.
What are your top policy recommendations, based on your findings?
Brady: If we’re right, that all of this is a political choice, then we should make a political choice to give benefits to people at the very bottom of the income distribution. I would argue two things. First, It’s just humane. There’s no reason we need to have such extreme deprivation in a country as rich as ours. And second, it’s often going to be efficient. There’s lots of studies that show that if you invested in improving the living conditions of the homeless, you’d probably save money. Why not just invest in these people and make their lives a bit better? That would be my view.
Parolin: The only thing I would add to that is right now there’s a lot of discussion about a fully refundable child tax credit. Basically it would make sure that, regardless of whether you’re employed or not, and regardless of whether you have to pay taxes or not, you would be able to get some, ideally, monthly cash benefit if you’re a family with children in the household. If it’s full coverage and works as intended, that would wipe out extreme poverty among children. Maybe even deep poverty among children. There’s still that other share of the population we’ve got to worry about, but that would be one massive step forward.
And [we should] improve and expand some of the programs we have to make sure they reach more childless adults — SNAP, and any other form of assistance we can provide.
Brady: There’s no reason a country as insanely rich as the United States should have such a large share of its population live in destitution and starvation. There’s just no reason for that. I was struck how cheap the recent expansion and conversion to full refundability of the child tax credit would be. I saw an estimate that this will only cost $100 billion dollars. That is not a lot of money for a country as rich as the U.S. and we spend far more than that on many less crucial programs (or tax credits that favor affluent people).
One thing that I think about a lot is we get certain social policies in our head and we get consumed with debating them and talking about them, and it distracts from the fundamental reality that there’s no substitute for just giving poor people money and helping them out. I’ll give the example of the current obsession with eviction. Nobody’s in favor of eviction. But the simple reality is that eviction is sort of the fashion of the day, when what we should just do is give these people money so they can pay the rent. It would be easier than banning evictions. Attacking income poverty, whether at the extreme end or more near-poor end, would do far more than making rules about who gets to be evicted or not.
What was different about the way you measured deep and extreme poverty, compared to prior researchers?
Parolin: There are perhaps two key differences in our approach compared to other approaches. First, we include benefits from the SNAP program as income, as we do with all other taxes and transfers, but SNAP is the most consequential one. And that’s not always been done in work on deep and extreme poverty. Some of the initial estimates that made headlines a few years ago were based on income without SNAP benefits, and part of our study shows that SNAP benefits are really consequential in reducing deep and extreme poverty.
The other important part is that we adjust for a problem that we refer to as benefit underreporting in our income data. In the income data that most people use to measure poverty, income, etc., in the U.S., benefits from SNAP or Temporary Assistance for Needy Families [TANF] oftentimes are undercounted in the data. We applied some techniques based on the Urban Institute’s TRIM 3 model to adjust for that benefit underreporting. We try to get the most accurate representation of what families’ or households’ income situation really is. And even with those adjustments, and after we bring in more benefits into our data, we’re still finding that deep and extreme poverty are rising.
Brady: Both Zach and I share the idea that the easiest way to define poverty is simply as a shortage of resources relative to needs. What we do that’s a bit different is use the international poverty literature, and especially work linked to the Luxembourg Income Study [LIS] Database, to guide us to use a relative definition of needs. If it’s a shortage of resources relative to needs, well, what’s the threshold? At what point do you not meet your needs? We say this is always relative, just like poverty is almost always relative. And these other thresholds that are out there, like the use of $2 a day, don’t make a lot of sense. They’re too low, for one, and they assume there are no economies of scale within a household.
We say thresholds, or the definition of needs, is always relative. As a country gets richer, you need more to not be extremely poor.
Is there still any controversy about including SNAP or other benefits in poverty estimates?
Brady: I think the original, most high-profile work did not include [SNAP] very much on purpose. Following practices developed by users and creators of the LIS data, and international poverty research generally, we should monetize all near cash benefits like SNAP. So, we’ve said this is just not defensible and you’ve got to include it. And we can debate if SNAP has 100% of its value. You can say that the actual cash value of SNAP might be 50 cents on the dollar, and in fact Edin and Shaefer say that on the street you can sell SNAP benefits for 50 cents on the dollar, but they’re worth something.
If we had a choice between — though I think we should ideally do both – between the recent expansion and full refundability of the child tax credit versus putting more money into SNAP ¾ I would certainly take the cash transfers. Zach, you’d agree with that, right?
Parolin: Absolutely. Cash all the way. If we had a choice, get rid of these programs where we can only use the dollars on this item or this item and replace them with equivalent support in the form of cash assistance. Trust families to use the money in the way they need it most.
David Brady is a professor in the School of Public Policy and director of the Blum Initiative on Global and Regional Poverty at the University of California, Riverside.
Zach Parolin is an assistant professor at Bocconi University in Milan and a senior fellow at Columbia University’s Center on Poverty and Social Policy.
Read the Study: The Levels and Trends in Deep and Extreme Poverty in the United States, 1993–2016